Question

In conslusion Compare and analyse the supply chains of Apple Watch and Nike Air Max shoes.

Answer 1

Nike’s supply chain:

Nike’s lean supply chain $0.15 compared to a traditional distribution model. This amount of savings provides serious competitive edge to the company.

Important thing on Nike’s efficiency is its low overhead manufacturing costs instead of owning & operating its own factories. It also solicits the services of independent manufacturers who are located in fourteen countries.

Apart from manufacturing process, Nike also relies heavily on its independent contractors to source the raw materials for its shoes from the countries in which they are produced. This will help Nike to consolidate its intermediate costs by limiting the number of vendors with whom it has to negotiate contracts.

Nearly 20% of production for Nike shoes would be moving to more automated factories by 2023. If automation proceeds as predicted, a report claims that 1.3 million new robots may be installed in the factories which will make Nike to change their manufacturing strategies.

Apple’s supply chain:

Apple’s upstream suppliers can include quanta computer, universal scientific industrial, E&R engineering who are all expected to see increasing orders for apple watch.

By increasing the number of companies that it is working with, the company can avoid the risk of leaning on one company. This can also help apple to maintain its gross margin.

A report shows that its primary supplier quanta have hit the maximum capacity for the new model. Its second supplier compal electronics will begin mass production of its smart watch from November 2018.

Apple is known to maintain one of the best managed supply chains in the world. It outsources its component production & device assembly which allows apple to do what it does best.

The advantage for its suppliers is that apple has reputation for innovation. Samsung which is also one of the suppliers for apple gets large orders from apple which can reduce the manufacturing costs for its own mobile phone components because of bulk production.