Apple And Dell Companies: Inventory Management Admission College Essay Help

Introduction

Inventory management refers to the strategies and principles managers use to maintain the optimal level of stock for the company. In the modern corporate environment, which is defined by intense rivalry, companies are taking advantage of every chance to reduce operational expenses. Effective inventory management is one method for achieving cost savings (Muller, 2011). Inventory levels should be optimally maintained such that they are neither too high nor too low.

Holding excessive inventory contributes to high warehouse expenses and may raise the danger of stock goods being destroyed or lost (Blanchard, 2010). Insufficient inventory may result in manufacturing delays, which may result in cost overruns. This paper analyzes Apple and Dell's inventory management strategies to establish the effectiveness of inventory management in reducing operational expenses. The report must also provide recommendations for both companies based on the identified deficiencies.

Types of inventories administered

Apple's and Dell's inventories consist of electronic raw materials in the form of computer and mobile phone components. Apple has become one of the global market leaders in the development and sale of Smartphones. In addition to raw materials, its inventory also includes finished laptops and smartphones like as iPad, MacBook, MacBook Pro, iPhone, Mac Mini, Smart Cover, and MacBook Air.

On contrast, Dell specializes in the production of laptop computers; hence, its finished inventory consists of laptops. As is the case with all electronics, both organizations' inventories deteriorate at a rapid rate, necessitating the shortest possible holding period.

Design concept synthesis

Apple employs a build-to-stock strategy in which things are made and placed on shelves in anticipation of purchasers. Apple employs service-based design principles to enhance customer happiness, which have proven effective in enhancing the consumer experience and moving the company ahead of its competitors. The company's primary purpose is to maximize the customer experience via user orientation. The company mixes visual designs and contemporary operating systems into its products for simplicity and a superior user experience, based on extensive customer needs research (Lu, 2016).

In contrast, Dell utilizes an assemble-to-order model in which things are produced only after a consumer has placed an order. Customers are permitted to personalize the product by providing the desired device parameters.

The inventory's impact on performance, operational efficiency, and customer satisfaction

Each enterprise strives to outsmart the other and acquire a significant market share in today's commercial environment, which is defined by intense competition. Among the factors that can lead to the acquisition of a competitive advantage are, among others, low pricing, excellent products, and positive customer relations (Wang & Toktay, 2008). Utilizing a low pricing approach to increase market share necessitates taking advantage of every opportunity to reduce production costs. To achieve cost savings, businesses nowadays are focusing on inventory cost reduction. By maintaining an ideal stock level, a company is assured of cost savings associated with retaining too much or too little inventory.

Apple's competitive edge is partially related to its superior inventory management. Apple used a lean strategy in the late 2000s, when it outsourced the production of raw materials to third parties rather than creating them internally. The plan was influenced by the belief that holding a large quantity of inventory in the company's warehouses would result in depreciation-related losses. Apple's inventory is anticipated to deteriorate by 1% to 2% per week, highlighting the necessity to maintain the lowest possible stock levels. In this sense, Apple maintains a tiny amount of inventory at its central warehouse in the United States, while the majority of stock products are shipped to retail locations for quick consumer disposal.

Similar to Apple, Dell outsources the majority of its raw materials in the form of laptop components to its suppliers and only assembles the finished product. However, Dell is unique in that it compels suppliers to store raw materials in warehouses controlled by Dell rather than in its own stores (Ye, 2013). When a consumer submits an order, the corporation only obtains raw materials from its warehouses, which are located close to its headquarters.

This element assures that the corporation incurs no fees other than transit charges for stock holding. The minimization of inventory reduces operational expenses, resulting in cheaper product prices. In addition, it enables the customization of the product by allowing the buyer to specify additional requirements while placing an order.

Comparing and contrasting the various layout types

Blanchard (2010) contends that a company's design may influence its market success or failure. Apple and Dell, both aware of the significance of layouts in achieving a sustained competitive edge, have creative layouts that explain their success in their respective industries. Apple and Dell share four types of layouts: keyboards, superior operating systems, screen sensors, and retina displays.

Comparing the computing equipment of both firms, the keyboard, operating systems, and screen sensors share commonalities. The apparent reason for the similarity between the two companies' mentioned layouts is that they both source their raw materials from the same vendors and employ comparable technology. However, Apple's products feature superior retina displays compared to Dell's, which explains why Apple is the industry leader.

Apple's relationship with its customers is best exemplified by the simplicity of its layouts, which make the products' functions easy to use. In consequence, the company's products have achieved widespread customer acceptance in recent years, making it the global leader in the Smartphone sector. According to Wang and Toktay (2008), the customer's capacity to comprehend the company's design is crucial, and businesses must make them as clear as feasible. Recognizing the significance of layouts to a company's success, Dell has recently incorporated layouts into its assemble-to-order design.

Two indicators to evaluate firms' supply chain performance

Inventory Supply Days

According to reports, Apple turns over its whole inventory every five days, whereas its nearest competitor, Dell, turns over its inventory every ten days (Campbell, 2012). Apple's low inventory days of supply are facilitated by the company's multiple outlets located in various regions of the world. The large number of locations helps that the company's products reach more customers. The excessive number of inventory days of supply at Dell may be attributable to the company's limited customer base. The company reaches customers exclusively over the Internet and has no retail locations. In order to increase sales in a shorter amount of time, the corporation must construct permanent retail locations.

Cycle Time for Cash to Cash (C2C) Transactions

The cash-to-cash cycle indicator counts the time between when a company pays for its raw materials and when it receives payment for its finished goods. Since Dell only pays for raw materials when a customer placed an order and receives payment from the consumer upon delivery of the final product, its C2C cycle is shorter (Lu, 2016). Dell obtains the raw materials on the same day it pays its vendors, and orders are delivered to customers within five business days. Apple, on the other hand, has a longer C2C cycle than Dell since it stores finished stock items for a longer time before selling them.

Methods for improving inventory management

Currently, Dell's production system is order-based, and the company only purchases raw materials from retailers when a consumer places an order. The technique not only eliminates the cost of maintaining inventory, but also reduces overall operational costs, resulting in cheaper product prices. The raw supplies are obtained every two hours from warehouses located a few miles from the headquarters branch (Campbell, 2012).

Due to the significant transportation costs involved, the frequent procurement of small quantities of raw materials may increase operational expenses. The corporation must determine the typical daily raw material requirements based on historical data, then procure and transport the items everyday in full. This action will reduce transit expenses and the time between ordering and receiving the raw materials.

Apple must make substantial investments in research and development in order to expand its product markets. The rise in market share will ensure that the company sells its finished goods as quickly as possible, hence reducing the expenses associated with maintaining finished inventory (Lu, 2016). In light of the widespread use of e-commerce around the world, the corporation should likewise embrace the notion of Internet stores. Internet stores are less expensive than traditional warehouses, and as a result, they may minimize operational expenses, resulting in lower product pricing. A price drop may result in a high turnover rate, hence decreasing the stock holding duration for finished goods.

Conclusion

This study contrasts Apple Inc. with Dell's inventory management procedures. Regarding stock levels and procurement procedures, the inventory management strategies of the two organizations are vastly distinct. Dell maintains no inventory in its retail locations and only orders components from suppliers when a consumer places an order. Apple, on the other hand, maintains a little amount of stock at its headquarters store, while the retail stores carry the remainder of the stock items for quick consumer disposal.

The comparison of each company's inventory management system reveals a few shortcomings, such as Dell's high transportation costs and Apple's lengthy stock holding periods. To address the shortages at Dell, the raw materials should be transported in big quantities based on daily demand forecasts. On the other hand, Apple should build additional online retail locations to aid the acquisition of more customers, thereby reducing the amount of time finished merchandise spends in stores prior to being made available to customers.

References

D. Blanchard (2010). Excellence in supply chain management practices. Hoboken, New Jersey: John Wiley and Sons.

Campbell, M. (2012). Every five days, Apple turns its whole inventory over. Web.

Lu, C. (2016). Four years ago, Apple had the best supply chain in the world; here is what you can learn from that. Web.

Muller, M. (2011). Management of inventory fundamentals American Management Association, New York.

Wang, T., & Toktay, B. L. (2008). Inventory management with demand forecasting and delivery flexibility. Management Science, 54(4), 716-732.

Ye, Z. (2013). Dell’s inventory management. Web.

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