Apple Hbr Case Analysis

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Executive Summary
The case " Apple Computer 's Supplier Hubs: A Tale of Three Cities" deals with the imple-mentation of supplier hubs as an instrument to improve the flow of materials along a sup-ply chain based on the experience at Cork, Ireland and Fountain, Colorado.
Since the demand of Apple 's desktop PC and server PC products has rapidly increased there is a need to built new production lines, but at the same time a need to store more material at the manufacturing site. To solve this problem the supplier hub seems the most attractive option to us because Apple not only solves the space problem but also manages to have declining material and capital cost, while increasing flexibility and raw material quality. In a
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Adopting a ‘Supplier Hub’ strategy, helped apple to defer payment of applicable material duties, thus saving interest cost on the duty paid 6. Apple was better placed to negotiate pricing of components on an on-going basis, thus reducing COGS by 2%-3% A. Changes made? * An IT application ‘FLEX’ that could track materials from origin to Apple’s production line came in to existence , this immensely helped in tracking material flow  On Order: P.O. entered  Booked: Units of transportation capacity reserved, not yet shipped
 In-Transit: Shipped from supplier, customs entry not yet filed
 At Customs: En route, customs entry filed
 Inland transit: Picked up at port of entry, en route to Fountain
 At the Warehouse: Received by the warehouse, in stock
 Released from the Warehouse * Agreements with suppliers were re-negotiated, by bringing in ‘Fritz’, thus minimizing the need for Apple to deal with multiple suppliers on a day to day basis, just initiating a ‘PO’ would be Apple’s job, and ‘Fritz’ would take it up from there * Standardized pallets were introduced to help in accounting for suppliers inventory B. Fritz role? * Customs clearance of imported materials * Manually segregating defective inventory from the rest and updating the information in ‘FLEX’ * Sending out component status reports to ‘Suppliers’ on an ongoing basis * Insuring inventory & sharing risk with

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