Apple loses two key operations, supply chain executives: What it means for the company's future

Apple is all about the customer experience, even in ways customers may not notice. This team is responsible for keeping things humming as finished products move through our supply chain and sales channels. And they work cross-functionally with other Apple teams to come up with ways to improve processes, such as making it simple for customers to order a product online and pick it up in a store. Areas of work include Project Management.

Apple loses two key operations, supply chain executives

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While not related to recent events, the departures come at a time when Apple is trying its best to reduce the impact from the coronavirus crisis and to manage expectations around worldwide iPhone shipments. Supply chain issues aside, this week the company tried to stop one of its former executives from publishing a book that it claims is betraying some of its most guarded business secrets.

According to the report, Forlenza had worked under Sabih Kahn, Apple's senior VP of operations, as an executive in charge of manufacturing design. Forlenza led a team of supply chain and operations executives responsible for global production processes and manufacturing equipment.

The most resilient and agile supply chains are designed to do more than simply resist and recover. They are built using processes and modern supply chain technologies that allow them to forecast, anticipate, and respond quickly to whatever risks or opportunities the future brings.

As long as there have been supply chains, risk management has been a challenge. Due to the interdependency of all its links, even a small problem in one isolated region has the capacity to compromise an entire global supply chain. So, when major worldwide trends and events take place, the potential for widespread supply chain disruption is enormous. The pandemic illustrated this fact in an unprecedented fashion with the knock-on effects of labor shortages and inventory depletion predicted to carry on well into the foreseeable future.

Even before the repercussions of COVID-19, U.S. businesses were striving to reduce their dependency upon overseas manufacturers and suppliers. By 2019, foreign tariffs and overseas trade policies had become increasingly unpredictable and businesses were looking for technological solutions to make their supply chains more self-reliant and resilient. Integrating digital transformation and Industry 4.0 technologies into supply chain operations is becoming a growing priority for global business leaders.

In an increasingly competitive market, finding a profitable balance between supply and demand is a major challenge for every supply chain manager. Many companies that cut corners on diversification, supply chain technologies, and other resilience measures have recently been finding out the true cost of those decisions. But when companies invest in diversification, supply chain technologies, and other resilience measures, there are many potential business benefits, including:

When Motorola Inc. split into two companies in 2011, executives at the newly formed Motorola Solutions Inc. began searching for a more effective way to build a customer-driven, global supply chain program. Forced to assess their outdated business processes, company executives quickly realized that their plans to develop a new supply chain strategy could not be supported by the various legacy systems, ERP environments and channel partners that the new company had inherited from Motorola Inc.

To achieve these goals, Motorola Solutions adopted E2open's any-to-any cloud-based platform, with the idea that by helping partners exchange data in any preferred payload format and protocol, Motorola Solutions customers would improve their responsiveness, increase inventory turnover, and add supply chain processes across both supply and demand side operations.

In a very competitive environment, where high-tech companies are scrambling to find ways to bolster key performance indicators such as on time deliveries, inventory turns, accurate forecasting and improving parts shortages, Motorola Solutions' story should strike a nerve with supply chain managers.

Reverse logistics and its management are one of the big challenges within supply chain industries. As a result of increasing e-commerce returns, packaging and waste are increasing as well. So, this is causing disposal costs that come with further costs like warehousing and storage costs for storing returns. There are more reasons for having good reverse logistics management, so what can be the value of it?

Good reverse logistics management is crucial to run any warehouse or logistics service today successfully. In 2017, the reverse logistics supply chain was valued at $415.5 billion and is expected to be worth $603.90 billion by 2025.

When leading companies estimated the percentage of their total supply chain costs devoted to reverse logistics, companies with well-managed reverse logistics operations spent as little as 1 % of their total supply chain costs on processing returns. On the other side, companies with poorly managed reverse logistics processes spent as much as 10 % of their total supply chain costs on returns. The lesson is clear: When you invest in the proper training and procedures for a successful reverse logistics supply chain, you can save significantly more money and resources.

However, 3 PL companies must also face challenges and costs linked to setting up a well-managed reverse logistics supply chain. As with forwarding logistics, mistakes made by a 3 PL service provider reflect negatively on the manufacturer and potentially damage its reputation and customer relationships.

Additionally, a 3 PL company may be able to quickly hire many warehouse workers to process returns for a manufacturer. But good warehouse worker training programs and education for temp workers about the reverse logistics supply chain are necessary to ensure the reverse logistics operations are successful. Moreover, 3 PL companies that rely on temporary workers to meet demand must ensure that standardized procedures are in place for every step of the reverse logistics process to keep operations moving.

Gary Steinberg [00:01:11] Gregg, thank you for having me today. I really appreciate it. I'm looking forward to our discussion. My experience: I've been in the supply chain for over 40 years and actually been supporting CMTC in this role for the last 18 months. Very happy to be here and share my experiences and try to help create what I consider a more resilient supply chain.

Gregg Profozich [00:01:33] Excellent, Gary. Thank you so much. I'm excited about our conversation today. I'm looking forward to hearing your perspectives and your insights. Let's get started. There's no doubt that the pandemic has changed the world in unprecedented ways, from lockdowns to social distancing to vaccine and mask mandates to the major shift in working from home for many people. So many aspects of society have been impacted. From a high level, what has been the effect on the global supply chains of the pandemic?

Gary Steinberg [00:01:59] The impact of supply chains have been severe. A recent survey, this particular one from Accenture, a survey of Fortune 1000 companies, that 75% of their supply chains have been negatively impacted, while 50% have responded with their costs and forecasted sales growth have been negatively impacted. We've also seen a lot of shifts in the labor force. We've seen a lot of shortage of workers throughout a lot of different industries. Especially hit hard is the service industries, where we're seeing work is shifting from lower to higher-paying jobs. All that has had a severe impact on global supply chains.

Gregg Profozich [00:02:43] I think it's been in the news a lot lately. But 75% negatively impacted. That's pretty significant. These supply chains stretch in many cases around the world and across many, many different borders. I'm sure that causes a whole lot of complexity into the movement and flow of goods. Why is supply chain such a critical issue for manufacturers and for everyone, really?

Gary Steinberg [00:04:26] That's very accurate. That's why CMTC and a lot of us in the supply chain are really recommending to the SMMs, small and medium-sized companies, really take a hard look at reshoring your supply chains. I know we'll probably discuss this in more detail later. But again, there's a tremendous amount of risk today in China, because they're having the same type of issues that we're having. They're facing labor shortages. Also, what we're seeing in China is a lot of government restrictions, new laws, new restrictions that are having an impact on a lot of different companies in China. Unless you're a big company that have deep rooted relationships in China, this becomes a very, very severe issue for the small and medium-sized company that don't have those types of relationships.

Gregg Profozich [00:05:35] There are many different issues going on. We want to delve into all of those. But we're here to talk today about supply chain resiliency. Before we get into some of the nuts and bolts of that, to put things in context for our listeners, how about if you define for us exactly what supply chain resiliency means.

Gregg Profozich [00:06:53] If I was to listen to what you're saying and try to paraphrase it back, supply chain resiliency is really the ability for a trading actor within a supply chain, small and mid-sized manufacturer in many cases that we're talking to, to have a capacity to resist and recover from any kind of unplanned events or disruption.

Gary Steinberg [00:07:11] You got to minimize those risks to create a resilient supply chain. For example, in today's supply chain we're seeing global shortages, and we're seeing that, say, in memory chips. We know that they're impacting a lot of industries, particularly the auto industry. We see that in the newspapers every day. It's very hard to counterbalance, to counteract that type of situation. We can do our best and go out to what I call the gray market, things like that, but that's not a sustainable counteractivity. Not in all cases can we build a resilient supply chain for every event that is in the world. We do our best. I think that's the key. We do our best to create those activities and those actions that can limit our risk in the supply chain. 2ff7e9595c