BUS 499 Inventory Management – Samsung and Apple

Samsung and Apple companies are leading companies in the global electronics industry. The two companies have largely invested in research in the development of new products in order to cope up with high competition in this industry as well as the evolving nature of customer needs and technological advancement.  The two companies manufacture mobile phones and computers as their main products. However, Samsung has diversified its product base to include other electronic products such as television sets and refrigerators among other products. The two companies have put in place elaborate inventory management systems that that are unique and relevant to their individual operations.

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Types of inventories and essential characteristics

The Apple Company maintains two major types of inventory. These include the parts inventory and the products inventory. The part inventory includes all the parts that the company sources from suppliers and uses them in the manufacture of its products.  The unique way in which Apple has been able to manage this type of inventory is through shipping parts directly to the manufacturing plant. This way, the company has been able to cut down on storage costs and maintained low inventory.

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The second inventory that the Apple Company maintains is the finished product inventory. The company has a wide product base. The major inventories for apple under this category include IPhone, IPad, MacBook, Mac Mini, MacBook air and Small Cover among other inventories.  The company has largely invested in innovation in order to develop unique products that differentiate the company within the industry.

Samsung equally has a wide range of inventory. Their products range from LCD panels, home appliance electronics to mobile phones.  These are the major inventory under the finished goods inventory category. However, the company equally maintains raw material or parts category of inventory as well as the intermediary inventory that help in the development of finished goods.

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Design Concept Integration   

The Apple Company has largely employed the service design concept that that contributes to the unique characteristics of its products and helps in distinguishing their products from other products. The design concept of the Apple Company follows an established integration mechanism. This integration mechanism was established by Steve Jobs and Frog and is mainly focused on the exploitation of user orientation to attain value (Hills & Hills, 2012). The company has demonstrated consistency to this approach over the years it has been in operation. Most notable is the company’s commitment to adding visual designs, creativity, modern systems and simplicity to its innovative work.

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User driven production is a significant factor in design element determination. As the company seeks to solidify its market in the near future it will need to make designs, carry out experiments and develop prototypes that are in line with the expected trends in customer taste and preferences (Godfrey, 2015). The main drive for this product change will be the changing customer preference towards gadgets with smarter software and three dimensional interfaces. 

On the other hand, Samsung product design was more sophisticated prior to the emergence and development of iPhone. Competition from the Apple Company led Samsung to develop products that largely resembled Apple products. Samsung has used some products features that are patented by Apple. These include data detection, slide to open and auto correction (Blanchard, 2010). While this has led to law suits between the two companies, it has equally shaped the design concept for the Samsung Company.

The Role of Inventory In Company success

The success of the Apple Company can largely be attributed to both their inventory system complexity as well as their distribution networks. The nature of the mobile phone and computers markets require companies that venture in such markets not only to satisfy the demands of the market but also create products that are user friendly. The apple company has taken advantage of this fact and hence been able to create customer loyalty (Hill & Hill, 2012). In doing so, Apple has developed a system of obtaining customer feedback.  The customers are able to give feedback on the ease of using specific features as well as the challenges they encounter. Consequently, Apple is able to customize the features of their products based on the customer feedback and hence develop products that are user friendly. This has increased customer satisfaction tremendously and led to an increase both in the sales volume as well as the overall company bottom-line.

The apple company has set an elaborate distribution network that is efficient in ensuring that both the warehouses as well as retail shops are equipped with sufficient volumes of the inventory. This helps the company to meet the increased levels of demand for its products in the market. The continuous supply of inventory both to the retail shops and the warehouse enhances the operational efficiency of the company. 

Samsung has equally gained advantage through its management of inventory. The operation of online store in Samsung has been a great success for the company. It has enabled the company to reach out to markets that could not ordinarily get their physical retail stores. This has increased sales volume and consequently improved the company’s bottom-line. Moreover, Samsung has improved its operational efficiency by providing a way through which their customers can effectively switch from a vendor with long product lead time to one with a shorter product lead-time.

Types of Layouts

Both Samsung and Apple have innovative yet distinct layout. The distinction and the innovation in their individual layouts contribute to the overall competitiveness of their respective brands from a global market perspective. The layout type for both companies includes keyboard, screen sensor, touch pads as well as Retina display among others (Muller, 2011).  The major similarity between the layouts of the companies is that the products of both companies have sensor screens, Unique keyboards and touch pads in their respective products of galaxy s series as well as IPhones. However, the distinctive factor in their layouts is in the fact that Apple’s IPhones have retina displays that are more developed compared to the retina display in Samsung products.

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Apple has been able to use its product layout to tremendously outdo competitors in the global market.  The success of a business in a competitive market environment largely depends on the product lay out of the business (Williams, 2015). The Apple Company has restricted its product development on a specific layout and hence maintained the production of outstanding products of technology. Moreover, the Apple layout maintains simplicity in the interest of the end user and hence outdoes competitors who depend on complicated layouts.   

On the other hand, Samsung has a different perception of product layout. To Samsung, product layout is primarily for defending the company’s interests while it manufactures a broad range of products. As such, the company only uses product layouts to patent their technologies and products and hence avoid imitation. In doing so, Samsung has failed to maximize on the potential of layouts in marketing (Godfrey, 2005).

Metrics of Supply Chain Evaluation

There are two major metrics that can be used to evaluate the effectiveness of a supply chain. The first metrics is production and delivery while the second metrics is I supplies. The production and delivery metrics is a measure of how effective the supply chain is in producing the required products at the required time and supplying them to the warehouse. The delivery metrics measures the ability of the supply chain to provide the products to the customers how and when they need them.

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There are great improvement opportunities in the Samsung supply chain management systems based on the two metrics identified above. For instance, the company manufactures its products in South Korea and distributes them to retail shops across the world. The company should consider making use of a system that identifies product needs in different parts of the world and hence stocks them ahead of demand. This will reduce the company’s product lead time and enhance the performance of its supply chain on the metric of delivery.

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The Apple Company equally has an improvement opportunity in its supply chain management system. However, it is imperative to note that the company has an effective and elaborate supply chain management system that ensures that all stores are equips according to the needs of the market in those specific areas. The major improvement opportunity is in the broadening of the supplier base.  The company reduced its suppliers from 100 to 24. The Effect of this is that, when the few suppliers fail, the company may fail to meet the needs of the market. Consequently, it is imperative to broaden the supplier base and create alternative suppliers. 

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Ways to improve management of Inventory

The success of any organization is largely dependent on its ability to manage its inventory effectively and efficiently. There are three fundamental approaches that an organization can take in maximizing the efficiency of its inventory management. These include optimizing, maximizing and minimizing (Godfrey, 2015). The management of the organization should consider their individual product capability and chose a strategy that is best placed to fast track growth in their respective organization. For the Apple Company, there is need for the organization to minimize inventory considering the elaborate structure of distribution that the company has put in place. The efficiency of it structure of distribution and tracking customer requirements makes it possible for Apple to produce only depending on the demand.  Therefore, the Apple Company can take advantage of this fact and minimize on their inventory.

On the contrary, Samsung must work on inventory optimization. The company has not been able to meet customer demand owing to poor distribution strategies. There is need for the organization to develop a structure that will optimize inventory and be able to meet such customer demands.

Conclusion

In conclusion, proper management of inventory has a great influence on the success of an organization. It determines the organizational ability to satisfy the demands of the market and hence improve its market share. Moreover, an effective inventory management system is required to increase the overall bottom-line of an organization. Therefore, both Samsung and Apple must endeavor to put in place inventory management systems that address their unique challenges.

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