Key Performance Indicators for Apple Inc

Apple Inc is a multinational corporation that develops, designs and sells personal computer, consumer electronics and computer software. The company was incorporated in 1976 and its headquarters are located in United States. In terms of revenue, it is the second largest IT Company and third largest in mobile phone manufacturing. In 2012, the company had already established 394 retail stores, which are located in fourteen countries. Apple Inc has a market capitalization value of $414 billion. Last year, the company had a revenue of $156 billion in its worldwide operations. As at September 2012, there was 72,800 permanent employees that worked on a full time-time basis and 3,300 that worked on a part-time basis (Zylla-Woellner, 2013). Apple Inc’s success has been attributed by effective operations and favorable relationships among the available stakeholders. However, the company still has more room of improvement. In pursuit of managing quality, the organization might prompt to use performance indicators. Key Performance Indicators entail metrics and measurement that helps an organization in attaining its objectives and goals. Every company has specified degree towards which it measures itself. On most occasions the measurements are based on historical information, but aim at improving future ventures. They are highly effective for quantifying, visualizing and exposing wasteful activities. To some extent they are efficient in creating motivation aspects of the side of employees. Apple Inc should consider the SMART acronym before choosing any performance indicators. This stands for relevant, specific, timely, achievable and measurable. Having this in mind ensures that the organization will attain the best results due to the realistic nature provided. The three Key Performance Indicators that Apple Inc should use include; employee satisfaction, revenue and supply chain management.

At the end of 2012, Apple Inc had more than 76,000 employees working on full-time basis. Employees are critical assets to the organization based on the nature of operations that they undertake. Some of the jobs executed by the employees are technical and cannot be executed by other personnel. They require some level of specialty and experience. This means that it would be very detrimental if the organization was to lose these employees. Occurrence of such events would result to the competitors gaining an upper hand since they would hire them. Quality management needs to be enhanced on the side of the employees so as to ensure that they remain in the organization for as long as possible. The only way to ensure that this is attained is through enhancing consumer satisfaction. There are several ways that Apple Inc can use in order to enhance consumer satisfaction. One is by providing favorable working conditions. Some time back, the company had been accused of providing unfavorable working environment for its employees. This was more prevalent in its production plant called Foxconn which is located in China. The occurrence of poor working environment had contributed to increased suicide from the employees (Samsonowa, 2012). Apple Inc can also provide consumer satisfaction by providing favorable remuneration.

There are several ways that data for employee satisfaction as a performance indicator can be collected and analyzed. Among them is conducting regular surveys in regard of employee satisfaction. The best way to provide is by providing employees with questionnaires.  Questionnaires are the best tools to use based on their attribute. They present some level of confidentiality since it is not possible to tell which employee was supplied with a certain questionnaire (Oakland, 1999). It builds the confidence of employees, and hence helps them in communicating freely without any fear. The relevant department should then collect the questionnaires for analyses. Common problems should be obtained from the analytical process. If it is possible the company should deploy an independent body to undertake the analysis process in order to avoid biasness. Relevant and appropriate actions should be taken so as to help in dealing with the issues that seem to decoy employees their satisfaction.

Another way that employee satisfaction data can be collected is by analyzing the rates of staff turnover. If the rates are extremely high, then this is a likely indication that employee satisfaction is not being enhanced. To this effect, Apple Inc should take the initiative of digging dip and establish the root cause of the problem. It might be a minor problem that is resulting to these turnovers, but might be detrimental to future operations of the company. Failure to finding a solution to the problem might result to a brain drain of the best employees of the company. This diminishes the quality aspects o the products and services being offered. Apple Inc can also use participation levels of employees in assessing the effectiveness of employee satisfaction.  The participation aspect to be focused on is improvement activities. Employees whose satisfaction levels are not met do not possess a drive of enhancing favorable operations in the organization. There is no sense of belonging hence lack of initiative to make the company successful (Pyles, Prussak & Regan, 2008). These instances can be identified when employees are receptive to changes which are aimed at bringing success to the organization. When the employees are satisfied, they will ensure that the company remains in operation for as long as possible. In this quest, they will be actively involved in improvement activities.

Revenue being generated is another key performance indicator that the organization can use. Apple Inc is believed to be the second largest IT Company in terms of revenues. It is only second to Samsung under this array. In terms of mobile manufacturing, it is the third largest based on its revenue prospects. The company’s revenue has been increasing since 2004. However, growth trajectory seems to be flattening along this period. It is an indication that the growth is diminishing to some aspect. In 2012, the company had total revenue of $ 156 billion (Lüsted, 2012). In April this year, the company has announced its revenue for the first quarter to be $ 43.6 billion. Based in this statistics, the organization has the ability of meeting its last year’s revenue threshold. This is because the current quarter usually experiences minimal revenues compared to the others due to the nature of the industry. Providing consumers with quality products will help in maintaining high profitable levels in the organization. The more the consumers are satisfied, the more they tend to purchase the company’s products. Revenue can be used as a performance indicator in this filed in order to manage quality.

There are a variety of ways that data relating to revenue can be collected. Among them is analyzing the company sales levels. The company’s sales usually affect the revenue to a great extent. For Apple Inc, their sales levels seem to be increasing with every year of operation. This has been attributed to operational activities being conducted in the organization. Among the activities includes addition of new products in the company’s offering. Data regarding the sales can be obtained from past operations that the organization has been involved in. For analysis purposes, Apple will compare the current sales data with past operations. If there is an increase, then the organization is handling its activities appropriately. If there is a decline, then something is wrong. Decline in sales will mean that the total revenues will also experience some decline. Under such a scenario, the organization needs to revisit its activities and identify the cause of the decline. Both strategic and operational activities should be initiated to ensure that the sales levels remain high. Data from the competitors can also be used for the analysis process. For effectiveness, the growth levels of the competitors should not be very high compared to Apple Inc. When they are higher, it is an indication that the competitors are acquiring a higher market share. In the long-run, their revenues might be high compared to those of Apple Inc.

Data for analyzing the company’s revenue can also be obtained from the company’s gross margins. For there to be an increase in revenue, the margins need to be increasing. Decreasing gross margins result to a reduction in revenues. Apple Inc can also compares its margins with the industry’s standard. If they are lower compared to the industry threshold, then they are performing poorly. On the other hand if they are higher, it means that the operations being undertaken are effective. High gross margins result to higher revenue prospects. The organization might also use return on investment as a source of data for measuring the revenue prospects. For favorable revenues, the return on investments should be high. If the output is more than the input, then the organization is doing well. It is an indication that the organization’s revenue will be high too. When there are shortcomings it is easier to develop strategies to deal with a single problem rather than generalizing the entire revenue aspect (Pyles, Prussak & Regan, 2008).

Supply chain management can also be used as a performance indicator that can enable Apple Inc to manage quality. Apple’s supply chain includes suppliers of raw materials, producers, intermediaries (retailers and wholesalers) and end consumers.  For the production aspects, Apple Inc has opted to outsource the activity to a company based in China. This company is known as Foxconn, and has the reputation of receiving such contracts from other big companies in this industry. In recent times, the relationship between Apple and Foxconn has not been very favorable. In 2011, Apple Inc ordered an audit of the employees working condition in its segments. This came about due to various complains that associated employees’ suicide cases with the working environment in Foxconn plant. An effective supply chain management would be a key performance indicator to the organization since it would help in managing quality (Samsonowa, 2012).

Among the sources of data regarding the supply chain management is the suppliers involved. Suppliers usually determine the quality aspects of the products that will be manufactured. If they supply inferior raw materials, then the end products will be of low quality. Apple Inc needs to check on the reputation of the organization to be contracted. This is based on other operations that the organization has been involved in. The public perception is very important. Based on this, the organization should initiate operations with companies that have already built a name for themselves. It helps in building trust with other stakeholders in the supply chain. It is also the duty of the organization to inspect the level to which the suppliers involved honor their contracts. This is because Apple Inc has to sign quality assurance contracts with its suppliers. If the supplier has a track record of not honoring such contracts to the letter, then they are not favorable to operate with. The organization needs to go for those suppliers that will bring quality in supply chain management.

Another source of data for analyzing the supply chain management is communication. For an effective supply chain management, there needs to be communication among all the relevant stakeholders. An appropriate way of analyzing this realization is checking whether the consumer needs are met. The company should have the ability of communicating with other stakeholders so as to identify what consumers really want. If their needs are reflected in the end products, then the communication within the supply chain is effective (Bell, Wilson & McBride1998).

Conflict aspects of the stakeholders involved is another way that data might be collected in this array. In Apple Inc, the recent conflict has been between the company and Foxconn. It is believed that Apple has had to return more than 5 million iPhones to Foxconn due to manufacturing defects. If apple was to supply these products to its intermediaries, it would develop conflicts with this group too. This is because the quality aspects are compromised. By using supply chain management as a performance indicator, Apple Inc should be able to eliminate these conflicts. Failure to do so would jeopardize the company’s operations.



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