Continuous Improvement in Apple’s Procurement Strategy

How Do Apple Look to Continuously Improve Their Procurement and Supplier Strategy?

The Apple approach to continuous improvement in their supplier relationships involves holding themselves and their suppliers accountable from the beginning of the process at product design to end-of-life recycling.  The strategy and standards apply across all parts of their procurement and supply chain relationships, regardless of the services the supplier provides to Apple.  

The company has a seven step process in remaining engaged with their suppliers and ensuring that any issues are rectified.  This involves taking action early, assessing and investigating problems, improving capability with education and finding remedies.

Continuous Improvement in Apple’s Procurement Strategy (Credit: Apple)

Apple’s Assessment Strategy for their Suppliers 

Apple assesses their supplier and procurement performance against their Code and Standards.  These criteria cover many areas like ethics, management systems, environment, health and safety, and human rights.  The globally conducted assessments are rigorous and can take up to a week depending on the size of the procurement partner.  

Continuous Improvement in Apple’s Procurement Strategy (Credit: Apple)

The assessment strategy involves document reviews, site walk-throughs, and interviews with the supplier’s employees and management teams. The company prohibits interference of any kind in our assessment process strategy. Apple involves independent, third-party auditors that are accredited to meet international auditing standards. Many of the firms that conduct the assessments are also those certified to meet the standards of the Responsible

Business Alliance (RBA). The third-party auditors evaluate suppliers against more than 500 criteria, verify compliance, and identify areas for improvement. Supplier employee interviews are conducted in a confidential space in the employees’ native language and without their managers or cameras present.

How do Apple Score their Suppliers

Apple uses a 100-point scale for their supplier assessment scores.  This divides procurement partners into either high, medium and low performing categories.  If violations are found with a supplier, Apple’s strategy is to initiate Corrective Action Plans (CAPs) Corrective Action Verifications (CAVs) to address the issues. 

The supplier is provided with feedback and identification of issues, and is then required to conduct root-cause analysis to develop the necessary corrective actions for the problem. As part of the process, Apple tasks a capability-building team to provide the supplier with training on industry best practices and guidance in resolving the problem, as well as help to strengthen their management systems and practices to prevent the issue from happening again in the future.

Apple 100 Pont Scale for Suppler Assessment (Credit: Apple)

Read how Nokia look to reward and grow the partners in their procurement and supply chain network here.


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