Strategic Performance Measurement Systems

Introduction


The smartphone industry quickly changes and evolves, as depicted by the evolving models of either iPhone or Samsung. But in history, the industry of this technological and telecommunications device is a picture of revolutionary transformation. In the Televisory (2019) blog, the smartphone device was introduced about a decade ago and has changed since—from the simple mobile handsets or conventional models with limited functionalities, until it leaped into a phone that allows usage of high Internet speed to perform variety of activities like video calls, reading books, booking flights to scheduling doctor’s appointment. Over time, people across the world switched to smartphones from the conventional handsets.
With how smartphones are part of the daily lives of people nowadays, manufacturers and brands must ensure that they can keep with competition. Both Apple and Samsung are known as the strong contenders in the smartphone market and surely, each has unique manufacturing processes to ensure quality products. For this report, Apple’s performance measurements as represented by good indicators will be explored. Specifically, the three types of indicators will be discussed—initial indicators, intermediate indicators and final or result indicators.

Initial Indicators


Smartphone companies like Apple work with suppliers for quality and appropriate materials to be sourced. The quality of raw materials is an important aspect and starting point for the production of iPhones. In its “Material Impact Profiles” report, Apple (2019) underscored its programs ensuring that its materials are sourced responsibly, where it applies strict standards and internationally accepted frameworks like the OECD due diligence. One of the goals is to “identify, develop and utilize safer materials in products and processes” (Apple 2019, p.2). Under such goal, Apple is required to develop new recovery technologies, new materials and new ways of doing business. Among the actions undertaken by the famous smartphone company was to identify shortlist of materials to focus on and aid the company’s transition to 100% recycled and renewable material and processes.
Apple worked with the government and different partners and organizations like Fairphone and The Dragonfly Initiative in order to identify dangerous materials and sustainable ones. The outcome of such efforts was the assessment that does not only include risks and effects of materials to supply, but also environmental and social effects in the global supply chain. Apple as well places scores on the materials where a higher score means greater impacts. The table below summarizes the details on what are considered as initial indicators for materials used by Apple for manufacturing its iPhone products.

Supply Impacts Environmental Impacts Social Impacts


Companionality Is global production limited, especially in a way that does not respond to normal market signals? Geochemical What is the potential for pollutants or hazardous materials to be released into the environment? Artisanal Mining To what extent does the global industry rely on artisanal mining of the material?
Geographic Production Concentration Is global production concentrated in only a few countries, or spread across many regions? Chemical Usage To what extent are hazardous chemicals used in production? Child Labor and Forced Labor To what extent is extraction of the material correlated with child or forced labor practices?
Reserve Concentration Is the total amount of reserves concentrated in only a few countries? Life Cycle Impacts How carbon- and water-intensive is the material? Corruption and Conflict To what extent is extraction of the material correlated with corruption or local conflicts?
Global Recycling Rate at End of Life To what extent is the material currently being recycled? Specific Recyclability When used in consumer electronics, how recyclable is the material? Substitutability If the material becomes unavailable, is there a technically viable alternative? Political Stability in Producing Countries What is the potential for a political event to significantly disrupt global supply? Political Stability in Reserve Holding Countries What is the potential for a political event to significantly disrupt global supply? Source: Apple Material Impact Profiles, 2019

Intermediate Indicators


Apple could not process its products without the design. Hence why, Apple’s product development process is largely made up of the design process. As what the Interaction Design Foundation (2020) discussed, Apple is secretive in terms of its internal workings, including the important manufacturing and product development processes, but it was revealed that design is at the forefront of its product development process. Everything happens in its Industrial Design Studio were only few selected Apple employees can access. The design teams are also separated from the rest of the business units and can even employ physical controls to prevent the team from interacting with other Apple employees. The design team is also removed from the traditional hierarchy for them to fully focus on the day’s work. Initially, the design or the Apple New Product Process (ANPP) information is provided to the product development team from the first stage of the work. The information will aid on determining the stages, the persons responsible for delivering the final product and who works on every stage, the place to work, and the expected completion date.
In this case, the intermediate process will be focused on the design process of an iPhone. Some basic indicators of the design of an iPhone were presented in a blog by Ivo Mynttinen and these are summarized in the table below.


Final Indicators


The final indicators of designing, manufacturing or processing an iPhone would clearly be the phone itself. The design indicators are already both the external and internal features of the iPhone and they can be used as indicators to check if the expected design (depending on the model of the iPhone) is met. Tests are also conducted to ensure quality of the phone, which may include durability for the external features and navigation for the internal features of the smartphone. Apple as well conducts launching and product testing to be done by consumers as scheduled, every time a new model is released. It is only in several kinds of tests that one can determine if an iPhone and even other Apple products are ready to be sold to the market.
The design costs of an iPhone can rely on the manufacturer as prices of certain elements can be offset by a previous device and therefore reduces cost. An example could be how handset makers can apply the engineering ability acquired from working on one product to the manufacturer of a similar, later model—this is called “trickle-down design.” Apple upgrades the features of its every new model of an iPhone and that would mean extra costs when compared to the older version. (Martin, 2020)
In the long run, the popularity and dominance of the Apple brand, especially iPhone reflects that its product depicts quality and holds the important features a smartphone should have. Some may consider an iPhone exceptional over others, especially when customers are satisfied in terms of hardware design and features, the operating system and interface, network technology, included software, manufacturing brand, and cost.

References

 

  • Apple (2019). Material Impact Profiles: Which materials to prioritize for a 100 percent recycled and renewable supply chain? Retrieved from <https://www.apple.com/environment/pdf/Apple_Material_Impact_Profiles_April2019.pdf>
  • Interaction Design Foundation (2020). Apple’s Product Development Process – Inside the World’s Greatest Design Organization. Retrieved from <https://www.interaction-design.org/literature/article/apple-s-product-development-process-inside-the-world-s-greatest-design-organization>
  • Martin, A. (2020). How much does an iPhone cost to make? IT Pro. Retrieved from <https://www.itpro.co.uk/mobile/34617/how-much-does-an-iphone-cost-to-make>
  • Televisory (2019). Changing trends in Smartphone industry in 2019; iPhone losing market share. Retrieved from < https://www.televisory.com/blogs/-/blogs/changing-trends-in-smartphone-industry-in-2019-iphone-losing-market-share>