1.
SUPPLY CHAIN MANAGEMENT
APPLE & CONFLICT MINERALS:
ETHICAL SOURCING FOR
SUSTAINABILITY
Presented By:
Bhawesh Agrawal
Priyank Pradhan
Nihar Ranjan Pradhan
Raj Kumar Singh
Vedant Desai
C.Bharat
Nupur Harde
M.Charankumar

2.
Introduction
Steve Jobs, RonaldWayne, Steve Wozniak

3.
• Apple was established on April 1, 1976
• In May 2014, Apple released its first conflict minerals report
• In the year 2010, Apple started facing criticism
• Since 1980, Apple started facing stiff competition
• In the years 1983 and 1984, Apple bounced back

4.
• In 1983, Apple introduced the first commercial computer, LISA with a price of
$9,995
• In 1984, Apple launched Macintosh which was priced $2,495
• Decrease in 17% income after launch of Macintosh
• In 1985, Jobs resigned from Apple and started NeXT
• In 1996, Apple reported loss of $69 million
• Apple purchased NeXT for $400 million

5.
• Steve Jobs launched iMac for just $1,299 which was supported by $100 million
advertising campaign.
• Over 278,000 units sold in first six weeks.
• This generated profit of $309 million in 1998.
• Introduction of iTunes and iPod in 2001.
• Opening of Apple Retail Stores.
• By 2011, Apple had 357 retail stores worldwide and its presence in 11 countries.
• During 2011, Apple sold 72.29 million iPhones, 32.39 million iPads and 42.62
million iPods.

6.
Successful Products Unsuccessful Products
Apple II LISA
Apple Macintosh Newton
iMac Pippin
iPod Power Mac G4 Cube
iPhone AppleTV
Apple Product Range

7.
SUPPLY CHAIN MODEL OF APPLE
Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected…
-Steve Jobs

8.
APPLE AND CONFLICT MINERALS
• Being one of the major consumers of conflict minerals, the electronics industry was
facing increased criticism from human rights organizations regarding their use in its
products.
• The stupendous sales growth experienced by Apple’s products since the launch of
the iPhone in 2007 made it rely on manufacturers in Asia like Foxcom Technology
Group (Foxcom) for manufacturing its products...

9.
Some Glances on the protest…

10.
CONTROVERSY OF CONFLICT MATERIALS
• Conflict minerals are the natural resources that were mined in places impacted
by conflicts and sold for funding Congo armed groups.
• In Congo Tutsi tribe led M23 rebels were fighting the government forces to control
mining activities.
• Conflict metals which are extracted from ore are Tantalum, Tin, Tungsten and Gold.
• These metals were used for manufacturing parts used in cell phones, tablets, laptops,
aircraft and medical equipment.
• The revenue gained by selling the conflict minerals were used for their
operations.
• Minerals extracted from the mines were smuggled to smelters at
neighboring countries.
• Local people and children were often forced to work in illegal mining.

11.
• The issue of regulating conflict minerals first emerged during late 1990’s in
the UN General meeting.
• In 2010 Senator Sam Brownback introduced provisions similar to that of the
Congo conflict minerals act of 2009 and that act was successfully passed in
US congress.
• Section 1502 of the Dodd-frank act made it mandatory for all the
publicly traded companies to ensure that the raw materials used to make
their products were not linked to conflicts in Congo.

12.
Continuing the efforts
• Products free of conflict minerals
• Apple Supplier Code of Conduct for 2014 – Responsible SC of minerals
• Put on us on suppliers to check
• 8th annual supplier responsibility report - 2014

13.
Challenges Outside Africa
• Apple did not limit its ethical sourcing of minerals to Africa.
• A Significant part of some of the key minerals like tin, was sourced from
places outside Africa.
• Any company that needed tin in its products had to invariably source it from
Indonesia as Indonesia was the second largest producer of tin in the world.
• Nearly 90 percent of Indonesia’s tin was produced in the Bangka and
Belitung Islands....
• Foxconn maid a significant percentage of apples product like iPhones,
iPods.
• Responding to allegations apple’s executives immediately visited Indonesia.

14.
Looking Ahead
• Apple spent millions of dollars investigating its supply chains to figure out
which components might contain gold, tin, tungsten and tantalum.
• Apple aimed to get all the smelters in the world from which it procured its
minerals certified as conflict free.
• Apple entered into partnerships with a number of Government and Non-
Government organisations to properly regulate the use of conflict minerals in
its products.

15.
Item 2011 2012 2013 2014
Revenues 108249 156508 170910 182795
COGS 64431 87846 106606 112258
Gross Profit 43818 68662 64304 70537
Selling & admin expenses 7599 10040 10830 11993
R & D Expenses 2429 3381 4475 6041
Other operating Expenses
(Total)
10028 13421 15305 18034
Operating Income 33790 55241 48999 52503
Interest & Dividend Earned 519 1088 1480 1411
Other Expanse 104 566 324 431
Income tax Expense 8283 14030 13118 13973
Net Income 25922 41733 37037 39510
Financial of Apple Inc. (Currency in million US$)