Navigating the Twists and Turns of the High Tech Market
Few markets are as sensitive to the twists and turns of consumer demand as hi-tech. Always on the lookout for the next big thing, fickle consumers drive demand to extraordinary heights one day – and to unexpected depths the next when the next bigger thing arrives on the scene.
Over the past two decades, the hi-tech industry has seen dramatic acceleration in the pace of both innovation and product introduction schedules. That’s great if you’re a consumer. If you’re a hi-tech manufacturer or retailer? Not so much. In fact, these mercurial ups and downs can wreak havoc on inventory performance and even the most skillfully calibrated production schedules.
Master the hi-tech slopes like an alpine skiing ace
So, how do you strike a balance between satisfying consumer demand and not getting caught off-guard with inventory overhangs when demand slumps? In some ways, the secret to managing the hi-tech supply chain is like mastering the twists and turns of a downhill ski course.
In both alpine racing and hi-tech manufacturing/retailing, success depends on navigating fast turns. It means rapidly surmounting obstacles and deftly negotiating peaks and valleys. Reaching the finish line faster than your competitors in downhill skiing means being able to execute lightning-fast and often blind turns around gates and thinking far enough ahead to know how you’ll tackle each one. It means handling varying gradients with ease, and being ready to improvise in a split second.
Are you managing a hi-tech supply chain in today’s ultra-competitive market? You have to be able to shift directions in a heartbeat, scale up or down quickly as conditions change and get your products to market at lightning speed. And that means knowing where your obstacles are …
What trends and challenges are impacting today’s hi-tech supply chains?
Want to turn shifts in the economic, environmental and customer landscape to your advantage? Understanding the trends and issues shaping the market is half the battle. Before you hurtle down the hi-tech mountain, factor these trends into your supply chain strategy:
- A revolution in consumer buying patterns: More and more hi-tech sales are taking place over the Internet. Today’s empowered consumers, armed with information gleaned from the web and social media, are in the driver’s seat. They’re increasingly likely to visit stores, compare models and features and price-shop online or via mobile devices before making purchase decisions. Or vice-versa. To compete smarter and capture customers with newfound negotiating power, manufacturers must rethink the entire supply chain – from streamlining transportation and distribution networks to improving procurements and operational efficiencies.
- Continued offshoring of production to Asia: Are you sourcing products from factories in Asia? Do unexpected delays or quality issues keep you from getting products to store shelves on time? Looking for better ways to align supply with demand?The benefits of offshoring are compelling: lower labor costs, plentiful natural resources, cheap land and factories and a skilled workforce. However, longer, unwieldy supply chains come with their own set of challenges. Avoiding the pitfalls requires a roadmap, a flexible supply chain and often, an experienced partner with boots on the ground.
- Dynamic sourcing, packaging and configuration/customization: As consumer preferences become more personalized and complex, suppliers and logistics providers must step up to the plate. No longer can products be fully configured in Asia (or anywhere deep in the supply chain).An emerging strategy – inventory postponement – delays customer-specific product configuration to as late in the supply chain as possible. With the right postponement strategy and infrastructure, you can customize products, packages and retail configurations just before delivery to stores.
- Consumer demand for sustainable practices: Environmentally conscious consumers are demanding greener products and business practices to go with them. These demands underscore the importance of waste reduction and lifecycle management strategies.
- Emergence of new markets and a changing economic balance: As wealth grows in markets like China, India, Korea and other Asia-Pacific countries, there is tremendous opportunity for North American companies. With easing trade barriers, hi-tech companies with robust, far-reaching supply chains can capitalize on new growth opportunities and regional consumption patterns. However, navigating the competitive environment and adapting products to local requirements can be significant challenges. Aligning with the right partners can help.
- Reverse logistics: What happens to products after the point of sale is as critical to the customer experience as the activities that bring them to market. If you’re looking to drive costs out of your supply chain and keep your customers happy, it pays to streamline returns processing with a smart reverse logistics strategy.
How do you keep up with the twists and turns of fickle consumer demand? Could you benefit from a supply chain strategy that gets products from the production line to consumers more efficiently? Is it time to rethink your hi-tech supply chain? Does your company have the bench strength to turn your supply chain into a competitive advantage?
To learn more, download our “Guide for Transforming Your Supply Chain”.
