Exel, in conjunction with its sister company DHL Supply Chain, released a new white paper that revealed technology companies must take an innovative approach to their product development and apply it to their supply chain management to help prevent loss of market share.
The research, detailed in a new white paper entitled “Lean and Agile: The Resilient Tech Sector Supply Chain” by Lisa Harrington, President of the lharrington group LLC, makes clear that tomorrow’s tech supply chains must be lean, responsive and resilient. Tech companies must develop highly adaptive supply chains that can quickly align across global markets. This agility revolves around staying asset-light, but being able to access fully qualified capacity when needed, typically through partnerships with lead logistics providers (LLPs).
According to the white paper, three significant challenges are affecting this constantly shifting technology industry:
1. Shrinking Lifecycles and Warp Speed. Products’ lifecycles in the tech sector are getting shorter as companies compete to provide the next disruptive innovation, and consumers are hyper-tuned to expect the next new thing. This causes ‘big bangs’ in consumer demand instead of traditional bell-curve adoption patterns, which can be more difficult to plan for and serve.
2. Emerging Markets and the Rise of Consumption. Tech companies are also competing for business in emerging markets – and supply chains are more geographically spread as a result. This creates some risk for tech companies because there is a lack of sales history and less developed infrastructure compared with traditional markets.
3. Supply Chain Visibility Gaps. Stretched supply chains contain unprecedented levels of outsourcing with a myriad of suppliers being involved. Companies are finding they have a lack of information visibility, which can add another layer of complexity to their supply chain.
“Volatility permeates every aspect of the technology sector with shrinking product lifecycles, emerging markets and visibility gaps, which is why we partner with our customers to help assess their vulnerability and drive increased visibility throughout the supply chain,” said Luis Eraña, president, Americas Technology & Service Logistics, Exel.
The white paper goes on to review how best practice companies in the tech sector are adapting in response to the challenges. These approaches include a LLP outsourcing model, shared services solutions and pre-sales support and postponement.
