All around the world, consumers are growing in power. The rise of the middle class in emerging markets means that there is now a fast growing population of consumers who are ready to spend money that they have never had the opportunity to do before.
It is hardly surprising that much of this new wave of wealth is being spent on technology products; exciting gadgets such as mobile phones and tablets are in massive demand. However, consumers are becoming ever more demanding about what they require out of their devices as companies add new features and developments to their product offerings. Supply chain professionals have the responsibility to ensure that companies can respond to this dynamic environment and be ready to deliver the next big thing.
When considering supply chain volatility, it is all too easy to think first about destructive natural forces, such as an earthquake or a flood; rather than consumer preference and spending habits. However, we have observed that consumer demand can wreak havoc on supply chains and many businesses are ill-equipped to cope.
Failure to deliver a new technology product to market fast and with the required specifications can be the difference between producing a must-have item and seeing it dismissed as out-dated – with the obvious implications for sales that follow.
In order to keep up with this demand and mitigate the risk of an obsolete product offering, businesses must rethink their priorities. Older supply chain models are brittle and high-risk and not fit to support the flexibility required in today's fast paced world. Speed, efficiency and cost remain important and technology companies need to develop supply chains that are fast, lean and resilient. This means being able to serve markets around the world with a supply chain that is resilient enough to withstand shocks, agile enough to respond quickly to sudden or unexpected change, flexible enough to customise products and efficient enough to protect margins This approach balances efficiency and cost management with contingent capacity, scale and capability.
There are a number of approaches which can help technology companies to improve agility. One major trend that we are observing is a contraction in supply chains, which have grown long and complex as a result of globalisation. Companies are recognising that by optimising their footprint and putting their manufacturing base closer to the consumer, they can drive products more quickly to market and minimise the risks that are inherent in sprawling global supply chains.
Integrating supply chains to give visibility of upstream and downstream providers allows manufacturers to plan more accurately and manage demand more cost-effectively. Getting real-time visibility across the extended supply chain – incorporating suppliers, manufacturing nodes, carriers and third party logistics service companies, and customers – through a control tower approach in which the status all parts of the supply chain is fed into a unified view in real-time, allows potential or real problems to be identified and addressed pro-actively before they disrupt the supply chain.
Managing supply chain risk pro-actively lies at the heart of a new generation of toolsets now being introduced. DHL, for example, recently unveiled Resilience360. This tool allows users to assess critical hot spots in their specific supply chains; visualize them and build a risk profile of their supply chain in order to initiate potential mitigation activities.
Developing a resilient supply chain opens up a wealth of opportunities for businesses to grow, by adapting to keep up with customer demand.
For more information on supply chain resiliency, download DHL's new white paper by Lisa Harrington, President, lharrington group LLC and Associate Director, Supply Chain Management Center, Robert H. Smith School of Business, University of Maryland here.