Supply Chain Challenges in the Consumer Electronic Industry
Today’s supply chain business is more challenging than ever. There are endless things to consider, such as how to reduce costs, increase safety in the warehouse, and deliver products to customers faster, etc. Although the supply chain is a big business for many companies, the rise in the consumer electronic industry has brought a whole new set of challenges that are unique to its processes, functions, and data requirements. Depending on the industry you work in, the challenges you face could vary; however, there are some key challenges for supply chain management in Toronto and Vancouver that you should know about. Here’s how supply chain services can help you face these top challenges in the consumer electronic industry.
Short Product Life Cycles
Short product life cycles create an environment full of risk. There are so many changes that happen over the course of the life cycle, so you will need to carry extra inventory to make sure you have enough products on hand to meet your customer demand. Unfortunately, this means higher carrying costs and a greater risk to your bottom line if the product does not perform the way you expected it to.
To resolve this issue, you need to create several supply chain policies that show the changes in life cycle demand. With these patterns on hand, you’ll be able to compare your plans based on changes in prices and customer segments and/or new markets to find the best results.
There are so many partners involved in a product’s journey from the raw materials to the product being delivered, which means you will need to collect and organize various sets of data. Strong visibility across your supply chain is paramount to ensure that you are not constantly reworking plans and dealing with communication problems between your partners and suppliers and yourself. A lack of visibility can also cause you to miss any discrepancies. You won’t be able to see a problem coming from far away—you’ll have to wait until it hits you.
To anticipate change and risk, you need a single, harmonious end-to-end network. In other words, you need to capture all master and transactional data with one system, capture details from your partners, and operate from that single source of information. This will reduce the time it normally takes you to gather current data and search for any issues that you need to resolve. It will also serve you well to set control limits on international standards, regulated compliances, and customs requirements, etc.
Everyday you must be prepared to deal with any possible problems that come your way. You will need to dedicate yourself to finding the right harmony between costs, revenue, and service. For this to happen, you need to collaborate with your coworkers, and unfortunately, getting on the same page isn’t usually the top priority. It can be a struggle to get everyone on your team in agreement. This inability to balance daily decisions can slow down the decision-making process, and hold you back when you need to respond to changes in supply, demand, or capacity.
Merger and Acquisition Activity
The slower your data integration process, the slower the pay off. Mergers and acquisitions are valuable in company expansion and the consumer electronics industry, but that means you need to consider a variety of enterprise resource planning (ERPs) systems. However, in the supply chain, these systems don’t usually work well together.
The faster you can merge data, planning, and analytics, the faster you will reap the rewards of your investment. You’re planning solution should be able to incorporate data and model the behaviour of multiple ERP systems. Once this data is collected, you can manipulate it, analyze it, and reduce your inventory and cost risks. With a current set of data, your plans will be more accurate and likely to succeed.
Demand and Variety
Consumer tastes and interests are more customized than ever before, and supply chains face the constant urgency to create new products to match the changing preferences of customers. This will lead to more SKUs and shorter product life cycles. Aspects like product development, sourcing, and fulfillment, are more complicated than ever before. Transportation costs are also higher. The better a company can manage their inventory, the better they can meet these demands.
Implementing a quality inventory management software (IMS) will allow you to track the movement of the products in your warehouse. It will provide information so that you can forecast which products you need to restock, and which items have gone dead. With this visibility, you will be able to make better decisions that will save you money and ensure that you are getting the right products to your customers.
Pricing, Logistics, and Other Cost Pressures
The competitive global marketplace has benefited consumers because it has brought in the latest and greatest innovations at lower prices. However, for supply chains, this has led to shrinking margins. Manufacturers in the electronic industry must find ways to deal with this downward pressure on operating margins and find ways to save money without compromising service.
How Lean Supply Solutions Can Help
As you can see, there are many challenges in the electronics industry. However, with the right support you can face these challenges head on and gain a competitive edge. Large businesses may have the manpower and resources to tackle the challenges of their supply chain, but how can small- to medium-sized businesses compete? The answer is simple: Partner with a third-party logistics provider that has all the capabilities necessary to give you that competitive edge.
If you are looking for the right company to partner with, Lean Supply Solutions is the answer. We rise to the challenge of meeting our clients’ needs through our services, which include product fulfillment, warehousing and distribution, e-commerce fulfillment, warehouse pick and pack, order fulfillment, and more. To learn more about outsourcing to our supply management in Toronto, or to ask any questions, contact us today.