Challenges in the electronics supply chain industry
We are living in an age where the electronics market is governed by how the products are placed, bought and re-ordered. The plethora of features offered by these products are enticing, but they also take a toll on the devices, which leads to their life cycles being unpredictable. This in turn creates uncertainties in the re-ordering cycles, which puts pressure on the supply and distribution networks. Considering the number of uncertainties involved in the entire sequence of demand to supply, how do we pinpoint the challenges in the electronics supply chain? After we’ve identified them, are we prepared to take them head-on?
The electronics industry is highly customer-centric, with electronics companies being engaged in a perpetual battle between demand variability and supply variability. The consumers tend to lean towards a product that entices them with the features they need when they need it. Beyond this point, it is the service and quality that determine brand loyalty. This, coupled with re-ordering ease and lower lead times, make a regular customer. It is these factors that create the unpredictability in demand and the challenges that arise along with it. These factors also influence the consumer demand trends that the companies need to respond to.
Keeping this in mind, the life cycles of the products decide the frequency of new-product introduction in the market. The product life cycle is used to predict when the demand will rise and every aspect of production is mobilized to cut down the delivery time. When the demand rises, the products, dressed in a new avatar, armed with improved features are put out for consumers to purchase. The game ultimately is about developing appealing products and delivering them in the least possible time, with the only question being about volume and distribution tactics.
The issue with such a level of demand projection is the uncertainty in demand variables. This brings us to a few key questions that need to be answered as soon as possible.
- How accurately would the electronic devices meet the projected re-ordering dates?
- Can the company be made aware of the impending demand immediately?
- Would the demand rise in a direction favourable to the company?
- Is the company equipped to respond to the spike in demand?
To take care of these problems, a system needs to be put in place that can empower each key member in the equation to action independent decisions. A layered architecture that isolates each supply/demand activity goes a long way in taking on known challenges.
An investment in an effective enterprise resource planning (ERP) system is required. The ERP, manned by a skilled member of the team, not only fills in the communication gaps but also goes a long way in mapping demand trends for future actions. But this, however, only envelops the patronage of the faithful consumer base. Factoring in the supply for a new customer base is where the real challenge lies.
To tackle this problem, working towards optimizing the system lead time becomes imperative, which means emphasizing on supply chain operations to narrow the time gap. To get this done, several steps can be taken to ensure the involved processes are sped up.
- The system must make way for all the members to have individual access to handle interactions between the consumers and the suppliers
- Members of all the companies involved in the process must be able to modify their own process and access those of others. This requires clear functionalities and simple interfaces.
- The architecture put in place must be easily adaptable to the existing system. Hence the flexibility and scalability of the system play a vital role
- The system must be able to calculate the match between demand data and supply data as soon as the projections come through. This is vital in the stage of planning and execution to meet the incumbent demand.
Ideally, when these implementations work in harmony, one would find the lead time to be cut down significantly. A system relying on an intricately based system as mentioned above can be trusted to generate data that helps the companies make informed decisions and have a significant lead in the market.
ProConnect pioneers in electronics supply chain management from the smallest products like pen drives, mobiles to heavy products like big servers & high-end Indigo printers. We handle household appliances, white goods as we are preferred service partners for big brand names. We do deliver the last mile to the residences and handle these products with a lot of care.
It is indeed fascinating to watch how every element of the electronics supply chain operates in intricate congruence, to keep the consumer happy.
– Mr K S Raghu, General Manager (E-Commerce)