High-tech companies are making strategic shifts to their supply chain models to enable greater customer-centricity, meet changing consumer demand patterns and capture new growth opportunities. Findings come from the 4 th annual global UPS Change in the (Supply) Chain survey, conducted by IDC Manufacturing Insights.
Interest in near-shoring has more than tripled since 2010. Globally, 27% of high-tech logistics executives are embracing near-shoring as one strategy to improve their customer service. When asked globally about the top drivers for near-shoring, 77% said they wanted to improve service levels by bringing production closer to demand and almost 55% cited improving control over quality and intellectual property.
Other high-tech executives, including 82% in the U.S., will continue to use their existing supply chain strategies. Survey respondents cited the cost benefits of low-cost manufacturing countries and the location of key suppliers as the top reasons for not considering near-shoring.
Survey findings also show that 41% of high-tech executives expect to see exports grow faster over the next two years compared to 2013. Another 39% expect to see exports to grow at the same level over the next two years.Emerging market growth Growth for high-tech products is significant in emerging markets, with nearly two-thirds of high-tech executives having either already established a presence in emerging markets or expecting to do so within a year. North American companies are the most aggressive when it comes to emerging market expansion, with 80% either in emerging markets today or planning to be there within a year. However, some barriers to global expansion remain, with the top two cited as: difficulty understanding the appeal of products in a new marketplace (19%) and challenges executing new in-market strategies (17%). Customer-centricity To differentiate their products in the face of growing global competition, many high-tech companies are shifting from product quality as the primary focus to making their supply chains more customer-centric. For example:
- 39% of those surveyed said their supply chains are built to be primarily customer-centric today and will grow to 44% in the next two years.
- For those high-tech companies re-focusing their efforts on customer-centricity, several changes are planned to improve customer service, including: reducing lead times (71%), improving planning (71%), improving fulfillment (68%) and improving post-sales/returns capabilities (66%).
- 48% of executives surveyed cited that a firm’s ability to carry out a high-profile, global product launch is becoming increasingly important.
- 26% of high tech companies said establishing product security throughout the supply chain of a product launch remains a top concern.