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.
For more information on the survey findings and to download an executive summary of the survey results, visit pressroom.ups.com.Survey Methodology: IDC Manufacturing Insights conducted this survey with 337 high-tech manufacturers in North America, Europe, Asia Pacific and Latin America. Qualified respondents were senior-level decision makers responsible for supply chain and logistics. Surveys were conducted in July and August 2013. UPS (NYSE:UPS) is a global leader in logistics, offering a broad range of solutions including transporting packages and freight; facilitating international trade, and deploying advanced technology to more efficiently manage the world of business. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. The company can be found on the web at ups.com ® and its corporate blog can be found at blog.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS.