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, according to a study by UPS and IDC Manufacturing Insights.
The study, based on UPS’ fourth annual global UPS Change in the (Supply) Chain survey, found interest in near-shoring has more than tripled since 2010. Globally, 27 percent 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 percent said they wanted to improve service levels by bringing production closer to demand and almost 55 percent cited improving control over quality and intellectual property.
Survey respondents also cited the cost benefits of low-cost manufacturing countries and the location of key suppliers as the top reasons for not considering near-shoring.
The study also found that 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.
Nearly 40 percent of those surveyed said their supply chains are built to be primarily customer-centric today and growing to 44 percent in the next two years. The most prominent planned measures to achieve that customer-centricity are reducing lead times (71 percent), improving planning (71 percent), improving fulfillment (68 percent) and improving post-sales/returns capabilities (66 percent).
“Shifting market dynamics such as end consumer demand, emerging market growth and increased global competition are having significant implications for high-tech supply chains at every stage of the product lifecycle,” said Ken Rankin, high-tech marketing director at UPS. “It’s critical for high-tech companies to align their supply chain strategies to broader business goals and build competencies around each stage of the product lifecycle to achieve greater customer centricity while also improving operational efficiencies and driving growth in new markets.”
UPS, IDC find high-tech sector interested in near-shoring
