Exel recommends reevaluation of supply chain operations
New independent research commissioned by Exel in conjunction with its sister company DHL Supply Chain shows that, to meet the demands and maximize the opportunity of doing business in emerging markets, technology companies must significantly reevaluate their current supply chains if they are to avoid risking loss from either their market share or bottom line.
The research, detailed in a new white paper entitled “Path to Growth: Shaping Tech Sector Supply Chains in Emerging Markets” by Lisa Harrington, President of the lharrington group LLC, makes clear that a “regionalized global supply chain” model is emerging as the new paradigm to meet global shifts in demand. Regionalized supply chains, shortened product lifecycles and shifting demographics characterize the challenges and opportunities for the technology sector in emerging markets.
According to the white paper, three significant items are affecting the technology sector’s supply chain operations:
1. The New Regionalized Global Supply Chain. To meet global demand and changing market dynamics, long-distance supply chains are transitioning to regionally based supply chains. The technology sector, already facing short product life-cycles, is an ideal candidate for near-shoring – moving manufacturing closer to the end consumer – according to the report.
2. Compliance and Quality as a Top Priority. In addition to tax laws, safety regulations and standard market compliances, emerging markets are at a higher risk for corruption and other hurdles. The report argues that these concerns place added importance to selecting a trustworthy and reliable logistics partner.
3. Emerging Market Strategies are not One-Size-Fits-All. Every emerging market is at a different stage in its evolution and has different consumer demands, challenges and opportunities. As a result, it is important for technology companies to tailor their operations and logistics strategies to each market.
“The technology sector is inherently unpredictable, but in emerging markets, unknown demand patterns and varying technology adoption rates heighten the risk,” said Luis Eraña, Exel President Technology & Service Logistics Americas. “Understanding the technology sector and its challenges, such as long lead times for products and dynamic consumer demand, helps us provide cost-effective solutions for various scenarios so that our customers are equipped to deal with the unknown and ensures we remain North America’s leading logistics provider.”
