Don't Let a Business Boom Be a Supply Chain Bust

Retailers, suppliers, and manufacturers scaled back business and production over the past three years to meet the declining demand brought on by the recession. However, since the turn of the year, global manufacturing has been rising steadily -- and, in many places, aggressively. Resources that were superfluous just six months ago are now in high demand, and businesses are struggling to keep up.

The electronics sector has always battled the boom/bust business cycle, but this time it’s on a larger scale. New customer bases are growing around the world, creating logistical challenges for manufacturers on a global scale. At the same time, the rate of product obsolescence continues to rise as the latest models of a wide range of high-tech products come into the marketplace with amazing speed.

From a logistical standpoint, business booms can create almost as many challenges as downturns. It's essential that companies are prepared from a supply chain standpoint to handle increases in demand and meet evolving customer needs. Adding to the challenge, some of the supply chain changes companies made during the downturn are affecting their ability to meet customer needs today. Whether companies scaled down facility size, made inventory planning decisions that affected supply, or made changes to sourcing strategies and transportation modes, all of these factors play a role in their ability to execute in the future.

With the logistical challenges faced by post-recession suppliers, manufacturers, and retailers, the next few months may be a struggle as they prepare to ramp up for increased demand. Below are some areas companies can focus on to streamline their operations and prepare for what’s ahead.

Supply chain check-up: As business demand changes, so do supply chain needs. Companies should perform a post-recession supply chain check-up to ensure that their supply chain is set up to meet the evolving needs of their customers. This includes every aspect of the supply chain, from sourcing manufacturing and distribution locations to managing inventory and transportation, and everything in between. Third-party logistics providers can assist with a supply chain analysis and help manufacturers turn resulting data into useful information for their businesses.

Facility factors: Through facility redesign alone, UPS has seen customers' facility capacity increase by up to 70 percent. Whether your company downsized to a smaller facility or kept facility size the same during the downturn, now is the time to reassess your use of distribution space. Optimizing facility space helps companies prepare for changes in demand.

There is also an opportunity to take advantage of third-party facilities in areas where companies need distribution locations but don't want to invest in their own assets. These facilities often are multi-client facilities, meaning that companies can take advantage of only the space they need at any given time and ramp up and down according to demand.

Technology tune-up: The future of business lies in speed and sustainability, as does the future of your supply chain. There are two key aspects of technology that companies should focus on today. One is automation of processes for functions such as order processing and invoicing. Manual paperwork is time consuming, error prone, and environmentally unsustainable, and it’s quickly being replaced by greener options.

Unnecessary technical errors are one of the top reasons for customer delays, a key consideration for global companies. The other key aspect of technology is supply chain visibility. Having an up-to-the-minute inside view of your product at each stage of its supply chain journey helps keep inventory moving and speeds processes. Tracking also helps maintain customer satisfaction, allowing you to update your customers on the progress of their shipments and to identify and correct potential issues before they occur.

Expanded horizons: Electronics companies have to think further than ever before for supply chain decisions. When it comes to global trade, companies do not have to do it all on their own. From global assets planning to customs brokerage and compliance initiatives, third parties can play a valuable role in global supply chain design and execution. Meanwhile, you can focus on growing and maintaining your business -- and getting ready for more boom times ahead.