The latest consumer electronics products often rank high on shoppers' wish-lists during the holiday season, making it the busiest time of year for many high-tech and electronic retailers. But the holidays start even earlier for manufacturers.
Manufacturers are charged with supplying the right inventory at the right time for the right customers. The high-tech and electronics industry faces challenges year-round in this area, due to factors such as continual technology innovations and increasing, fluctuating customer demand. During the holiday season, these challenges become more complex, and pressures build as demand for popular products increases.
So, how should high-tech manufacturers ensure that the holidays are a time to celebrate rather than stress? In order to navigate the challenges of an increasingly global supply chain and other logistical issues, high-tech manufacturers need to plan far in advance for the peak holiday season. In fact, companies are well underway with their peak-season preparations by August in order to stay ahead of the game and be ready for the fall and winter rush. Below are some tips for preparing for peak season.
Focus on the big, global picture.
It's hard to tell exactly which products would be most popular with customers during the holidays until the end of the year, so it's possible that high-tech manufacturers will be thrown a curve ball late in the game when it comes to product demand. And with more high-tech companies sourcing from overseas, there are more supply chain factors than ever before to consider when it comes to stocking the right products exactly when consumers want them.
In order to get goods to market at the right times, high-tech companies must ensure they have visibility solutions in place to spot small problems before they become larger issues. The right technology solutions also let companies anticipate issues before they arise -- and make alternate plans when necessary. Companies also need access to multiple modes of reliable transportation and solid back-up plans if goods are delayed in the supply chain for any reason and do not arrive as expected.
Back up your back-up plan. With all of the unpredictable factors at play during peak season, including changes in demand, high-tech companies must have a plan in place to address unexpected challenges as they arise. Manufacturers must plan for uncertainty, and having just one plan isn't enough. Contingency planning, or having multiple, layered back-up plans in place, will allow high-tech companies to deal with last-minute changes successfully and with ease. As another form of back-up, high-tech manufacturers should ensure their supply chains are flexible enough to adapt to fluctuations that often occur during peak season.
Identify and rely on the right logistics partner. High-tech manufacturers don't have to navigate the challenges and uncertainties of peak season alone. A third-party logistics provider (3PL) can help companies identify the smartest strategies for planning and executing peak-season preparations. For example, 3PLs can help companies scale back superfluous inventory as necessary without jeopardizing safety stock through supply chain design, planning, and implementation.
3PLs also can give companies greater visibility into their product lines through advanced tracking solutions, allowing high-tech manufacturers to know exactly where goods are in the supply chain at all times. Finally, some 3PLs provide access to a single source for air, ocean, rail, and road transportation, as well as customs brokerage to get high-demand products to market quickly and on schedule. When searching for the right partner, look for 3PLs with global infrastructure and a vast network of facilities and staff to address local, national, and global needs.
When the right preparations are made in advance, peak season can be a positive time for high-tech companies. Start planning today to reap the benefits later this year and ensure the holidays are merry.
Seasons determine the sale and the consumer response. Consumers always look forward to the special time to purchase products at a reduced price so if the companies start preparing for christmas in July, it is not bad. It is just the principle of 5Ps: Proper Preparation Prevents Poor Performance (for the companies)
DennisQ - Why do you think this year will be particularly difficult. It is always a matter of forecasting within a range. I think this year is no different unless there was some sort of spectacular events. Economy has stinged for the past few years to say the least. Companies will keep doing their forecast just like every year else
Carla, it’s like companies which are making umbrella and winter jackets throughout the year. But sales are happening only in seasons, seasonal sales. Christmas is the peak time for sales and companies had started preparing for that.
I do agree that backup plan, backup of backup plan and logistic partners are right things to do but all this cost money. Do companies have that surplus budget for these arrangement? Is it good to play safe or act agressively? Also year long trend and economic conditions should provide enough indication about the expected sales for a company during the holiday season so does the extra precaution make sense?
Great advice, Carla. I wish I had the foresight to think about the holiday season right now. But it's good advice for businesses that have to move a lot of product. One consumer (me!) won't make a lot of difference at Christmas-time, but the kind of freight businesses have to move is astonishing. It is dfinitely time to plan ahead.
New products are coming out usually while new markets and competitiors are all over the World. Customers know what they want and what they are ready to pay for, and if manufacturer can't meet their needs, that means they are missing out.
It seems like every year companies are preparing for the holiday season earlier than the previous one. It is hard to predict some of the big sellers and ensure that retailers have them in stock. Your few step plan seems like if manufacturers and buyers have all their ducks in a row, they can have an uneventful and profitable holiday season. This also allows for better logistics, since the planning is done months in advance instead of at the last minute.
Thanks for the good advice, and good timing since in this time of the year is when most of the electronic manufacturers are driving cost reductions and they try as hard as they can to secure inventory for the holiday season, sales and marketing representives are using their best channels distributions to get a place on the retail store.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.