@Scott UPS customizes the solution based on the customer's need. We have a full suite of solutions, including the world's largest footprint of field stocking locations - providing our customers with same day and next day capabilieis. We're the world's largest customs broker and have technology/IT visibility solutions to assist our customers. Our international portfolio reaches 220 countries.
@Scott High-tech companies are looking for best ways to enter these emerging markets, and our survey indicated 42% are looking for turn-key solution. UPS has the network & regulatory expertise to help our customers make their entry easier in these markets.
@EBNers, thanks so much for coming by and asking great questions... there's a lot to talk about--we'lll be diving deeper into thse topics in the near future. UPS folks blog for us regularly too so keep an eye out for thier contributions!
@Ken: I can see where they'd play a huge role in customer service in terms of mobile intrfaces for customers to use. What about internally in the enterprise, terms of field force managment: managing drivers/routes, maximizing delivery, or in the warehouse/distribution centers?
@Hailey 41% of the respondents expect high tech exports to grow faster over the next 2 years compared to 2013. We like the bullish outlook for exports....clearly the economy is slowly recovering and high tech companies have their eyes on the emerging markets prize.
@all, quick commercial break: Look to the mid right and take a second to click on our most recent flash poll. It's right on topic for today: Does executive management in your organization understand the need for alignment between business and supply chain strategy?
Two-thirds of high-tech companies surveyed are in emerging markets or establishing a
@sunyc Mobile devices are certainly an enabler to the customer service equation. Our survey found that high tech companies are looking to differntiate themselves through customer service. 69% believe that better customer service performance drives improved sales.
@Hailey: There are also seems to be some shared experience there with Latin and South Amercia. You have Brazil as the main example, and a lot more here and there. You have a huge educated class with a desire to play on the world stage.
@JimC In the press. we've seen high profile companies make announcements around nearshoring. One of the objectives of our Change in the Chain study was to quantify the number of high tech companies that are planning to nearshore. Seeing the figure grow from 10% in 2010 to 27% in 2013 gives us a broader barometer of what's happening in the high tech industry.
Wow...this time has really flown! I have to run off soon, but want to thank Hailey for pulling this together and, especially, Ken and Simon for their clear, direct answers and facts. It's really great to have a couple of experts to put this issue into perspective. Go big brown!
The one place that I have seen gathering a lot of interest, especially in the United States, is South Amercia. The time zones line up better and there is a huge knowledge base there. Does anyone know of an concrete expamples?
Ken: I can't speak for anyone but myself, but centering manufacturing in Asia has never really made much sense for anyone but the largest players, and even they have gotten burned by it at times. For SMBs, the cost savings in labor (as Jim pointed out) is relatively small compared to the headaches that can go with it. And, as you pointed out, the growing markets globally suggest near-shoring will be the next critical strategy for agile manufacturing.
@Ken, product security is getting really critical. Not only are the supply chain systems getting more open but also products are getting more internet connected. Check out our latest velociyt emag on the topic of security and the supply chain: http://dc.ubm-us.com/i/207639
Today's guacamole comes from a fellow who grows 20 acres in Escondido along with about 100 plants of tobacco (Cuban seed!). He tells me his trees each need 30 gallons of water a day, but produce up to 300 pounds of fruit.
In my mind, this makes bringing avocados to market about as risky as bringing a phone to market. Critical timing, exacting planning, delicate handling, fickle consumers, and conditions that may be out of your control -- like the price of water and predicting supply from competitors. Don't even mention off-shoring....a nightmare for California farmers.
See...guacamole does make sense in tech chats.
One of China's selling points has been metal-bending for cabinets. It's cheaper in China, but the cost of shipping finished metal is eating up the difference in cost. US makers are capable of on-demand production using laser cutters, plasma torche robots and computerized bending machines.
It is a call now as to where computer cabinets should be made, and with the cabinets goes most of the assembky work.
Hailey: No question -- big launches are planned for months, often starting while a product is still in the development phase. If there's a snag in the supply chain, the whole effort can turn into a disaster. And, yes, Apple is the epitomy of a company that normally does it well. Smaller companies must feel outclassed when competing on that level.
@tech4people Yes, we're seeing demand for repair and recycling. In fact, we have solutions to address the needs of our customers. Earlier this year, we announced a collaboration with Jabil to expand our suite of product repair offerings.
Recycling in China is getting old for both the US and China. Dumping trash on poorer countries isn't exactly ,oral. We need to get our act together. Realising that we have some vast open spaces in the US should readjust our perspectives. A trash-handling facility in Boondocks USA might well be acceptable. It is inevitable, though greedy companies might hold it off a decade or so!!
I did a major experiment with short cycles at NCR a few years back. We got down to 12 days on hand for total inventory. We found that we could remove the need for spares inventory in the early years of product life by sparing from the line. Savings were large and spares were current.
Onshoring or near-shoring helps this along, dcompared with the traditional "Made in China" method
Ken: So about half the sampling thought launches were important and about half said they weren't market leaders in launches. I"m guessing the ones who think they are good at it are the same ones who are the market leaders in it. Is that right? Did you look at that?
@Jim-The Indian Government has already slapped all kinds of Tariff Barriers in place to reduce Finished Electronic Imports into India.You have to basically assemble them there to save on Taxes.As India is an extremely Cost Conscious Market;that 10%-15% in Savings makes a BIG-BIG Difference.
Ken, your figure on innovation doesn't surprise me. In fact, I'm surprised that only 3 in 5 consider themselves strong innovators because, if you're going to be in tech, I think rule no. 1 is to Innovate.
But I am surprised that there isn't more focus on time to market. Clearly, lifecycles are shrinking and timing a product from development to sales is really getting to be the name of the game -- but I'm probably preaching to the preacher on that, aren't I?
In terms of the findings around the high-tech product lifecycle, the study foudn that most companies do not see themselves as market leaders in the tail-end of the product lifecycle. I found that surprising. What pointers do you have for for organizations that want to enhance their capabilities at every step of the product lifecycle?
@Tom The top driver behind nearshoring was the desire to improve service levels by bringing production to demand. This interest in reducing lead times was also a factor among high tech companies that were refocusing their supply chains toward customer centricty (71%).
Jim: I think Apple is making some of its high-end machines here (or planning to) to appease its customers who were outraged paying top dollar for phones assembled for pennies in Chinese sweatshops. It doesn't quite fit with the image of Apples as tools for the elite.
Bringing Tom's question to the top again: Ken, Simon: Reality check. How much electronic manufacturing is going to come back to the US from China? Can you each, please give me your best guestimate as a percentage? (My guess is we're talking about a very, very small number. Am I right?)
@Jim, the guy I was talking to was saying that the move to Mexico was more related to the closing of thousands of factories in China--no more goverment support. They are looking for cost. I didn't hear much from him about quality one way or the ohter (Should have asked!)
Another factor that seems to be influencing the supply chain is the lifecycle of a product itself, which in consumer electronics is somewhere between 12 and 18 months now -- and it's continuing to shrink. That isn't much to get a product from conception/design to the store shelves of BestBuy two months before Christmas. Has that driven some of the near-shoring decisions?
Companies like Synnex Sanmina and Flextronics have been for years acting as finally configuration on-shore for volume produced boxes made in China for the Dells and HPs of the world. The question is are they ready to move down the assembly tree to do more integration?
Ken, Simon: Reality check. How much electronic manufacturing is going to come back to the US from China? Can you each, please give me your best guestimate as a percentage? (My guess is we're talking about a very, very small number. Am I right?)
@Sellis, i also suspect it will never be all or nothing proposition. Organizations are going to do some stuff in one place and some in another. I wonder if some organizatoins won't build things in various parts of the world then bring the assembly domestic.
@Hailey Clearly moving from 10% to 27% in 2013 gives us a pretty good sense that near-shoring is gaining momentum. I would not be surprised to see this slow-gradual shift continue over the next several years. Clearly high-tech comapnies are re-eavaluating their suply chains......it's simply no longer a "set it & you can forget it" exercise
@all, i was at a counterfeit components symposium and was sitting next to a guy at lunch whose speciality was helping OEMs move to mexico. According to him near shoring has a lot of advantages and the topic is only going to get hotter.
This was the 4th year of the survey conducted by IDC Manufacturing Insights. This year's study was global covering nearly 350 interviews with high-tech supply chain executives. The study emcompassed 4 key areas incliding: near-shoring, customer-centric supply chain focus, high-tech product lifecycle and emerging markets.
For a little light reading on what we're talking about today, take a glance at these resources on the study:
The study results are live. Here are some links to more info on the Change in the (Supply) Chain study from UPS:
Simon Ellis currently leads the supply chain strategies practice area at IDC Manufacturing Insights. Within the supply chain practice, Mr. Ellis specializes in advising clients on LCS (Low Cost Sourcing), Lean, Six Sigma and more. Mr. Ellis also contributes his supply chain expertise to IDC Retail Insights research. With over 20 years of experience in the industry, Mr. Ellis most recently was the Supply Chain Strategy Director/Futurist for Unilever North America, a $12 billion division of Unilever, the maker of such well-known products as Dove, Suave, Wisk, All, Q-tips, and Vaseline. Mr. Ellis was responsible for leading the implementation of key new technologies that impacted the future of the Unilever Supply Chain. Specifically, he led the North American RFID and e-Catalog teams, and was the project leader for the new Data Management Organization.
Also let me intorduce our guests:
Ken Rankin, director of high-tech segment marketing at UPS. In his job he is resonsible for:
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EBN Dialogue / LIVE CHAT
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