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Going Global: Is Your Supply Chain Ready?

International growth opportunities continue to abound for high-tech companies. Looking at the mobile/smartphone category alone, new research by the Pew Internet and American Life Project shows that more than half of US mobile users own smartphones. At the same time, smartphone usage is also rising in other regions, particularly in Europe.

According to the Pew study, commissioned by comScore, “2012 Mobile Future in Focus,” smartphones now account for over 50 percent of phones in both the United Kingdom and Spain. A June 2012 study from International Data Corporation (IDC) predicts that smartphones will account for 38 percent of all handsets shipped worldwide in 2012.

With international market opportunities come new business opportunities and logistical challenges. Supply chain planning must be a top priority for high-tech companies looking to expand overseas. The payoff: ensuring order fulfillment, continued operations, efficiencies, and, most of all, customer satisfaction.

Setting up an international supply chain involves critical planning on the front end. One of the greatest challenges is establishing reliable, efficient operations in each new market, which includes understanding the market to overcome any logistical difficulties that may occur.

Once companies have an established presence in international markets, there are ongoing supply chain challenges that require continual planning and management, such as developing distribution strategies that enable firms to serve each market and meet customer demands while keeping costs down. Without the right support, shipping goods overseas and across international borders can prove time consuming. By partnering with a global logistics provider, companies can access some of the world's largest transportation and customs brokerage networks. Also, large carriers usually have access to multiple transportation modes with a variety of time-definite delivery options to help customers save both time and money.

In addition to transportation and customs benefits, large third-party logistics (3PL) providers often maintain international distribution centers and warehouses to assist customers in organizing and prioritizing their inventories. This allows for optimal staging of inventory, which can help companies reach international customers faster while lowering overall transportation costs.

Tracking is always a top priority in the high-tech industry because many shipments are high-value, but the rapid pace of the supply chain plays a critical role in the movement of goods. However, complete visibility into the supply chain becomes even more important when it's on a global scale. 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. When dealing with large amounts of inventory that must be turned around quickly and sent to customers around the world, a comprehensive view of inbound and outbound shipping activity allows companies to staff accordingly.

Tracking also helps maintain customer satisfaction, allowing companies to update customers on the progress of their shipments and to identify and correct potential issues before they occur. A 3PL provider may have visibility solutions to assist with tracking, so it's extremely important to partner with a trusted carrier. Also, software vendors offer turnkey or customized solutions to assist customers with their tracking needs.

When it comes to supply chain efficiencies, high-tech companies should consider investing in technologies that will help them streamline the shipping process and avoid customs delays. Accurate and complete documentation is a critical component of international shipping, and missing or inaccurate information can delay or prevent a shipment from arriving at its destination. There are technology solutions on the market that help companies manage complicated customs paperwork electronically, rather than manually completing paper invoices. These technologies save time while reducing paperwork errors, which is the number one reason for customs delays.

Another valuable technology for exporters are Web-based tools that can help companies identify tariff codes, compliance regulations, and estimated costs of conducting trade in a certain region. Often these tools can be integrated into a customer's business application or Website to further extend their usability.

Essentially, expansion into global markets shouldn't cause a company's operations to falter or stop short. With some advanced planning, high-tech companies can grow their international footprint while maintaining their existing customer base and use the benefits of logistics to create a competitive advantage.

10 comments on “Going Global: Is Your Supply Chain Ready?

  1. Greg Riemer
    June 28, 2012

    Alantria you outlined a some key essentials to shippers that have established their presence internationally. I would add managing risk as another key essential for shippers. While risk could be bucketed into some of the areas you've discussed I think it needs its own bucket. Companies must decide how much time, money and effort should be allocated to prevention vs. response.

  2. prabhakar_deosthali
    June 29, 2012

    In my opinion, apart from using the modern technology and tools to expand your horizon across the globe, a global company must understand the cultural nuances in each country or civilization to become successful . Each culture and each civilization has its own measures of what is ethical, what is non-ethical, the human relationship and the social behavior . All these thing carry a definite weight age while doing international business

  3. Eldredge
    June 29, 2012

    Tracking also helps maintain customer satisfaction, allowing companies to update customers on the progress of their shipments and to identify and correct potential issues before they occur.

    I have certainly found this to be true. It is not unusual to make production positioning decsion based on the knowledge that particular components are arriving on a specific day/time.

  4. syedzunair
    June 29, 2012

    Eldredge, I have the same thoughts. Tracking is extremely crucial if you are talking about shipments over sea and in different continents. Companies that track their inventories, identify potential stopages and inform the clients before hand about any delays make sound business relations. If a company can convince the customer about a potential delay before hand it will always help them out in the long run. 

  5. stochastic excursion
    June 29, 2012

    Visibility is key to decision-making, and the more established and reputable carriers have the software tools to allow this.  Especially in intermodal logistics, each segment of the supply chain is a potential trouble spot that is important to monitor. 

  6. ahdand
    June 30, 2012

    A move which is bold enough by Google. I think this will pump up the SCM vendors.

  7. Himanshugupta
    June 30, 2012

    @prabhakar_, i agree with you that setting up business in foreign land is no easy task. Social, cultural and political differences make up most of the challenges.

  8. syedzunair
    June 30, 2012

    Himanshugupta: I would agree with you and prabhakar on this. Establishing a business in a foreign country is not easy and one has to look for a lot of variables that could effect business. 

    However, in terms of supply chain there is one way through which a business might find it easier to supply goods to a different country. And that is to form strategic alliances with 3PL to distribute goods different geographic locations. 

  9. DataCrunch
    July 1, 2012

    Tracking and visibility are key components to better decision-making and greatly assist companies in rapidly adapting to changes and unexpected events in their supply chains.  With that said, 3PLs may provide a quick fix to an expanding global supply chain, but due diligence is needed as many global 3PLs are still operating in what could be considered antiquated operational environments and manual processes.

     

  10. mfbertozzi
    July 3, 2012

    @Alantria: many thanks for the interesting editorial and for highlighting innovations in the sector. By reading your article and posts below, I was wondering from a real perspective how many companies are reading for going global, in principle; believe it or not, I've experienced there are still significant steps to do for convincing some managers in going global; any thoughts about?

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