Electronics OEMs know that emerging markets offer an opportunity for growth. They may not know that success or failure can depend greatly on the organization's supply chain practices.
Only about 40% of companies feel that they have captured the growth they expected in emerging markets, a new Accenture survey found. The problem may be with the how the supply chain is managed. In fact, with certain operational practices in place, organizations can capture as much as 20% more success than the average, the study found.
These leaders' success can largely be attributed to four major supply chain practices: using a broad mix of operational approaches; focusing on quality and market knowledge in addition to operational costs; extensively deploying technology to help increase efficiency, improve flexibility, and enhance decision making; and continuing to invest aggressively in supply chain operations to keep pace with changing market dynamics.
Clearly, there are lessons to be learned from world-class supply chain organizations. The secret is maximizing opportunity while minimizing risk. That may be easier said than done. Check out the infographic below, and then let us know what lessons your organization has learned about tackling emerging markets. Then, take a second and weigh in on our most recent EBN Quick Poll to let us know how well your company rates in this area.
— Hailey Lynne McKeefry, Editor in Chief, EBN 
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While a can't debate the points Accenture makes, suggest the increasing impact of the Internet of Things (IoT) ecosystem will also have notable affects on the electronic supply chain which many people may not yet be considering.
I'd also add the infographic communicates Accenture's points quite nicely. Good for them!
@Ford all of these connected markets , from wearables to IoT, are likely to shake things up. It was an ancient curse “May you live in interesting times.” I don't think these new market will be a curse for the electronics industry but it will probably cause at least a few sleepless nights, mad scrambles and more for electronics OEMs.
@Ford: I think you're right in pointing out to the fact that IoT will cause a lot of disruptions in the supply chain for different industries. Particularly in the electronics industry, we can expect an off-shoot in the demand for electronic components used in networking equipments.
What is the main reason why companies are facing so many supply chain challenges in the emerging markets? Does it have to do with the fact that there's not enough data available for managers to plan accordingly? Or does it have to do with weak systems and infrastructure in the emerging markets?
@TaimoorZ, I think there are a variety of challenges to name a few:
Organizations going in to new markets have to do things in new ways, but too often they take more of a busiess as usual approach.
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“I think you're right in pointing out to the fact that IoT will cause a lot of disruptions in the supply chain for different industries. Particularly in the electronics industry, we can expect an off-shoot in the demand for electronic components used in networking equipments.”
Taimoor, how? I expect a mass growth of supply chain activity to meet the industrial requirement.
This survey is good to know what supply chain leaders are planning to do to grow their business in emerging markets.
Thanks Hailey for putting down the points. All these are real challenges a company face when it enters a new market. Sometimes cultural and social differences are the widest gaps to fill.
That seems to be a lot of challenges. Companies that perform well in emerging markets derive their success from a more ingenious approach than trying to replicate what use to work in the western markets.Â
“The secret is maximizing opportunity while minimizing risk.”
That is right. Minimizing risks also implies understanding the dangers that may occur at any time in the country such political unrest, natural disasters, labour regulations… Â
@Ford,
Smartphone and smart device adoption is soaring in emerging countries. The IoT is expected to be vast in those regions. This surely means a lot of opportunities for the supply chain business in the emerging markets.
“I expect a mass growth of supply chain activity to meet the industrial requirement.”
@Jacob: That's indeed going to be the case. It will trigger an increase in the supply chain activity across all levels – manufacturers of final equipment, manuafacturers of electronic components and even producers of the raw material used in components.
@Hailey: I agree with all the challenges you mentioned here. However, most of these can be mitigated (if not resolved completely) by having a local partner in the country. The local company would have a much better understanding of the market, the competition and the customers. Most foreign companies understimate this and end up making mistakes.
@Taimoor and Jacob, I suspect that it will cause an equally big disruption in the electronics design field. Not enough designers–so OEMs, especially small and mid-sized ones, are going to be looking for design partners to implement their ideas.
The huge audience in emerging markets also provides an opportunity for near-shoring.
@Taimoor, a local partner can help, but the organization still has to identify a partner, and build systems to work with that partner. It's not a slam dunk.
@Hailey: Whom do you think is the best ? A local or a foreign partner for this ? More profitable if it's a foreign partner I guess
@Haileyt: That's good news indeed. That will make way for new business ventures to step into the country. A boost to the economy.Â
“That's indeed going to be the case. It will trigger an increase in the supply chain activity across all levels – manufacturers of final equipment, manuafacturers of electronic components and even producers of the raw material used in components.”
TaimoorZ, true because supply chain is the link between OEM and component manufactures.
“I suspect that it will cause an equally big disruption in the electronics design field. Not enough designers–so OEMs, especially small and mid-sized ones, are going to be looking for design partners to implement their ideas.”
Hailey, using open source designs and outsourcing the design works can address such issue to an extent.
Building pool of local talent goes a long way. Every country has its own challenge and a blanket solution cannot work. Local talent has more ideas and innovative solution to deal with the supply chain problems.
@Nimantha, i don't think there's a one size fits all answer to this. I think some local presence (either as a company or through a partner) is critical. Profitability–well, that's only if it's a good partnership. No easy answers here.
Hailey,
In any new market you penetrate into; if you don't have Market expertise in your company;the chances of Failure are very-very high.
Profitability tends to be a function of how much or how little competition you have to face.
By and Large what I have seen is if you keep your head down and work very hard you usually tend to achieve success anywhere.
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Himanshu,
Absolutely Right!
Without Local Talent in-place in the Organization (at some level) its very-very difficult for any outsider to just rush in and succeed.
Very slim chance of that happening.
Taimoor,
Very true!
Industrialization in Any Countries tends to throw up a lot of Oppurtunities for all concerned(including Growth).
You will see more and more focus on IoT in Emerging Market economies going ahead.
Its a Given.
Just what remains to be seen is how effectively they harness this change to benefit as many citizens as possible there.
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