|
Comments
View Comments: newest first | oldest first | threaded
Page 1 of 2   Next >   Last >>
FLYINGSCOT
User Rank
Supply Network Guru
crystal ball
FLYINGSCOT   5/30/2013 6:35:40 AM
NO RATINGS

It is notoriously difficult to forecast such things and so I cannot see how we can avoid the backog issue.  One way to do it is to ensure supply contingencies are in place to respond to demand but this is expensive to implement.

nimantha.d
User Rank
Supply Network Guru
Re: Vertical Integration
nimantha.d   5/30/2013 5:35:01 AM
NO RATINGS

@Taimoor: I think its because its linked to many.       

nimantha.d
User Rank
Supply Network Guru
Re: It is a tight rope walk
nimantha.d   5/29/2013 10:48:52 AM
NO RATINGS

I think its not the new normal, its something which we have created to suit our needs. Backlogs are mostly stuff which you cannot perform by your own. So its something which we create to cover our backlogs.         

TaimoorZ
User Rank
Supply Network Guru
Re: It is a tight rope walk
TaimoorZ   5/29/2013 5:43:36 AM
NO RATINGS

"In today's fast dynamics, only the agile companies will be able to keep the right balance between the back log and overstocking."

@prabhakar: Agility is indeed the key towards avoiding backlogs and surpluses. And the first step towards agility is to move towards JIT where you cut down on the lead times and setup times and produce just according to the demand. Companies like Toyota are way ahead in this and already successful because of this.


TaimoorZ
User Rank
Supply Network Guru
Re: Backlogs have always been the Norm
TaimoorZ   5/29/2013 4:55:27 AM
NO RATINGS

"A backlog to me represents the inability to deliver an item for sale and, therefore, a condition that is driving down profit."

@Tom: I agree. The lost profit is in the form of opportunity cost and is generally not recorded in the books as per the accounting method. Companies are often not able to quantify the true cost of not being able to meet a sale.


prabhakar_deosthali
User Rank
Supply Network Guru
It is a tight rope walk
prabhakar_deosthali   5/29/2013 12:18:20 AM
NO RATINGS

With so many tools available now  for forecasting, one should be able to predict the highs and lows in a demand supply situation and be able to synchronize the production based upon the consumption to keep the lead times at a predicted level without causing non moving inventories.

But in reality this  is a tough balancing act which could be easily jeopardized by change in political scenarios, natural calamities, labor problems and what not.

Compared to what used to happen say 20 years ago, when in-spite of larger lead times the businesses were able to plan their purchases and predict the sale of their products on along term basis as the pace of the whole business was so slow.

In today's fast dynamics, only the agile companies will be able to keep the right balance between the back log and overstocking.

 

Tom Murphy
User Rank
Blogger
Re: Backlogs have always been the Norm
Tom Murphy   5/28/2013 7:08:09 PM
NO RATINGS

Taimoor:  I beg to differ.  A backlog to me represents the inability to deliver an item for sale and, therefore, a condition that is driving down profit.  Sometimes, it represents unexpected demand for product -- a nice problem to have, but also a lost opportunity.

Remember the PT Cruiser?  When it first came out, it was on backorder.  By the time the factories cranked up many, many more of them, the car lost it's initial appeal. It no longer looked like something new and different, and reviewers started admitting it was a pretty mediocre car at that.  Lost opportunity -- and a supply chain headache.

AzmatMalik
User Rank
Production Synthesizer
Re: Backlogs have always been the Norm
AzmatMalik   5/28/2013 6:22:56 PM
NO RATINGS

TaimoorZ: agree. My comment was triggered by what I think is incorrect usage of the term 'backlog'. To me backlog is the existence of an open order for delivery at an 'agreed' date. The meaning that is implied in the original article is as if 'backlog' is a 'problem'. Backlog is a problem only if the lead times are extending or not being met (ie delinquencies to open-order commit dates), as well as being indicative of an ('imminent') correction.

TaimoorZ
User Rank
Supply Network Guru
Vertical Integration
TaimoorZ   5/28/2013 6:18:04 PM
NO RATINGS

One of the reasons why companies integrate vertically is to reduce the gaps in supply and ensure a smooth and constant supply of raw materials and hence prevent any backlogs. It's pretty common in the other industries but I don't think the electronics industry has recently seen a lot of vertical integration. What could be the reason?

TaimoorZ
User Rank
Supply Network Guru
Re: Backlogs have always been the Norm
TaimoorZ   5/28/2013 6:12:31 PM
NO RATINGS

I think the main reason behind backlogs in the electronic supply chain is the volatility in both demand and supply. The volatility in demand is there because of changes in consumer preferences and new inventions while the supply varies because it's linked to natural events such as floods or crop harvest. This dual nature of volatility makes the situation complex in the electronics industry. Other industries normally face variations in only of demand or supply and not both.

Page 1 of 2   Next >   Last >>




Twitter Feed
EBN Online Twitter Feed
EBN Dialogue / LIVE CHAT
EBN Dialogue enables you to participate in live chats with notable leaders and luminaries. Open to the entire EBN community of electronics supply chain experts, these conversations see ideas shared, comments made, and questions asked and answered in real time. Listed below are upcoming and archived chats. Stay tuned and join in!
Archived Dialogues
Live Chat 01/15: CPOs Re-Shape Their Business Roles
Increasingly chief procurement officers (CPOs) are re-shaping their organizational role to focus on creating results far beyond cost controls. A new IBM survey explores how.
Live Chat 11/12: Examining the Cyberthreat to Supply Chains
The number of cyberattacks is on the rise and hackers are targeting the supply chain. Drew Smith, founder and CEO of InfoArmor, will be on hand to discuss the reality of today's threat landscape and what to do about it.