Few industries experience as much rapid change as the high-tech sector. Thanks to continual industry innovations and often-short product lifespans, companies are challenged to stay ahead of the game to bring new products to market and predict customer demand.
To help keep a finger on the pulse of the top business and supply chain concerns within the high-tech industry, UPS commissions an annual survey, known as “Change in the Chain,” from IDC Manufacturing Insights. In 2010, the survey focused on companies in North America. This year, to offer a more global perspective, a survey was fielded in the Asia-Pacific (APAC) region.
Among the most important findings to emerge from this year's survey is that rising costs in China are prompting high-tech companies in Asia to explore alternative sourcing locations within the region as well as in North America. As part of this shift, intra-Asia trade will grow, with half of high-tech trade lanes expected to be primarily intra-Asia in the next five years. Some additional findings:
- Nineteen percent of survey respondents plan to source supplies and raw materials from North America in the next 3 to 5 years.
- In terms of current sourcing strategies, 42 percent of survey respondents now source from mature APAC markets including Thailand, Malaysia, Hong Kong, and Singapore.
- While 16 percent of high-tech companies said they currently source from emerging APAC markets such as the Philippines and Vietnam, 24 percent plan to source supplies from these emerging countries in the next 3 to 5 years.
These shifts in sourcing strategies will have an impact on high-tech supply chains in Asia as well as in North America, creating long-term implications for the industry on a global level. To prepare for these changes, high-tech companies should re-examine their sourcing strategies as well as their supply chain as a whole to ensure they are in a position to continue meeting customer demands.
The survey of senior-level decision-makers in Asian high-tech companies also revealed some interesting findings in the areas of customer service, sustainability, and risk management, which we'll explore further in future postings.
In the meantime, to see an executive summary of the survey findings, click here.