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Startups & Their Supply Chain Fit

If you live in Silicon Valley, startup companies are so widespread, they're just thought of as part of everyday life. For those of us living elsewhere, the startup economy and its importance may not be as in-our-face and could be less influential in our day-to-day supply chain relationship-building circles.

But, regardless of location, the high-tech startup scene is, undoubtedly, worth watching from a supply chain planning perspective since its promise or failure could boost or hurt your own business or logistics operations. How do startups fit in high-tech supply chain? Eyefortransport (eft) poses a good question deserving consideration, especially when you look at the supply chain and logistics business intelligence firm's latest infographic on the subject:

  • 40% of high-tech companies are under five years old
  • More than $20 billion in startup investments have been routed to the high-tech sector alone
  • More than half of the high-tech supply chain industry already works with startups in some capacity.

For even more confirmation that startups warrant at least a bit of supply chain planning attention, take a look at some of the 7,440 technology-related projects listed and crowd-funded on sites like Kickstarter. Sure, not all of them will be successful, but some of them will. When those few successful startups reach the masses, electronics suppliers could be competing preferred supplier status for some new gizmo, like this new media player that won £207,890 in pledges, or this smart LED candle that garnered $187,994 long before the fundraising effort was finished.

In short, the point is, new hardware and software companies are constantly coming out of the woodwork, and with the help of mobile and Internet connectivity they are immediately global organization and come with a sizeable worldwide consumer base that will need logistics and delivery services. As eft points out in the infographic, figuring out at what stage startups will integrate into the supply chain can be a key pain point.

Startups companies typically move through the discovery, validation, efficiency, scale, sustain, and conservation stages, notes the firm. From a high-tech and supply chain integration standpoint, the last three stages are usually where startups, which have focused primarily on product design, engineering, and software/app support, will need more manufacturing, supply chain, and logistics support.

Although eft points out that there could be many mutual opportunities for startups and their supply chain partners as their companies grow, there are also challenges to deal with. Among them are understanding the appropriate supply chain needs, figuring out how startup companies scale up or down at different points in time, having the right systems in place to meet changing needs, and of course providing good supply chain visibility when no previous track record exists.

If you're a startup, how have you dealt with the supply chain side once your product was ready for market? If you're on the logistics and supply chain side, what advice can you give to startup tech companies who are new to this?

1 comment on “Startups & Their Supply Chain Fit

  1. Susan Fourtané
    November 7, 2014

    The startup world has grown enourmously in the few last years. They don't mind working 24/7 to get their product, or service out on the market as soon as possible. For this, the contact with logistics and suppliers is early and agile. Supply chains shouldn't miss the startup train.

    -Susan

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