Editorial - Jim Mulhern
More Efficiency and Flexibility
Tapping new sources of cost efficiency while increasing flexibility in the supply chain are key ingredients to success in the technology sector. In the world of technology, as prices drop, there is a huge squeeze on margins, so companies are looking to reduce costs in the supply chain. Thus, while revenue maximization is key in the early stage of a product, a highly cost-efficient and flexible supply chain is needed to safeguard margins when product prices are falling.
The dynamics of the technology sector demand continuous cost optimization in the end-to-end supply chain set-up and flexibility in sourcing and manufacturing capacities, distribution modes and channels, as well as services, such as spare parts logistics, postponement or late configuration.
Editorial - Jim Mulhern
More Efficiency and Flexibility
In order to manage the volatility in the market, demand forecasting and capacity planning are critical to maintain a cost efficient supply chain. This can be achieved best in a joint effort where all stakeholders, from manufacturer to retailer, and including logistics providers, are involved.
Direct distribution is one solution that can reduce inventory costs and allow faster time to market by eliminating the need for regional or local warehousing at destination. For example, on the first leg from Asia Pacific into Europe, shipments clear customs as a consolidated shipment. The consolidated shipment is then broken into smaller units without any interim storage and delivered directly to end customers.
Editorial - Jim Mulhern
More Efficiency and Flexibility
In addition, further efficiencies can be gained by integrating technical services into the supply chain. This means, instead of sending defective products back to the manufacturer, a technical services partner can do screening and repair at the warehouse. This reduces the number of touch points and the turnaround time, which helps minimize cost.
Moreover, as products become more complex, the number of returns increases, often simply because people don’t understand how to use them, rather than due to defects. So, the ability to provide screening and testing up front prevents products or parts from being sent back to the manufacturer unnecessarily.
Editorial - Jim Mulhern
More Efficiency and Flexibility
At the same time, many technology companies are looking to manage their supply chains, including aftermarket logistics, from a global perspective. This means consolidating and globalizing the suppliers and strategy.
These companies are finding that, by partnering with DHL, they can tap into these new sources of efficiency and flexibility through our full range of technical services, including repair & return, service parts logistics, and recall solutions.
Jim Mulhern
