Executive Briefings

The Critical Challenges of High-Tech Supply Chains

Perry Santia, senior vice president of Genpact, provides the "big picture" of how high-tech supply chains are coping with the challenges of serving customers today.

The Critical Challenges of High-Tech Supply Chains

As if general supply-chain management weren't complex enough, high-tech companies face additional challenges in managing all of the elements involved in getting product to market, says Santia. The major functions that make up traditional supply chains include sourcing, inventory management, supply-and-demand forecasting and logistics. On top of that, the high-tech market contains a number of sub-verticals, consisting in part of hardware manufacturers and software vendors, all with differing needs and challenges. The software side typically doesn't face manufacturing issues such as cycle time and production cost-control, but still must cope with issues related to returns, warranty management and customer feedback. Providers of internet services, as well as electronic-commerce retailers, have their own unique revenue model, skewed toward brand management and customer loyalty.

Complicating matters for everyone, notes Santia, is the continuing trend toward outsourcing, a practice that has long been common to high-tech manufacturers and service providers, and which shows no sign of abating.

The globalization of supply chains means that companies can't solve problems without ranging across multiple organizational "silos." For example, the failure to receive parts on time from a supplier could be the result of a failure on the financial side, an area for which the supply-chain manager isn't responsible. The solution might come down to something as simple as paying suppliers on time, but it can't be addressed without the cooperation of multiple disciplines within the company.

Disconnections might also exist between regions, especially if one is outperforming another. Santia says companies must strive to unite these disparate elements, through centralization, consolidation and standardization. Only then can a company determine exactly what it's spending, and how it can address the problems that inevitably crop up in a global supply chain.

"Change management," says Santia, "is probably the biggest barrier we see."

To view video in its entirety, click here


Keywords: supply chain, supply chain management, high-tech supply chain, supply management, supply chain planning, supply chain risk management, supply chain management: High-Tech/Electronics

As if general supply-chain management weren't complex enough, high-tech companies face additional challenges in managing all of the elements involved in getting product to market, says Santia. The major functions that make up traditional supply chains include sourcing, inventory management, supply-and-demand forecasting and logistics. On top of that, the high-tech market contains a number of sub-verticals, consisting in part of hardware manufacturers and software vendors, all with differing needs and challenges. The software side typically doesn't face manufacturing issues such as cycle time and production cost-control, but still must cope with issues related to returns, warranty management and customer feedback. Providers of internet services, as well as electronic-commerce retailers, have their own unique revenue model, skewed toward brand management and customer loyalty.

Complicating matters for everyone, notes Santia, is the continuing trend toward outsourcing, a practice that has long been common to high-tech manufacturers and service providers, and which shows no sign of abating.

The globalization of supply chains means that companies can't solve problems without ranging across multiple organizational "silos." For example, the failure to receive parts on time from a supplier could be the result of a failure on the financial side, an area for which the supply-chain manager isn't responsible. The solution might come down to something as simple as paying suppliers on time, but it can't be addressed without the cooperation of multiple disciplines within the company.

Disconnections might also exist between regions, especially if one is outperforming another. Santia says companies must strive to unite these disparate elements, through centralization, consolidation and standardization. Only then can a company determine exactly what it's spending, and how it can address the problems that inevitably crop up in a global supply chain.

"Change management," says Santia, "is probably the biggest barrier we see."

To view video in its entirety, click here


Keywords: supply chain, supply chain management, high-tech supply chain, supply management, supply chain planning, supply chain risk management, supply chain management: High-Tech/Electronics

The Critical Challenges of High-Tech Supply Chains