High-tech logistics companies all over the world are becoming increasingly interested in ‘near-shoring’ by moving production closer to their home areas as they make strategic shifts to
their supply chain models for greater customer focus, according to a new UPS survey.The 4th annual global UPS survey “Change in the (Supply) Chain”, conducted by IDC ManufacturingInsights, revealed that 27% of high-tech logistics executives are in favour of near-shoring as astrategic move. 77% of the respondents named improving service levels as one of the main reasonsfor near-shoring, by bringing production closer to demand while 55% cited improving control overquality and intellectual property. Since 2010, interest in near-shoring has more than tripled, UPSexplained.
In terms of high-tech product lifecycle management, almost 60% of high-tech logistics executivesconsider themselves as “market leaders” in product innovation, but their confidence in capabilitiesdrops along the entire product lifecycle. Less than half of high-tech logistics executives globallyclaim market leadership when it comes to reverse logistics (34%), product retirement (40%) and evenglobal product launches (46%). For example, 48% of executives surveyed highlighted the increasingimportance of a firm being able to carry out a high-profile global product launch while 26% saidestablishing product security throughout the supply chain of a product launch remains a topconcern.
Other high-tech executives beyond the logistics industry will continue using their existingsupply chain strategies, including 82% in the USA, naming the cost benefits of low-costmanufacturing countries and the location of key suppliers as the top reasons for not consideringnear-shoring.
Many high-tech companies are shifting from product quality as the primary focus to more customerorientation in view of growing global competition, with 39% of those surveyed making their supplychains primarily customer-centric today. This figure is expected to grow to 44% in the next twoyears. These companies re-focusing their efforts on customer-centricity plan to implement severalchanges to improve customer service such as reducing lead times (71%), improving planning (71%),improving fulfillment (68%) and improving post-sales/returns capabilities (66%).
Due to growing demand for high-tech products in emerging markets, nearly two-thirds of high-techexecutives surveyed either already established a presence there or expect to do so within a year,with North American companies being the most active in this regard (80%). Some barriers to globalexpansion remain, however. The top two issues named were the difficulty of understanding the appealof products in a new marketplace (19%) and challenges in executing new in-market strategies(17%).
“Shifting market dynamics such as end-consumer demand, emerging market growth and increasedglobal competition are having significant implications for high-tech supply chains at every stageof the product lifecycle,” Ken Rankin, high-tech marketing director at UPS, said. “It’s criticalfor high-tech companies to align their supply chain strategies to broader business goals and buildcompetencies around each stage of the product lifecycle to achieve greater customer centricitywhile also improving operational efficiencies and driving growth in new markets.”
The survey was conducted with 337 high-tech manufacturers in North America, Europe, Asia Pacificand Latin America in July and August 2013. Qualified respondents were senior-level decision makersresponsible for supply chain and logistics.
