16 Supply Chain Visibility
A PIECE OF THE ACTION: CASHING IN
ON SUPPLY CHAIN VISIBILITY
A dilemma has emerged in manufacturing supply chains that is impacting manufacturers’
abilities to seize market opportunities and meet increasingly complex customer needs. Across
numerous industries, product lifecycles are shrinking, as customers maintain their rapid
pace of changing expectations and increasing expectations. This shortens the windows of
opportunity for product success. Meanwhile, global supply chains are now the norm, not the
exception, and manufacturers have outsourced much if not all of the physical manufacturing to
low-cost regions. This has greatly expanded the physical distance between the source of supply
(primarily China and Southeast Asia) and the source of demand (primarily the United States and
Western Europe). The physical distance introduces delays and has significantly reduced supply
chain responsiveness and visibility, which limits companies’ ability to quickly and efficiently
respond to changes in supply and demand. This article reviews this dilemma and demonstrates
how one of the top electronics manufacturers in the world is enhancing supply chain visibility
for the company’s most strategic and profitable business line.
Global Supply Chain Dilemma local mobile phone retailer. This puts a premium on time-to-market
The combination of rapid product capabilities as a critical factor in who wins
Product lifecycles today are shorter innovation and shrinking product lifecycles and who loses. In fact, AMR Research’s
than ever and continuing to shrink, puts enormous pressure on product Chief Research Officer, Bruce Richardson,
with customers requiring new levels development cycles, which are likewise segments markets into just two kinds of
of innovation in product performance, shrinking in an effort to keep pace with companies — “the quick and the dead.”
service and delivery. Take, for example, the market. Staying with the mobile phone Companies either move quickly and
the mobile phone industry, which has example, product development lifecycles efficiently … or don’t move at all.
seen product lifecycles declining for years in that industry have been halved, going
as advancing technology and customer from 12–18 down to 6–9 months, just in Meanwhile, manufacturing’s highly
expectations have demanded new product the last 4 years. And it’s not just the mobile competitive environment has fuelled a
innovation at an unprecedented rate. phone sector; the automotive industry worldwide search for the lowest cost
Think about how many new features have is experiencing a similar scenario with regions to source and manufacture. This
been added to phones in recent years product development lifecycles going from has resulted in massive reshaping of the
— digital cameras, MP3 players, e-mail, 20–30 months down to 10–15 months. manufacturing landscape as the majority
texting and more. In addition, the average of manufacturing has now moved to
lifespan of a mobile phone today is only Shorter product lifecycles translate emerging economies, primarily to China
9 months, which means if the handset in to smaller windows of opportunity to and Southeast Asia. However, these
your pocket is more than 9 months old, seize market opportunities and sustain regions happen to be located across
it is probably no longer available at your profitable competitive differentiation. the globe from the primary sources of
Supply Chain Europe June 2007
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