Telecom industry findings: Global Supply Chain Survey 2013

Supply chain performance

Supply chain performance

Supply chain performance:

The leading Technology and Telecom companies achieve the highest EBIT margins (19.8%) with the fewest inventory turns (11.9) and an average delivery performance (95.5%). There’s a bigger gap between the EBIT margins of the Leaders and the Laggards than there is in any other industry, but their inventory turns and delivery performance are relatively similar.

Organisational set-up:

Technology and Telecom companies typically manage their planning, manufacturing, operational procurement and delivery functions regionally, and their enabling and strategic procurement functions globally. They outsource about 15% of their planning, sourcing and enabling activities; as much as 55% of their manufacturing and assembly activities; and 20%-50% of their delivery activities.

The key attributes of Telecom companies

Organisational set-up

Leading practices

Leading practices

Leading practices:

The most important value drivers for Technology and Telecom companies are minimised costs (94%), maximum delivery performance (90%), maximum volume flexibility and responsiveness (83%) and complexity management (71%). The Leaders focus on collaboration with key customers and suppliers and end-to-end transparency. They also continue to place great weight on dual sourcing with key electronics manufacturing services providers and regional supply chain set-ups.

Top differentiating practices

  • Collaborative planning with key suppliers
  • End-to-End supply chain planning and visibility
  • Inventory buffer stock
  • Outsourcing to service provider (EMS)
  • Internal capacity flexibility 80%-120%
  • Regional supply chain set-up
  • Outsourcing to service partners
  • Decrease overhead costs through increase of labour productiveness
  • Inventory reduction
  • Outsourcing
  • Use of distributors and other channel partners
  • Automate processes in order to cope with complexity
  • Multiplication of sources and sole-sourcing avoidance
  • Visibility and regular monitoring of main suppliers’ operational indicators
  • Regular review of suppliers financial risk and mitigation through risks sharing partnership
  • IP and patent royalty optimisation
  • Manufacturing and assembly optimisation (toll manufacturing)
  • Import/Export optimisation (e.g. bonded warehouse)
  • Agreement of supply chain partners to adhere to highest ethical standards