Technology 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 Technology 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

  • Outsourcing to service provider (EMS)
  • Multi-/Dual-Sourcing
  • Regional supply chain set-up
  • Collaborative planning with key suppliers
  • Collaboration with key customers on planning (e.g. effective forecasting)
  • VMI direct replenishment model
  • Decrease manufacturing costs through reduction of wastes
  • Differentiated order to delivery time
  • Inventory reduction
  • Make to order
  • Late stage product customisation
  • Outsourcing
  • Multiplication of sources and sole-sourcing avoidance
  • Visibility over short-term supply through order
  • traceability, vendor-managed inventory and so on
  • Visibility and regular monitoring of main suppliers’ operational indicators
  • Internal carbon footprint optimisation and improvement
  • Localisation of procurement organisation in tax efficient countries (e.g. Singapore, Switzerland, Cayman Islands…)
  • Transfer pricing
  • Import/Export optimisation (e.g. bonded warehouse)