The average American “holiday season” usually begins somewhere around Halloween and continues at a frantic pace through January 1st. For those of us who work in supply chain management, the holiday season has a completely different meaning.
As the benefits and capabilities of vendor outsourcing continue to grow, it becomes more important to know what to look for before committing to outsourcing. Developing a sound evaluation approach while knowing what questions to ask of potential suppliers helps maximize efficiency, saving time and money down the road.
With the uncertainty the global economy has brought over the last decade, it has been challenging for many companies to balance the fine line of just-in-time (JIT) inventory management, being line down, and being over budget on inventory numbers. We live in a world where next day delivery of virtually anything has become a guarantee, or at least an expectation.
When you’re in the process of designing a new product, the last thing you are thinking about is the how the product is going to be packaged for transit. However, failure to prepare for and understand electronics packaging regarding how both your components and your finished unit are going to ship is a costly oversight.
We sit at the height of the largest e-commerce boom in the last twenty years. The way we approach shipping both personally and professionally is changing. Before the brick and mortar stores can even start playing their Christmas music, e-commerce sites are advertising shipping schedules to “guarantee delivery” for free shipping for various holidays. So what does this have to do with buying electronics? A lot.
Any supply chain consists of the different activities that transform natural resources, raw materials, and components into a finished product to be delivered to an end customer. In the case of the electronics supply chain, it typically involves the procurement of raw materials and equipment, development of product that is either shipped directly to a customer or to another link in the supply chain to be assembled into the larger product.
In 2017 it is very rare to find someone whose job isn’t impacted by the Chinese New Year (CNY). Over the course of the last 15 years, the CNY has changed. It was once a complete 2-3 week blackout shutdown, no contact with anyone. It has since evolved into a 2-3 day no-contact window with a 5-10 day manufacturing shutdown.
If you are shipping products from China, underestimating the importance of understanding supplier logistics can come at great peril. Anyone that's been to mainland China has seen some things that probably made you double take in disbelief. You get off the plane, sitting in the backseat of your suppliers van, most likely jet lagged, and you look out the window to see a bicycle comically overloaded with packages. Once you realize what you're looking at, the first thing you’re probably thinking is I’m really glad my stuff doesn’t get shipped that way. But can you really be sure?
Over the course of the last 10 years, e-commerce has gone from something that very few people did to something that is part of our everyday lives. The rise in e-commerce has made many of our lives easier and more productive. The unseen side effect for most people is the strain that this dramatic increase of the “casual shipper” has caused to the existing Air Freight model. With companies like Amazon and Apple leveraging their supply chain management to get product to the U.S. in as little as 2-day standard shipping, it highlights the importance of your suppliers’ relationships with their freight suppliers. Hopefully this gives you insight of why freight supplier management is critical to growing your business.