The Logistics of Electronic Products

Over the past few years, there has been an explosion in consumer demands, and manufacturers need to take a close look at their sourcing, distribution and inventory management strategies to stay ahead of competition. Here are some of the challenges faced by the electronics supply chain that need to be addressed effectively:

Sourcing from multiple places

Sourcing from many different suppliers from faraway places adds cost and complexity to the consumer electronics supply chain. Challenges with multiple suppliers show up in terms of quality control and efficacy. Lower order volumes leave little room for bargaining and contract negotiation is costly as well.

Sourcing from new and emerging markets

In an attempt to cut costs, several electronic companies have been reaching out for electronic logistics partners in emerging markets. The downside of this is that it makes the supply chain longer and more tedious. These markets are also often ill-equipped with and have insufficient infrastructure adding to supply chain complexities. Third-party logistics providers that have a firm hold in these markets can be of considerable help to businesses.

Customized products

Many companies adopt the made-to-order production strategy that customizes the products to the exact specifications of the customer. While this is a great way to attract customers, it is not always as cost effective as a made to stock model. Short product life cycles can also lead to inventories becoming obsolete.

High operating costs

One of the biggest logistical challenges for shippers is to reduce operating costs. Quick and costly air freight is the biggest contributor to this and the solution may lie in looking for cheaper alternatives. This is a tricky area because it requires planning beforehand which may not always be possible. Most customers want the delivery in no time which leads to electronics shippers opting for air freight.

Big carbon footprint

According to a United Nations report, global e-waste volumes grew by 21% between 2014 and 2019, with the US generating 6.92 million tons of e-waste, about 46 pounds per person. Only 15% of the material was recycled. If waste is generated at the same pace, e-waste will be doubled in just over ten years.

Packaging challenges

Electronic products are more prone to temperature and humidity changes, when compared with other product categories, and so they need to be packed accordingly. The size, weight and fragility of these products also presents transportation challenges.

Counterfeits

Consumer electronic firms need to be doubly sure of their suppliers and examine their goods carefully to ensure there are no counterfeit components in their goods. Serial number seals, and other e-pedigree techniques are viable solutions for this.