In a recent strategy discussion, I was talking with several colleagues about industries that have the greatest level of supply chain adaptability and advancement. Not surprisingly, we kept bringing up companies using innovative supply chain technology in the consumer electronics industry. 

Not only is this industry robust in terms of product innovation, but it is also leading other industries in terms of implementing and utilizing new technology for its supply chain needs.

But why is this? Is it just the nature of the industry to be adaptable since consumer electronics are known to be always changing? (As we all know, nowadays with consumer electronics, there’s not much time for a product to become outdated before the “next big thing” is already hitting the shelves.)

Here are several reasons why I believe that the consumer electronics industry is at the forefront of supply chain information technology utilization:

Highly complex supply chain for components - The growing number of available suppliers, numerous supply constraints, and a changing supplier base are driving the competitive need to be adaptable, especially on the front-end of product introduction or the unpredictable back-end of the product lifecycle. 

Broad set of demand channels - Brick-and-mortar and direct fulfillment are the two primary channels for distribution in the industry. However, hybrid approaches, which dovetail off of these two channels, are being tested and expanded regularly. A few examples of demand channels constantly being expanded include online advertising, coupons, and linkages as well as gift cards being distributed through various means for retail and customer-direct storefronts.

Loads of information available - Information from suppliers, retailers, industry associations and sales channel partners leads to a massive set of potential information available for forecasting demand and supply needs as well as managing performance. Traditional Collaborative Planning, Forecasting and Replenishment (CPFR) is being supplemented with rich Point of Sale (POS) data and consumer behavior data, which provide a meaningful portfolio with a broad range of possibilities for enhancing the supply chain information flow.

Lean and competitive marketplace being continuously reinvented - Competition for market share and margin in today’s very efficient business world require that the technologies put in place are forward-thinking and cost-effective. Information technology that drives the supply chain for long-term market leaders will allow little margin for error in meeting functionality and performance needs.

Promising outlook for continued growth - Results from a recent study by About.com indicate that 2010 and beyond looks positive for consumer electronics. Among the key findings, at least two-thirds of consumers are planning to spend as much as or more than they did in a somewhat disappointing 2009. In 2010, effectively managing supply and demand through the use of IT will allow companies to stay nimble and build on their position in the marketplace.

Convergence of Product Lifecycle Management, Supplier Relationship Management and Global Trade Management - All of these areas have set the stage for integrating disciplines that are traditionally handled separately. The true leaders in IT for the consumer electronics marketplace are developing solutions that merge capabilities for all of these disciplines in a harmonious way. As the software innovation continues to keep pace with the innovative market, we will see more advanced solutions that will lead the way for other industries.

So, for consumer electronics companies to keep up with others in their highly dynamic, fast-paced industry, it’s almost a necessity for them to keep their supply chain information technology current. 

As always, I look forward to your comments and insight on what you’re experiencing.

- Matt