Why high-tech innovators need strong supply chains.
Any technology geek will tell you that the annual Consumer Electronics Show (CES) in Las Vegas is the Mecca for all things high tech.
Last week, the 170,000 attendees at the 47th annual CES took a stroll along the bleeding edge of technological innovation. There they saw levitating audio speakers, wrist watches that broadcast your tennis score, 3D printers and “smart belts” that expand automatically as the wearer consumes a big meal.
“Revenue for the consumer electronics industry is projected to reach an all-time high of $223.2 billion in 2015 ”
Some will thrive; many will not. But growth in the sector is undeniable. Revenue for the consumer electronics industry is projected to reach an all-time high of $223.2 billion in 2015, according to the Consumer Electronics Association (CEA).
Another certainty is that high-tech companies need strong logistics support to bring their electronic gadgets and devices successfully to market. CES underscored this reality for me.
Increasingly, companies prefer to focus strictly on developing their products, choosing to outsource their product launches to logistics experts. But, whether they make their goods in Gujarat, India, or Shenzhen, China, electronics companies require a proven launch strategy to get their products to their customers while avoiding higher transportation costs, lost sales and increased overtime expenses for warehouse and distribution employees.
According to the most recent UPS Change In The (Supply) Chain survey, 53 percent of executives in the high-tech industry cite a flawless initial product launch as critical to the product’s success. But fewer than half of high-tech logistics executives rank their companies as market leaders in product launch.
Launching new products probably sounds like a straightforward task to some people. In the simplest terms, a product launch is simply a matter of introducing a new item for sale and promoting it.
But actually pulling that off is usually a complicated process that requires careful coordination and collaboration between multiple parties. Product launch is a process rife with challenges overlooked by many companies. For example, they may not know how to stage their inventory to enable delivery on a specific day.
Clearly, product launch requires intensive planning in three key stages. In the earliest stage – forward deployment –companies must identify their product’s country of origin, set a manufacturing timeline, choose the destination geographies and establish a sales forecast.
“2015 sales of wearables will total $5.1 billion, a 133 percent increase.”
Finally, in the product-delivery phase, companies must know if their launch should occur on a specific day, how many delivery channels they need and whether the launch requires a customer-visibility or customer-service plan. UPS, for example, allows customers to reroute packages to a second location if they cannot be home for delivery.
Last week’s CES spectacle plainly illustrated that the pace of innovation in the high-tech industry is blinding. Today’s hottest technology may be obsolete tomorrow as thousands of new products compete for the same limited spotlight.
We know, for example, that advances are surging in wearable technology. The CEA projects 2015 sales of wearables will total $5.1 billion, a 133 percent increase. Revenue from sales of smart watches alone will grow by 474 percent to $3.1, the CEA says.
But smart eyewear is advancing, too. And someone has even invented smart shoes that track fitness and give travel directions.
Obviously, the high-tech industry is extremely competitive, and manufacturers are looking for any advantage that sets their products apart. A successful product launch that delivers a positive customer experience may well make the difference between success and failure.