It was only back in January when new product innovations were unveiled at the Consumer Electronics Show (CES) in Las Vegas. The combination of easing global trade tensions, low unemployment, and a growing economy would give even pessimistic industry analysts a case for economic optimism heading into 2020. Then came the novel coronavirus (COVID-19).
Strategic planning and forward thinking play a significant role in new product introduction (NPI) success. However, the unprecedented novel coronavirus pandemic was not on the radar for corporations heading into 2020. Contingency plans are now being discussed and global business operations are rapidly slowing.
With such drastic changes, how do innovative companies thrive despite the COVID-19 effects on the global electronics supply chain and consumer demand?
To help answer that question, continue reading for three actions your business can take to successfully navigate today’s landscape and create a lasting competitive advantage.
Secure Buffer Stock
Electronic components can be added to the list of commodities in short supply alongside hand sanitizer and toilet paper.
Backorders emanating from Chinese New Year closure, sheltering mandates issued by government authorities, and a general startled workforce are all factors affecting the supply chain for a variety of electronic components. Therefore, it is an important time to secure buffer stock.
Begin discussions with your contract manufacturer to enact a plan that keeps your inbound logistics intact
Contract manufacturers have warehousing and fulfillment solutions to support organizations looking to mitigate risk by stocking components. It is highly advised to begin these discussions with your CM and enact a plan that keeps the Inbound Logistics segment of the value chain intact.
COVID-19 has significantly impacted the global flow of goods. All freight methods are operating at reduced capacities and increasing transit times are becoming the norm. This has been especially felt in the air shipping space:
Supply chain delays → production schedule push outs → air shipments needed for prompt delivery
Many passenger aircrafts ship a considerable amount of commercial goods. However, these planes are being grounded due to a lack of seat sales, schedule reduction, and government-imposed travel restrictions.
This lower supply of flights is resulting in increased air shipment fees. It also leads to the potential for goods to sit at a port for weeks while they await an aircraft with loading capacity.
All this considered, the monetary and opportunity costs of shipping early and stocking inventory locally could outweigh the alternative option: absorbing exorbitant air shipping costs or being unable to fulfill orders for extended periods of time.
Pivot Quickly and Appropriately
We live in a new reality where a health crisis and a troubled economy will dominate the minds of societal members for the foreseeable future. It’s in these times organizations need to pivot their strategies, update their processes, and realign their goals for the future.
A great way to approach this recalibration is involving stakeholders and business partners critical to the success of ongoing business operations. Such partners include marketing agencies, human resource professionals, and manufacturing partners.
Successful strategic planning will result in powerful messaging to the outside world, an inspired workforce, and improved supply chain operations. All of which will create the foundation of a lasting competitive advantage.