DRIVING SUPPLY CHAIN TRANSFORMATION IN THE HIGH-TECH SECTOR
High-tech companies are revamping how they manage their supply chains – turning to a lead logistics partner model to cut costs and improve agility.
Uncertainty is a fact of life in every industry. But the high-tech sector lives with a level of volatility that puts constant stress on the supply chain.
Supply Chain Flexibility
Konica Minolta, the global electronics manufacturer, was facing these exact issues in its Japan operations. The company was finding it challenging to manage the complex logistics of it Japanese market with its existing staff resources. “With more than 100 logistics partners in Japan, we did not have enough resources internally to manage them all,” explains Takashi Kurimoto, Director of the Supply Chain Management Center for Konica Minolta, Japan. “We needed a solution provider to manage them and optimize our Japan logistics operations. Our biggest priority was to lower our costs.”
Konica Minolta also wanted to increase its supply chain flexibility and resilience overall. While there were many reasons for this objective, two in particular stood out. The company’s experiences with the earthquake-tsunami disaster in Japan in 2011 showed how difficult it could be for the supply chain to recover after such an event. And constantly changing product designs make managing the supplier base and its supply chain challenging, particularly given the high velocity of a high-tech supply chain.
The LLP arrangement has delivered significant benefits to Konica Minolta. “DHL has hit our targets to reduce logistics costs and expand services,” Kurimoto reports. “DHL Supply Chain has transformed our supply chain operation into a more controlled and efficient one by implementing significant process improvements.” The LLP’s control tower solution also gives the tech company the visibility it needs to quickly respond to potential or actual supply chain disruptions.
Konica Minolta’s LLP arrangement illustrates the versatility of this operational strategy. “The beauty of an LLP solution is that, as a customer, you can make it work for you in terms of the goals you want to achieve,” says Soeren Bauer, Vice President, LLP APMEA, DHL Supply Chain. “If you have a strong cost agenda, for example, then you align the commercial structure to take cost out. Or, if your goal is resilience and flexibility, then your logistics provider designs a network to deliver those attributes.”
“Every LLP arrangement is a journey,” Parry acknowledges. “Knowing what an LLP can bring to the table gives companies the information they need to decide what tradeoffs they want to make and how they want to improve. This gives them the tools to gain the agility they need to deal with the challenges of a constantly changing business.”