Tech Companies Advised to Embrace Volatility, Adopt Flexible Supply Chain Management Strategies

The technology sector was hit hard by the recession, and market watchers anxious to see signs of an economic turnaround are waiting to see how it will recover. Now, a report from DHL Supply Chain and the independent think tank FreshMinds offers some insights.

The 47-page report, "Embrace Volatility A route to steer technology supply chains out of the recession," reveals that the biggest threats to market stability in the technology sector are erratic consumer demand, supplier risk, fluctuating foreign exchange rates and increased transportation costs. As a result, the report concludes that technology companies must prepare for "permanent volatility" and create strategies to successfully navigate an unstable business environment.

(Sounds similar to yesterday's post about how retailers are adjusting to the "new normal," doesn't it?)

Conclusions in the report were drawn from the collective insights of 30 industry experts, including supply chain managers and sales and marketing professionals in the technology sector, as well as leading technology and supply chain academics and experts. Ultimately, the report concludes that companies need to adopt an agile, multi-channel approach that includes:

* Flexible supply chain management

* Expanding cross-border operations (a multi-territory footprint can spread risk and smooth demand)

* Horizontal collaboration across supply chains

Diversification like this spreads risk across different channels and also can help companies to better manage inventory and transport cost fluctuations. According to the experts in the report, it's a strategy that will enable tech companies to better weather the recession, while gaining as strong a foothold as possible in what's likely to be an unpredictable and rocky recovery.

From the report:

"The real issue is that no one knows what is going to happen, even once we are out of the crisis and which kind of world is going to wait for us there."
---Alessandro Mariani, Director European Logistics, DeLonghi