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April 2015, Conducted by:

A Survey of Electronics Manufacturers

2015 Supply Chain Trends

Methodology and Participants

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Goals and Methodology

Research Goal The goal of this survey was to capture hard data on current experiences, challenges and trends with the

supply chains of electronics manufacturing companies.

Methodology An online survey was sent to independent databases of professionals working at companies that manufacture

electronics goods. Questions were asked on a variety of supply chain topics, including visibility, factory-of-the-future

technology, Internet of Things and more.

Participants A total of 315 individuals completed the survey. All had responsibility for their company’s supply chain. Participants

included a mix of roles and company sizes.

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Companies Represented: Industry & Size

Company SizeTypes of Goods Manufactured

Less than 100

19%

100 - 1,00039%

1,000 - 5,00021%

More than 5,00021%

Robotics

Networking and telecommunications

Mobility

Home entertainment

Point of sale (retail)

Consumer lifestyle and wearables

Defense and aerospace

Other electronic goods

Printing, scanning, or card readers

Healthcare

Semiconductors

Computing and storage

Automotive

Industrial and energy

0% 5% 10% 15% 20% 25% 30%

4%

5%

6%

8%

8%

10%

10%

10%

12%

12%

14%

16%

21%

27%

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Companies Represented: Location & Complexity

# of Supply Chain Countries Complexity of Supply Chain

Just one11%

2-534%

5-1024%

More than 10

31%

Simple12%

Moderate37%

Complex33%

Very complex

18%

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Companies Represented: Respondents’ Roles

Other

Logistics

Distribution

Product Marketing

Inventory Management

Purchasing or procurement

Business executive

Research, development, or design

Supply chain management

Product Management

Operations Management

0% 5% 10% 15% 20% 25%

10%

2%

6%

6%

6%

7%

7%

11%

11%

12%

22%

Supply Chain Visibility

Detailed Findings

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We do not face challenges with the visibility of the supply chain

Other

Lack of information about pipeline results in idle labor or line capacity

Dependencies are not well documented so it is difficult to evaluate the impact of problems

Underlying inventory drivers are not well understood

Information about inventory levels is updated slowly

Difficult to track and report on service levels from our vendors

Must maintain excess inventory to mitigate risk within the supply chain

0% 10% 20% 30% 40% 50% 60% 70%

11%

3%

29%

32%

36%

39%

58%

61%

89% face challenges with lack of visibility into the status of their supply chain

Do you face any challenges with visibility into the status of your end-to-end supply chain? 

Most frequent “Other” visibility into risk and mitigation, and lack of management support

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Lack of visibility does not introduce supply chain risk

Lack of flexibility in transportation methodologies

Lack of risk assessment during design stage

Cannot effectively track supplier financials and business stability over time

Difficult to document trade compliance

Sole sourcing introduces vendor risk

Security

Hard to manage part quality

Hard to change locations if business environment shifts

Difficult to manage capacity

Need to allow for extra shipment time

Lead times longer than desired

0% 10% 20% 30% 40% 50% 60% 70%

4%

11%

13%

17%

19%

21%

22%

25%

42%

47%

53%

58%

96% report lack of visibility introduces risk to their supply chain

Does lack of visibility introduce risk in any of the following areas of your supply chain?

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

10% 42% 18% 11% 16% 3%

None of it

Less than a quarter

Less than half

More than half

More than three quarters

All of it

70%have real-time status updates for less than half of their supply chain

Approximately how much of your supply chain can be tracked with real-time status updates?

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82% would take days to understand the impact of an extreme global weather event

In the case of an extreme global weather event (i.e. tsunami or hurricane) about how long would it take you to fully understand the impact on your supply chain?

Immediately A few hours A few days A few weeks0%

10%

20%

30%

40%

50%

60%

4%

14%

55%

27%

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These would not be valuable to us

Excess inventory or inventory shortage reports

Risk assessment reporting

Real-time alerts on problems

Dashboard with end-to-end visibility into supply chain status

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

8%

46%

47%

59%

77%

92% would find value in increased visibility and management capabilities

Which of the following capabilities for increasing visibility and management of your supply chain would be valuable to your organization? 

Supply Chain End-to-End Solutions

Detailed Findings

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Half have abandoned an idea because of price or procurement complexity

Has your company ever abandoned a product idea because of the price or complexity of procuring components?

Yes51%

No49%

15

There would be no benefit

Independent, timely review of suppliers and components

Streamlined negotiation and contracts process

Diminished component costs through volume purchasing

Expertise in materials marketplace

Better integration of procurement and inventory management

0% 10% 20% 30% 40% 50% 60% 70% 80%

7%

42%

49%

55%

58%

67%

93% see potential benefit in supply chain vendors helping procure components

What benefits could your company gain if your supply chain partners and vendors helped you with component procurement?

16

Working with a single partner across product lifecycle seen as very valuable

How valuable would it be to work with a manufacturing partner that provides solutions across the entire product lifecycle from idea to distribution?

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

53% 40% 7% Very valuable

Somewhat valuable

Not valuable

Factory of the Future

Detailed Findings

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We have no obstacles with our manufacturing processes

No flexibility to integrate new product components (i.e. adhesives, photonics, precision mechanics)

Does not cope well with complex product designs

Cost of labor is driving up costs

Manual processes are too slow or too error prone

Very expensive to make changes once in production

Difficult to change existing processes

0% 10% 20% 30% 40% 50% 60% 70%

8%

26%

29%

35%

45%

54%

58%

Existing manufacturing processes lack flexibility

What obstacles do you face with your existing manufacturing processes?

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Insufficient manufacturing processes limit product portfolios

Has your company ever passed on a product idea because existing manufacturing processes were insufficient?

Yes57%

No43%

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Manufacturers see value in “factory of the future” technologies

How valuable to your business would it be to have access to these “factory of the future” technologies?

3D printing

Virtual reality design and prototyping

Robotics

Rapid prototyping

Modular assembly

Increased manufacturing automation

Predictive supply chain analytics

Advanced materials technology

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

36%

37%

38%

46%

48%

52%

53%

54%

30%

48%

38%

43%

38%

39%

39%

36%

33%

15%

23%

12%

14%

10%

8%

10%

Very valuable

Somewhat valuable

Not valuable

21

Faster, cheaper delivery would increase pace of product launch

If your company’s manufacturing processes supported FASTER

delivery, would you launch new or upgraded products more frequently?

If your company’s manufacturing processes supported more COST EFFECTIVE delivery, would you

launch new or upgraded products more frequently?

Yes78%

No22%

Yes80%

No20%

Internet of Things

Detailed Findings

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Electronics manufacturers moving forward aggressively with development of “Things”

What is the status of your company’s products for the Internet of Things?

We have “Things” in production

30%

We are in de-velopment with

“Things”23%

We are planning to develop

“Things” but have not yet started

22%

We have no plans for “Things”

25%

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77% lack skills needed to fully deliver IoT solutions

Do you have expertise in-house today to help you fully deliver IoT solutions including hardware, software, connectivity, analytics, security, back end infrastructure, etc.?

All areas23%

Most areas, but not all39%

Lacking key areas38%

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IoT forcing manufacturing companies to acquire new skills

Development of “Things” can require an organization to develop new skills.  Which of the following additional skills will you need to acquire or have you acquired in order to deliver

“Things” solutions?

We have not changed our skill set and have no plans to

Big Data

Inter-device communications

Sensors

Cloud technologies for connecting and storing information

Device software

User experience and usability

Analytics

Security

0% 10% 20% 30% 40% 50% 60%

3%

33%

37%

40%

40%

44%

46%

47%

50%

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“Things” data could have significant impact

What potential value do you see in using data connected by “Things” to drive product innovation?

Changing packaging based on sales metrics

Measure feature usage to impact user design

Understand failures to increase quality

Creating new products, services, or business models

Deliver additional product capabilities

0% 10% 20% 30% 40% 50% 60%

31%

47%

53%

55%

57%

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