Why flexibility is crucial to the success of your outbound logistics

When it comes to outbound logistics - i.e. the processes involved in controlling the shipping of application-ready products to their end users - the ability to adapt, in order to reach new markets and meet ever-changing customer demands, is vital.

In order to succeed, there are some important questions that you should ask yourself about the future direction of your company. Where in the world is your target market based? Where will it be in five years’ time? What specific geographical and time considerations do/will you need to take into account if you need to ship to a variety of locations? What additional products or services will your future customers demand? 

By thinking ahead in this way, you can begin to work out what logistics arrangements you will need to have in place, to meet shifting requirements. If you are growing and targeting new opportunities, you will likely be coming up against specific challenges. For example, perhaps you don’t have the space into which to expand. Or maybe you need to ship products from different divisions of your organisation at disparate times. 

Outsourcing your outbound logistics could be the solution that you require, enabling you to overcome any obstacles you are facing. In this blog post, we will explore how partnering with an electronics manufacturing services (EMS) provider will help to ensure you are fully equipped for change in a fast-paced global environment.

Implementing flexible manufacturing systems

Mass customisation, late-stage configuration and postponement manufacturing: these are all sophisticated systems and processes that allow the unit cost savings of producing in volume to be combined with the flexibility of individual product customisation. In practice, mass customisation is where configuration is not carried out until the latest possible stage. Typically, an original equipment manufacturer (OEM) will have already received orders for their products and, therefore, they will know the relevant customer details, product requirements, the exact configurations, the options to be fitted, etc. and the delivery destinations.

For instance, one customer might order 1,000 units configured to their requirements, while another needs 5,000 units configured differently to suit their application. Furthermore, these products might need to be shipped to territories on separate sides of the world. In order to achieve all of this, an agile manufacturing environment is necessary.

The best EMS providers will have already implemented the robust processes and procedures that will enable them to respond quickly to changes in customer needs while still controlling their costs and quality - for instance, sophisticated document control systems capable of managing multiple revisions of build data and engineering change notes (ECNs).  

In his book, Logistics and Supply Chain Management, Martin Christopher suggests that companies have to understand the customer order cycle, which is how long their customers are willing to wait for the products they order. This needs to be considered alongside material lead-times and manufacturing hours, to decide how agile systems need to be. With a short customer order cycle, long material lead-times and a complex product with lengthy manufacturing times, agile production is clearly required.

Materials and supply chain

Without all of the material and components required to complete an assembly operation, no manufacturing facility - regardless of how slick its processes, systems and staff are - will be able to implement an agile environment. This means that sophisticated supply chain management, to include supply chain pipelining, is also required.

The best EMS providers will be adept at managing this process, which involves planning where inventory needs to be along the supply chain. There are multiple options and selecting the right mix of these for each product can be critical, in order to produce a flexible, agile solution. 

With the emergence of smart manufacturing and Industrie 4.0 (which you can read about in more detail here), technology can contribute largely to success in this area. Writing for Supply Chain Management Review, Michael Gravier says: "Digital supply chains enable business process automation, organisational flexibility, and digital management of corporate assets." Gravier cites technologies such as RFID (radio frequency identification), GPS and sensors, which can aid more sophisticated data capture and analysis.

Implementing these processes can provide a much clearer picture of stock levels, allowing manufacturers to react more quickly and efficiently to changes in customer demand - all of which results in better decision making. According to a 2014 report by Accenture, 60 per cent of companies with an enterprise-wide big data and analytics strategy saw an increase in supply chain efficiency of 10 per cent or greater, while 55 per cent enjoyed better customer and supplier relationships as a result.

Flexibility lies at the core of a successful outbound logistics operation. In order to keep ahead of the curve in a global environment where change is the norm, OEMs need to be able to twist and flex to meet new and varying customer demands. Outsourcing to an EMS provider can enable you to meet these requirements; the best partners will already have in place the systems and processes needed in the industry today - and tomorrow. 

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Written by Neil Sharp

Neil has over 25 years’ experience in Electronics Manufacturing Services and Component Distribution. During his career, Neil has held a range of leadership positions in sales, marketing, and customer service. Neil is currently part of the ESCATEC Senior Management Team and is responsible for setting and delivering the overall Group Marketing strategy. Neil heads up the marketing department and is responsible for both the strategy and the implementation of innovative marketing campaigns designed to deliver high quality content to those seeking outsourcing solutions.