Customer experience matters more than ever because today’s consumers expect greater responsiveness in their daily lives. A much-quoted study by experience management services firm Walker Information predicted that by the end of 2020, customer experience will have overtaken price and product as the key brand differentiator.
This reality also is reflected in expectations in the electronics supply chain regarding shorter lead times, more flexibility and greater agility. It’s all about delivering a business-to-consumer (B2C) experience in a business-to-business (B2B) world. Regardless of whether it’s healthcare, automotive, industrial or traditional consumer products, such as cell phones or appliances, companies are demanding intensified levels of responsiveness measured in days and weeks—not months and quarters.
Over the last 15 years, the consumer products movement has transformed the customer experience, with the B2B world following suit. Now, demands for higher customization and faster fulfillment are making rapid inroads across other sectors, including the automotive, medical and industrial.
In a traditional B2B supply chain model, material requirements planning (MRP) logic says, “Give me demand and I’ll convert it into supply and then tell you how long it will take to get you product.” Traditionally, procurement managers spent their time pursuing ways to get a better, more accurate forecast.
Changes in the global economy and supply chain capabilities have given consumers and businesses more options in creating adaptive networks. We’ve seen this trend accelerate with increased customer expectations intensified by the global pandemic. This crisis has given companies, especially in the electronics industry, an opportunity to rethink their approach to serving customers and redefine the customer experience.
Fortunately for Molex, the end-to-end supply chain over the last five years has operated at a very high level. We’ve had continuous improvement throughout the ecosystem as global networks have become more optimized, connected and agile, leading to greater visibility that’s translated to better decision support.
Data connectivity transforming supply chains
The big advancement over the last five to 10 years has been connectivity of information, which enables us to share richer information across the end-to-end supply chain. This leads to faster demand and supply decisions along with greater insights to improve resiliency to address market dynamics and disruption.
The ability to move information requires two things: first, the connectivity, or the tools and technologies that provide a conduit for real-time or near real-time transmission of accurate supply and demand details; and second, the partner and supplier ecosystem of rich data.
Covid-19: Ultimate test of supply chain resiliency
Still, nothing has tested our supply chain resiliency and agility like Covid-19, which caused unprecedented disruptions. For instance, global air freight capacity dropped 70 percent after air travel halted during the pandemic. That reality forced companies to re-configure logistic networks and strategically realign to more regional and local production models.
According to a recent McKinsey global executive survey, Covid-19 is propelling many companies forward. Digital solutions enacted in the spring of 2020 are leading to long-lasting business transformations. A host of changes Molex put in place to address demand surges and supply shortages during the pandemic are informing supply decisions on behalf of our customers.
Through teamwork and collaboration, Molex helped long-time partner Jabil respond to a major PPE customer’s dramatic increase in the volume of key parts for a legacy ventilator. Together, we assessed risks, developed contingency plans, identified alternative materials and ramped manufacturing with unprecedented speed once facilities re-opened.
The result of this effort was the ability to scale ventilator component production from a yearly purchase order history of around 2,000 parts to 20,000 parts in about six days. A week later, Molex delivered another 16,000 pieces to support this extremely important product build.
New service standard
As the electronics supply chain community begins 2021 with restocked supply lines, the industry must continue to rely on the connectivity of information and insights now available across our supply chains to guide our path forward. We’ve both experienced and demonstrated how information can help us accelerate the movement of equipment and people in response to unforeseen events.
Coming off an unprecedented year, our industry will need to continue responding at faster speeds with increased resiliency. Leveraging digital information for actionable insights is key to optimizing supply chain network speed and responsiveness. After all, many thanks to Amazon and others, you expect a self-service kind of experience when you go home. The B2B world is fast approaching equivalent service expectations and business needs to respond in kind. We must rise to that level of service expectation too, from the first mile of ordering a component to the last mile of delivering it to the end-customer – and everything in between.