Mitigating supply chain risk continues to be an increasing area of focus for numerous businesses across the globe. Those whose facilities were impacted by the recent Oklahoma tornado, Superstorm Sandy and the like know first-hand the lessons learned and key measures necessary to prepare (as much as one can) for such natural disasters. And while preventing such events from happening is unrealistic, they perhaps serve as a learning road map for other risks impacting businesses, their key stakeholders, suppliers and customers that the global supply chain must take into account.
In fact, suppliers are the ones who are significantly less prepared than their clients to respond to climate change, according to findings in the “Reducing Risk and Driving Business Value” from the Carbon Disclosure Project (CDP) and Accenture released in Q1 of 2013. Not surprisingly, this increases supply chain vulnerability and threatens customer relationships.
What’s more, no market vertical is exempt. Climate risk impacted those electronics manufacturers in Thailand during the 2004 earthquake and tsunami. But one must not exclude such threats as the political risks based on region; health hazards and poor working conditions; cyber- and intellectual property risk; factory fires; strikes; capacity issues; and much more that we face today. Now, take a specific market vertical, such as the electronics industry which houses numerous level of activity where even the smallest change can wreak havoc on the entire process of the chain, from pre-production all the way to the consumer reporting a defect, or better yet, a product recall. For any company within this sector, having the right business partner can help an enterprise track all of the systemic challenges it faces in addition to offering solutions and implementing them while at the same time, addressing those different levels of risks in the electronics industry.
“At the high level, the challenge that we face is that we are operating supply chains that today have an enormous number of risks,” said Douglas Kent, Vice President of Avnet Velocity. “The likelihood for supply chain disruptions has never been so high. If we look at natural disasters, for example, we’ve not been lacking in the occurrence. In the automotive industry, we face the possibility that second- or third-tier suppliers may not be able to fund research and growth in that sector. The supply chain is riddled with risks, and the challenge that we all face is: ‘How can we cost-effectively de-risk the supply chain?’ Everything that we do is about removing risks on a cost-effective basis, whether that is through ensuring supply continuity or getting a better handle on demand volatility upstream and downstream. That’s where our industry is focused, and that’s where Avnet Velocity is positioned.”
Avnet addresses the challenges with innovation
Avnet Velocity (of Avnet Inc.),which serves as a liaison of sorts for those in the electronics industry, supports the functions of Avnet Electronics Marketing and Avnet Technology Solutions. The business unit is atypical of the industry in its solutions offerings, which reach across the entire market to OEMs; electronics manufacturing services (EMS) providers; component suppliers; third-party logistics services providers; and other players at regional and global levels. It’s a comprehensive attempt to help identify trouble spots ahead, smooth bumps in the system and create the specific supply chain(s) that businesses need to be the most competitive and cost-efficient enterprise in the market. In addition, the company creates new value streams that can add additional revenue to the divisions; and incubates models and new tools that can be leveraged across different customers.
So what are the new tools and models that Avnet Velocity uses to assist its customers?