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Supply Chain Management in the Electronics Industry: 3 Tips to Do It Smarter

With unprecedented product demand, freight capacity challenges, trade tensions, and more aggressive competition, supply chain management in the electronics industry has never been more complex or costly.

And the stakes are high. Inexact shipping schedules for electronics components could halt production lines and delay product launches – with 6-figure revenue losses possible.

As a global 3PL that primarily serves manufacturers in electronics and other high-tech industries, there are some common opportunities Dimerco people regular see. This article offers 3 tips to improve your global supply chain operation. For the full story, read our complete eBook: 8 Ways to Streamline Global Logistics for Electronics Products.

Manage the Complexities of Global Relocation & Expansion

Many electronics manufacturers are relocating operations to new countries to avoid onerous tariffs or simply to increase production. If you make such a move, understand that each country has its own set of regulations and rules. You could easily run afoul of customs and local regulatory requirements without knowing it, or miss out on huge tax incentives being offered by the country’s economic development organizations. Few small and medium-size enterprises have the internal expertise to successfully manage new market expansion on their own. When coordinating supply chain management in the electronics industry, it helps to work with a logistics provider that has deep in-country experience to help you enter new markets successfully.

Capitalize on Air Freight Consolidation

Many makers of high-demand electronics or high-tech products choose to ship products immediately upon order, wishing to avoid idle time that they associate with lower-cost consolidated shipments. Consolidations don’t have to require long waits between shipments, and can save a considerable amount in shipping and customs clearance fees. The key is finding a freight forwarding partner that has the freight capacity and frequent flights in your high-demand lanes. Such a forwarder can consolidate multiple daily pickups into shipments two or three times a week instead of every day – so you get the best of both worlds: lower cost shipping that still meets your customer’s delivery requirements. Also, by combining multiple shipments into a single customs declaration, you reduce your customs clearance costs.

Ensure Shipping Document Accuracy

Electronics and high-tech companies may spend millions per year on air freight only to have shipments delayed due to paperwork errors. Common errors we see: values calculated with the wrong currency, inconsistent answers to the same questions on different shipment documents, and unclear guidance on whether the freight is pre-paid or collect.

If your shipping documents are incorrect, your items could be taken off the plane before takeoff or held at customs at the destination.

While you, as the shipper, are ultimately responsible for completing all documents correctly, the right freight forwarder can help. For instance, you’ll gain a huge advantage by aligning with partners that run paperless operations and can eliminate spreadsheets, emails and data entry by automating data transfer. Manual processes always lead to mistakes, so automate whenever possible.

Bonus Tip: Work with an AEO-certified partner

For shipments bound for Asia, you don’t want products delayed at destination due to the bureaucracy of the customs process. It’s best to work with logistics partners that have Authorized Economic Operator (AEO) status. AEO-member companies adhere to rigid security practices. Customs authorities recognize AEO companies as low risk and, therefore, grant them benefits such as reduced inspection rates and priority dispatch. In China, for instance, companies like Dimerco that have the highest level of AEO status can cut clearance time as much as one full day.

To learn more about overcoming common mistakes in supply chain management for technology products, download our e-book: 8 Ways to Streamline Global Logistics for Electronics Products. Or, to discuss how we can help you manage your electronics supply chain, contact Dimerco today.