Semiconductor market must streamline supply chain
An improvement in the flexibility of semiconductor supply chains is vital if the industry is to enable itself to respond to predicted increases in demand. According to research carried out by Gist, the supply chain management specialist, it is widely felt that poor supply chain management is a key contributor of the current semiconductor downturn – the worst in the history of the industry.
The research revealed that the semiconductor industry still lags behind the global supply chain design and operational capabilities of other equally capital-intensive industries. Only half of the respondents had an integrated supply chain strategy and 40 per cent of those asked did not use any formal review process to ensure their supply chain could keep up with market needs.
More concerning still is the fact that over 60 per cent of respondents did not externally measure supply chain performance against competitors, and internal reporting of supply chain performance is weak in comparison with many other industries.
Ian Sheppard, Gist’s head of Managed Solutions, comments: “A possible explanation for these results is that the semiconductor industry has developed long, highly complex, disjointed supply chains - making them difficult to manage. This results in any slight imbalances between supply and demand being amplified as they move along the supply chain.
“To address this the industry must develop an integrated and responsive supply chain. This would allow supply and demand to be more accurately matched and would make the supply chain more manageable.
”In order to aid this process, our Managed Solutions team can act as a ‘strategic guardian’ of a client’s total supply chain. This gives us end-to-end visibility which in turn allows us to proactively manage any exceptions that may occur along the supply chain, resulting in a smooth flow of products from beginning to end. This results in optimisation of service levels at minimal supply chain cost.”
As a result of the research, six key trends have been identified within the semiconductor market:
- a lack of visibility across the supply chain is perpetuating supply and demand mismatches;
- globalisation and scale are increasing the need for co-ordination and integrated supply chain planning and collaboration;
- connectivity of businesses through the extended supply chain is becoming the single greatest area of focus for management;
- new and evolving semiconductor applications are driving the need for more complex system designs with shorter design cycles;
- there is a greater need to outsource non-core business functions and focus on the value added activities
- although innovative and high-tech, the semiconductor industry still lags behind other industry sectors in terms of its supply chain performance.
The semiconductor industry needs to address these trends, and encourage recognition of the importance of good supply chain management amongst its executives. If this happens, the semiconductor supply chain will add real value to the industry and will help it to better withstand future market fluctuations.
The research was carried out on behalf of Gist by management consultancy PRTM.
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Notes to editors
Gist combines leading edge experience and expertise to transform supply chains through intelligent application of innovative leading edge technology, unique solutions tailored to customers’ strategies, managing change and embracing and enhancing the supply chain proposition. With industry specific experience, expertise and excellence, Gist’s solutions bring end-to-end visibility and implementation, from concept to delivery.
Gist, based in the United Kingdom, has its head office at Basingstoke in Hampshire. However, Gist’s 4,500 employees operate out of 28 locations, providing a full range of intellectual and asset-based business offering in the UK, continental Europe, Asia, Australasia and North America.
Gist’s customers (including Ocado, Marks & Spencer, British Airways, Carlsberg UK and Budgens) operate in a wide range of commercial and industrial sectors, including grocery, electronics, apparel and gas.
As part of the BOC Group, which serves two million customers in more than 50 countries, Gist also benefits from BOC’s global capability, synergy and scale.
To find out more about Gist, for photography or to arrange an interview with the Gist team please contact the Gist press office:
For more press information, contact:
Michele Mervin
Tel: 01256 891111
Fax: 01256 891122
Email: michele.mervin@gistworld.com
