In the high-tech industry, managing product lifecycles isn’t just important: It’s paramount to business survival. Lifecycles are increasingly short, as Moore’s law denoted back in 1970 that overall processing power for computers would double every two years – meaning new tools, technologies and hardware would need to be inserted into the supply chain. Managing innovation is a critical part of the high-tech industry, and there are a few distinct challenges that this field faces.
It’s integral for supply chain managers to make sure they are managing innovation effectively and maintaining their product lifecycles in as streamlined a way as possible. By integrating supply chain management tools with product lifecycle management tools, these organizations can foster successful business practices.
Challenge: Shortened lifecycles
In 2015, Scientific American contributor Annie Sneed reported that Moore’s law was still going strong despite the original predictions that the concept wouldn’t last 20 or even 10 years. Technology is becoming more powerful, not to mention physically smaller, and high-tech companies have to adapt to the changing requirements of their industry.
“Many technologists have forecast the demise of Moore’s doubling over the years, and Moore himself states that this exponential growth can’t last forever,” Sneed wrote. “Still, his law persists today, and hence the computational growth it predicts will continue to profoundly change our world.”
Compounding the already large problem of ever-shortening product lifecycles is the fact that current events have an effect on the supply chain, too. According to Spend Matters’ Kaitlyn McAvoy, in fact, the recent U.K. vote to leave the European Union, or the “Brexit” vote as it’s commonly called, will have untold impacts on the tech industry and on supply chains in general. Labor shortages and changes in trade regulations are both potential effects of the Brexit vote – and tech companies will have to be agile in order to respond to these changes.
It will be important to watch how the Brexit vote impacts the supply chain.
Challenge: Conflict minerals
Another key issue facing the high-tech industry of late is the regulations surrounding conflict minerals. In 2010, the Dodd-Frank Act was passed by Congress, effectively making companies report any use of tantalum, tin, gold or tungsten to the Securities Exchange Commission. The goal of this trade act was to protect consumers and investors from another recession like the one the U.S. suffered in 2008 – and it required traceability of these problematic materials, many of which originated in or near the Democratic Republic of the Congo.
The SEC projected that around 6,000 public companies would be impacted by this act. Organizations now have to report whether their products contain these materials and what steps they have taken to ensure traceability within their supply chains. Since these minerals can be found in phones, computers and other technology implements, the high-tech vertical especially has to pay attention to these new regulations in order to make sure their products are compliant.
Integration is key
The challenges faced by the high-tech industry necessitate a different approach to the supply chain. A highly visible, collaborative and connected supply chain that integrates product lifecycle management with supply chain management is the most effective way to stay on top of industry trends. No matter where innovation happens – from the business to the customer – it’s critical to undertake successful PLM and SCM integration.
Innovation management solutions from Inspirage, including our PLM and SCM suites, can help high-tech companies stay on top of their supply chains and make sure their operations are able to respond with agility to changing situations in the global marketplace. Our specialized conflict minerals solution offers operations managers the tools they need to gain key insight from their supply chains and helps trace these minerals.
Contact Inspirage today for more information about how our solutions can help you better manage your supply chain.
