Tech 'will take supply chain to next level' - Molex CSCO
The year ahead will see technology take supply chain infrastructure to new levels of data-driven accuracy and reliability, says the supply chain leader of a major electronics manufacturer.
Don Hnatyshin is Chief Supply Chain Officer at Molex, a US-based manufacturer of electronic, electrical, and fibre optic connectivity systems.
The company offers an estimated 100,000 products across a variety of industries, including data communications, medical, industrial, automotive and consumer electronics.
Hnatyshin predicts that 2024 will see increased adoption of digital tools and AI, which he expects to “accelerate the delivery of data-driven intelligence to better manage global supply chains and increase on-time customer deliveries”.
He feels Increased adoption of AI, predictive analytics, digital twins and machine learning will gain “greater momentum and acceptance” in the year ahead.
“These advanced data-driven tools will deliver real-time visibility and actionable business insights to help companies respond with greater speed in bolstering supply chain resiliency,” Hnatyshin says.
He adds tech-driven improvements to supply chain will help businesses navigate “continued fluctuations in market demand, which will be an overarching issue in 2024”.
Market demand in 2024 'will fluctuate'
He says: “Each industry sector – from automotive and consumer devices to data centres and electrification – is moving at a different pace, creating both upticks and downturns in market demand.
"For instance, 2023 was a strong year in the automotive sector, but uncertainty in global interest rates and forecasted headwinds in the electric vehicle (EV) market could cause demand declines in the new year. While EVs remain in an innovation cycle, inflationary material costs are moving price points past what was previously anticipated.”
Trade and tariff issues, meanwhile, will be “a constant concern for global supply chains”, believes Hnatyshin.
“This is why it’s increasingly critical to select the right suppliers in the most favourable regions closest to end customers,” he advises, adding: “As global markets rebalance inventory levels, optionality will become a core strategy to mitigate issues such as foreign currency exchange rates and geopolitical volatility.
“This will be particularly important in the electronics industry in 2024, with an even stronger bias in Mexico and Southeast Asia.”
On inventory, Hnatyshin feels that, while high pandemic-driven demand caused an ‘inventory hangover’ in 2023, this “should dissipate by the second half of 2024, as inventory levels continue to rebalance”. He predicts this will occur “first at the component level, then work through raw materials”.
Hnatyshin sees tech making a positive impact on inventory management.
Data ecosystems 'will help supply planners'
He says: “In 2024 ongoing investments in enriching data ecosystems will elevate overall demand and supply planning initiatives. Excess inventory is a great example, as AI and ML can optimise inventory health and velocity, while generating a much clearer picture of potential outcomes to improve decision making.”
A bright note for 2024 will be logistics, feels Hnatyshin.
“In 2023 logistics costs returned to a balanced state that almost approached pre-pandemic levels,” he says. “The primary challenge in 2024 will be commodities costs, which are expected to remain high, driven by labour inflation and currency exchange rates. Optionality in supplier selection will go a long way toward mitigating these costs in the coming year.”
- For further insight check out other issues of Supply Chain Magazine, as well as Procurement Magazine & Sustainability Magazine
-------
BizClik is a global provider of B2B digital media platforms that cover executive communities for CEOs, CFOs, CMOs, and leaders in sustainability, procurement, supply chain, technology & AI, cyber and FinTech. It also covers industries such as manufacturing, energy and EV. BizClik is based in Norwich, London, Dubai & New York. It offers content creation, advertising and sponsorship solutions, webinars & events.
