It's not the first time I've written about wearables and it certainly won't be the first time you've read about it. Since the start of the year and my visit to CES (Consumer Electronics Show) in Las Vegas I, along with most of the industry, have been talking about this new sector and the potential it holds. Only yesterday I was listening to the quarterly conference call of one of the world's largest contract manufacturers and the topic was enthusiastically discussed between the CEO and the analysts during the Q&A session.
Clearly the market offers opportunities to OEMs and contract manufacturers alike, but what challenges face their supply chains as these two worlds attempt to coexist and develop solutions that utilize both products? The electronics and apparel supply chains are very different, not just in geography, but also in terms of technology, governance and most importantly traceability.
Geographically the apparel supply chain has always been somewhat different to that of the electronics industry. India, Bangladesh and Indonesia, all have well-developed supply chains in the apparel industry, but have not enjoyed the same success in the electronics sector. Both supply chains do share certain geographies, notably China, where both industries have developed as a result of low cost labor, controlled industrial development and great infrastructure.
Given the nature of potential wearable electronic products it seems likely that these two supply chains will need to merge or at the very least operate in parallel. For me it seems mergers are a likely outcome, as apparel companies get involved in electronics and electronics companies explore apparel. Perhaps we'll see the creation of some mega outsourcing businesses even larger than those that already exist in the two sectors separately.
For these two supply chains to coexist or merge, one factor above all others is imperative - traceability. And in a world of big data and IoM (the Internet of Manufacturing) it has never been more possible for differing supply chain models to operate on a common data platform and with common visibility.
Given the concept of big data driving an Internet of Manufacturing in both industries, it seems only logical that the two lots of data can be mined to develop a single supply chain solution that provides everything needed for both industrial solutions.
Having said these supply chains are very different, there are a number of important similarities and common demands that good traceability and big data address.
Both industries have challenges regarding counterfeiting. We've all read about counterfeit components and anyone who has travelled has been offered a counterfeit Rolex watch or Gucci bag at a market or on the street. Both industries need to manage this risk to brand, revenue, reputation and even customer safety. On a similar note, they all have IP issues to face as new products are developed to be launched globally. Those global launches also bring their own challenges in terms of ramping production quickly and in multiple geographies. The latest Apple iPhone and the latest Prada handbag are not so different in this way; they both need to reach the market, with their IP in tact, in huge volumes, simultaneously in the high streets of London, New York, Shanghai and Tokyo.
All these challenges are practically met in a world of extreme traceability. Complete traceability as a product of big data would allow supply chains to operate in parallel, sharing common nodes and common objectives.
As we move to a world where big data and the Internet of Everything becomes reality, the lines between industries and supply chains start to blur and industries can really come together as one manufacturing sector.
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