What are the Key Logistics Challenges High-Tech Firms Face in Emerging Markets?

Philip Wu Vice President of Marketing UPS

When high-tech manufacturers try to supply products to a new market they really have to trust their partners, especially a logistics provider that can help them deliver to customers or their distribution centers. Intellectual property and brand protection are critical because the distribution channel is not always in the company’s control. Distributors often have access to the product. Companies also must be aware of local competitors that could easily view and replicate a product very quickly.

That’s why it’s important to select a logistics provider that offers in-transit visibility via real-time tracking technologies that allow the shipper to follow goods to the destination.

Logistics partners also should provide customs-brokerage services that help companies navigate local regulations, forms and the process to clear packages or freight shipments. An experienced logistics provider will facilitate both the transportation and the handling of required shipping forms.

High-tech firms may need reverse logistics services as well. As a company’s products move to a consumer, the company’s leaders need to think about how the products will be repaired. Post-sales support is key to ensuring customer satisfaction and can be a significant profit source.

A convenient returns process can lead to word-of-mouth customer recommendations as well as repeat business. A logistics provider that offers a fully integrated approach to the post-sales support cycle can help high-tech firms reduce service costs, provide better and faster customer support worldwide, gain global visibility and accelerate the movement of parts and products through the reverse logistics supply chain. A service-parts logistics network with warehouses and comprehensive same-day and next-day transportation services can help companies meet stringent service-level agreements. 

High-tech companies should also consider some of the infrastructure challenges they may encounter when they enter new markets. Many emerging markets lack well-developed road, air or ocean networks. In some cases, shippers may have to cross several country borders using a combination of air transportation and trucks to get to the end customer.

Not every supply chain partner can organize something that sophisticated, so most companies need to rely on a provider with experience in that market to help facilitate various transportation requirements and mange challenges at border crossings. In addition, the provider should represent the values of the shipper. For instance, a reputable logistics partner will be in good standing with U.S. and foreign governments and be familiar with the Foreign Corruption Compliance Act (FCPA). FCPA is a federal law under the U.S. Securities and Exchange Commission that prohibits the payment of bribes to foreign officials to assist in obtaining or retaining business.

Another important consideration is a company’s go-to-market strategy. Emerging markets are not like mature markets where companies can easily predict demand for their products. High-tech firms will need a solid go-to market strategy that is supported by a flexible supply chain strategy.  The flexible supply chain strategy could consist of a very small-volume express shipment versus a large air or ocean shipment. Companies must understand the transportation expenses associated with such shipments and have the flexibility to change their shipping plans as they grow in that market.

That’s where working with an experienced logistics provider and the variety of services it offers is important. The provider should have a scalable, multi-modal global network that allows a company to be successful in any emerging market.