High-Tech Executives Expect Intra-Asia Trade Growth

Intra-Asia trade will see further growth in the coming years as high-tech companies shift more sourcing to the continent and increasingly target the region’s consumers, according to a survey of 200 industry decision-makers

Emerging Asian countries, as the Philippines, Vietnam, India and South Korea, will attract more supply sourcing from high-tech companies over the next three to five years, according to the survey of Asia-Pacific executives.

But although China and Japan are still expected to supply most high-tech companies, their dominance will face, according to the 2011 Change in the (Supply) Chain survey, conducted by IDC Manufacturing Insights and sponsored by UPS.

More than 80 percent of the respondents expected to be conducting more intra-Asia trade in the next five years, while 64 percent listed sustainability as one of their top priorities in the next three to five years.

Cost reduction and improving margins were ranked by respondents as the top business aims, and in a year that has seen high-tech companies impacted by the Japan earthquake and tsunami, and flooding in Thailand, risk management unsurprisingly took precedence as the top supply chain priority.

"As a consequence of continuing globalization and the lengthening of supply chains, any global economic, political, or environmental event could have far-reaching effects on the performance of companies," said William Lee, senior research manager at IDC Manufacturing Insights Asia/Pacific. "Moving ahead, we expect to see manufacturers placing greater emphasis on supply chain risk awareness and mitigation."

Other supply chain weak links featuring highly as areas requiring improvement were management inventory, end-to-end visibility, unstable suppliers and demand planning.

“Changes in the global economy have redefined the supply chain needs of high-tech companies,” said Chris Grubb, vice president of marketing for UPS Asia Pacific region. “As manufacturers adapt to market changes and look for ways to reduce cost and improve efficiencies, having a flexible and efficient supply chain is essential.