MHI Solutions Improving Supply Chain Performance
The consumer electronics industry supply chain is highly complex, with a set of unique challenges that require particularly sophisticated solutions. Those companies that operate in the field have no choice but to prioritize innovation in order to keep up with a field that evolves at a blindingly rapid pace.
“The consumer electronics supply chain is known as an advanced and complex supply chain with some key characteristics that make it very challenging to meet their speed‑to‑market requirements,” said Pieter Strijland, VP and head of technology vertical, North America, for Maersk. “Companies in the consumer electronics space have perfected their supply chains in a surgical way in the past few years, while they have also been exposed to further disruptions, capacity constraints, regulations and increased security challenges.”
Helen Kom, COO of LEAFIO AI, said there is an evident emphasis on technological advances in the consumer electronics supply chain, and that emphasis is shaping how the field develops and responds to frequently changing conditions.
“Companies are increasingly adopting digital technologies and artificial intelligence to enhance supply chain efficiency, improve demand forecasting and optimize inventory management,” Kom said.
A Reliance on Overseas and a New Focus on Resilience and Omnichannel
Kom said that a significant portion of consumer electronics is imported in the U.S., primarily from China and other Asian countries, with large production capacities and competitive pricing.
“While this provides access to cost‑effective manufacturing, it creates supply chains with lengthy lead times and heightened vulnerability to external disruptions such as geopolitical tensions and natural disasters,” Kom said, noting that an IPC survey showed that 69% of distributors have experienced delivery delays averaging between three to six weeks. “Such delays sometimes can lead to cascading effects on profitability and operational efficiency.”
Consumer electronics companies are diversifying their manufacturing locations to enhance resilience against disruptions, having been prompted by the challenges of the pandemic, Strijland noted.
“Diversifying suppliers and establishing more adaptable networks are now critical strategies to manage risk,” said Jack Kallen, retail optimization expert at LEAFIO AI. “Retailers are also integrating risk‑based planning and predictive long‑term forecasting tools to anticipate potential disruptions more accurately, ensuring continuity of operations even when faced with unexpected changes in the global landscape.”
Consumer electronics face a range of regulations that can impact supply chain logistics. For instance, Strijland said, “Products entering the EU must meet traceability requirements, and components like batteries and semiconductor chips must comply with U.S. regulations against forced labor.”
Meanwhile, Kom said sustainability has grown as a priority in consumer electronics, and retailers are focusing on eco‑friendly practices and circular supply chains to meet regulatory and consumer expectations.
In addition, Kom said that online sales now contribute more than 30% of revenue in the consumer electronics sector, driving a shift toward omnichannel sales models.
“While physical stores remain integral, customers expect seamless inventory availability across both online and offline channels,” Kom said. “This omnichannel shift requires retailers to synchronize inventory across both online and offline channels to meet consumer expectations for availability and rapid delivery. Retailers must ensure seamless integration between online and offline inventory management to maintain the right balance, avoiding stockouts and maximizing customer satisfaction.”
Handle With (Extra) Care—and Security
The fragility and high value of consumer electronics and their components—even in incomplete forms—means that they require high visibility and insurance when transported to maintain a stable supply chain and reduce inefficiency and waste, Strijland said.
Kallen said that it is critical to ensure proper product transportation and handling across the supply chain in the consumer electronics industry due to the fragility and high value of the products involved.
“Electronics are often sensitive to impacts, improper stacking and temperature changes, making them vulnerable to damage if not carefully managed throughout the logistics process,” Kallen said. “Issues like incorrect pallet stacking, suboptimal packing and mishandling during loading and transit can lead to significant product damage, resulting in increased returns, extra costs for retailers and dissatisfied customers.”
As an example, Kallen said items such as televisions or laptops may arrive damaged if they are not stacked or secured properly during transit. Sometimes, they are mixed with unrelated goods, increasing the risk of impact or crush damage.
“The repeated encounter of damaged goods can drive customers to seek alternatives, impacting brand loyalty,” Kallen said. “Modern inventory management and logistics systems address these challenges by integrating advanced packing and stacking protocols into the supply chain process.”
Meanwhile, according to Overhaul, 23% of all cargo thefts in the U.S. in the first half of 2024 were of electronics, part of a growing trend the industry faces. As a result, companies are investing in monitoring and tracking solutions to better combat risking cargo theft, Strijland said.