LG addresses Nexus supply chain rumors
Strategic Sourceror on Friday, January 18, 2013
LG officials recently disputed rumors that the supply chain for the company's Nexus 4 were under strain, claiming its manufacturing processes are experiencing no problems and its production is moving along according to plan. This was the first time the company addressed any supply chain questions concerning the device.
This statement is in stark contrast to the unavailability of the device. Consumers have been unable to purchase the device through the Google Play store or other retailers, causing frustrations for customers worldwide. These product shortages have led to speculation there is a problem within the LG supply chain and that the company is unable to keep up with demand.
Further fueling concerns was a comment made by Google's United Kingdom and Ireland managing director that called LG's supply chain "scarce and erratic," apologizing to consumers for product shortages and claiming the situation was the result of poor communication between the two companies.
While LG did attempt to alleviate supply chain concerns, the companydid not choose to mention the device shortage that has plagued the market or to comment on Google's allegations.
Proper supply chain management essential
Situations such as this highlight the importance of a consistent and efficient supply chain. Companies that fail to completely address product shortages could find their reputation with consumers is damaged in the long run. While it is often important for businesses to be honest with consumers about supply chain shortages that result in massive shortages, such as LG's, such problems can often be avoided entirely by proper management and optimization.
To prevent shortages of raw materials or products necessary in the manufacturing process, corporations may find it useful to implement strategic sourcing measures that will ensure supply shipments are consistent and take into account the importance of business cost reductions. Similarly, many businesses may find it useful to streamline manufacturing processes and shorten logistical routes to ensure products get to consumers in the quickest and most affordable way possible.
Failing to optimize a supply chain can result in damages for a business and cause problems such as production hold ups, raw material shortages and lost sales. One small issue early in the supply chain can lead to more serious and costly problems in the future, making proper management critical for companies with complex purchasing, manufacturing and logistical strategies.