Supply Chain Challenges: The Millennial Buyer

| March 8, 2016 | 0 Comments
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The terms “supply chain” and “challenges” go hand-in-hand. As a result, businesses look for challenges typically rooted in economic conditions, ease of trade, market barriers, demand shifts, purchasing confidence and other external events. However, there is an important, new current in today’s supply chain that poses an equally new set of growth challenges to corporations.

Millennials1This trend is rooted in a demographic shift that brings significant sociological and economic changes: millennials. Currently, a generational shift is taking place in management as millennials move up the corporate ladder bringing very different technology orientations and approaches to business relationships, communication, and expectations. Additionally, millennials are moving into the more established consumer demographic brackets, and hence, their voice is weighing more heavily in how end-product designs and services are presented.

To be sure, millennials — individuals born roughly between 1980s and the early 2000 — have received a good amount of press regarding their attitudes toward products and services. In considering the electronics supply chain, there is more than a passing interest in the human component of technology shifts. Millennials are not only the first generation born into widespread home computing, cellphones, and related technologies; they have not experienced major consumer technology innovations, as Ipsos research underscores. This habituation and presumptive orientation to smart devices sets millennials apart in both their consumer and managerial expectations.

Millennials are now the corporate leaders making decisions about digital business investments, partnerships, and purchasing behaviors. How these decisions are made is informed by their relationship to and expectations of technologies, which are significantly different from previous generations. The rise in federated ecosystems as a means for providing improved customer solutions — combined with an affinity for shared or collaborative economic orientations — are starkly in contrast to the previous generations’ hierarchical management and sole-provider orientations to corporate organization and partnerships. The deeper integration within and across corporations to improve supply chain solutions and attain new levels of growth is rooted in the deep commitment to the digital ecosystem and IT infrastructures, as discussed in Verical Connect.

The Millennial Manager

Millennial managers are more enthusiastic in the adoption of automated business processes, procurement, and sourcing. These core business functions are rapidly discarding the traditional, interpersonal relationships and phone call approach to transacting business. The same millennial social shifts that simultaneously favor text-based media (versus spoken) social interactions are, naturally, also affecting the shift to more text-based business communications person-to-person relationships. While this might seem, on the face of it, an insignificant social moment, the impact on how digital business is adopted and then utilized as well as how to reach and appeal to b2b customers is significant.

When we consider the rise of e-commerce in the consumer realm, pre-millennial consumers show less aversion to calling vendors, going to a brick and mortar business, and being guided through new processes by a human interlocutor. Similarly, these generations of business professionals matured in a business environment where procurement was about your connections to sales representatives and relationship management was critical to order generation; although differences in cultural mores informs the degree of shift away from the spoken, interpersonal business relationships. These shifts to more text-based communication in additional to more reliance on automated, digital business processes is supporting the rise in prominence and success of online procurement marketplaces.

For example, online components marketplace Verical.com enables one-stop shopping through its wide variety of component and vendor choices. In depth information about product specifications, provenance and compliance can be instantly accessed through Verical’s API. The API can be integrated into a customer’s internal supply chain solution to make e-commerce transactions even more seamless.

Along with internal shifts, there is a rise in the scope of business relationships as customer bases broaden and market boundaries blur. The electronics industry sees vertical markets blurring, as automotive OEMs contend with consumer evaluations of their vehicles based on the infotainment system experiences. No longer is a car a machine; it is also a mobile tech device that must now pass the same muster as consumers’ smart devices. These blurring lines are clearly exemplified at this year’s Mobile World Congress, where new automotive technology took center stage.

The millennial consumer and the millennial manager are the same person, and their expectations of how their devices and their corporations operate and collaborate are not necessarily discrete. Solutions that incorporate directly with the digital ecosystems will be required to serve the next generations of consumers and business partners.

From the perspective of the global electronics supply chain, the strengthening and rapid growth of sophisticated and highly-interactive, transparent, and authentic online marketplaces such as Verical.com bear witness to the transformations happening within corporations, the breakdown of market silos, and the evolution of IoT for the next generation of business professionals and of consumers.

 

 

 

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Category: Smart Purchasing

About the Author ()

Lisa Ann Cairns, Ph.D., Contributor Lisa comes to EPS with a diverse background that includes 10 years of hands-on experience in IT as well as in semiconductor and electronics distribution. The majority of that time, Lisa spent in the role of Senior Market Analyst and Senior Contributor at a leading, independent distributor of semiconductor and electronics. Prior to that tenure, she was a professor of linguistic anthropology, engaged in social science research, modeling, and analysis. The skills of observing and explaining complex social patterns adds a rich framework in which to indentify and to understand the range variables that constantly affect today’s globalized marketplace. Lisa’s admixture of experiences brings a fresh eye and a contextualized understanding of the global semiconductor and electronics supply chain. Lisa’s market analyses provides readers with unique views spanning micro- to macro-level industry events, synthesized insights bridging business and economics, as well as connecting the dots between upstream to downstream industry events that affect and inform distribution strategies. Lisa has a Ph.D. and A.M. in Linguistics from The University of Chicago, during which time she was awarded the prestigious National Science Foundation Doctoral Dissertation Research Improvement Grant. She holds a B.A. from Hofstra University, where she was Hofstra's first woman undergraduate to be awarded a Fulbright-Hayes Grant for independent research prior to attending graduate school. Lisa is currently consulting and freelance writing and can be reached at lcairns@lcairnssolutions.com.

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