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ST. PETERSBURG, FL – After weathering tumultuous tides of volatility over the past few years, 2020 is shaping up to be a better year for supply chain managers, thanks to increased market predictability, especially for sourcing materials, according to Jabil.

Still, the best defense – and greatest offense – for managing dynamic markets, product complexity and unpredictable supply conditions is an intelligent digital supply chain that delivers the visibility, agility, speed and resilience required to navigate Jabil’s top 10 predictions for 2020:

1. Expect continued rapid growth across the electronics equipment market. Trends like the electrification of cars and expanding IoT ecosystems will drive continued growth across the electronics market, requiring a watchful eye on supply/demand conditions. As a result, wherever possible, track supplier activities and leverage tools that help predict shifts in supply availability and better manage risk.

2. Additional insight into suppliers’ suppliers is needed to assess resiliency of raw material prices. Keep an eye on the rising prices of raw materials and follow pricing trends to detect and mitigate sourcing and availability challenges that could impact part selections and sourcing.

3. Diversify manufacturing operations. A growing trend among manufacturers is to diversify manufacturing locations, with an increase in companies seeking alternatives outside of China to reduce exposure to lingering trade issues.

4. Issues with labor shortages will continue. Just as agility is important in manufacturing, it will be equally so in the labor market. Particularly, China will be impacted and that could last at least until the second quarter of 2020. Labor shortages also will have an adverse impact on pricing for components and then, ultimately, could hit supply resources.

5. Manufacturers must continue to search for and secure more suppliers. Sourcing materials and components from multiple parties has never been more critical, says Jabil. This will be an ongoing concern in 2020. Diversifying suppliers, by materials provided, as well as geographic location, will grow in importance.

6. The M&A scene will remain active. An increased frequency of mergers and acquisitions is in the forecast, especially in the market for electronic components. This is exemplified by the recent news of the merger between Yageo and Kemet. While consolidations can offer the strategic advantage of serving as a one-stop shop in the interconnect, passives and electromechanical components space, nevertheless in terms of pure numbers, it leaves one less major player to work with, according to the firm.

7. Global GDP growth is down marginally but expect a continued rise in developed countries. Consumer demand for electronics is fueled by global economic growth. Early indicators reveal continued strong sales of electronics products, which could spur a spike in demand, followed by a supply shortage and increased prices. The need for predictive analytics and what-if simulations will rise in response.

8. Technology transitions will tighten legacy supplies. The continued rapid rate of technological transitions among electronics component suppliers could generate renewed shortages in short order. One of the most critical legacy-part shortages is in the MLCC segment, so it’s advisable to shift component selection to parts with longer lifecycles.

9. 5G will have a profound impact. Investments of substantial size in the latest wireless technology are going to pay off in many aspects of manufacturing. Mega-trending 5G is poised for profound impact, delivering unheralded speed and bandwidth to connect myriad machines, people and processes. Expect 5G to go from pilot phase to production phase in the later part of 2020 into the next year. As the technology takes hold, more and more applications will emerge.

10. It’s all about automation. Increased use of AI platforms will fuel continued digital transformations. AI also will help turn data into actionable items, providing self-correcting aspects for supply chains, while spotting patterns for needs and demands on a global scale. 

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