­­DHL report shows how logistics companies help make semiconductor supply chains more resilient

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  • The chip shortage of the past years highlighted the critical role of semiconductors in the world and the importance of supply chain resilience
  • Semiconductor manufacturers expand manufacturing capacity to secure supply chains and satisfy the growing demand for chips, where logistics companies can play an active role in supporting this expansion
  • DHL identifies four key approaches for companies to futureproof their supply chains: digitalization, collaboration, resilient product and inventory strategies, as well as sustainability

Given recent semiconductor shortages, DHL’s report titled “Resilience of the Semiconductor Supply Chain” draws on interviews with business leaders from different industry sectors to identify the key areas in which companies are adapting their semiconductor supply chains to make them more resilient and flexible. Four themes emerged: accelerated digitalization, stronger collaboration, robust product and inventory strategy, and sustainability. The report also highlights opportunities for logistics providers to support companies as they increase the resilience of their semiconductor supply chains. By providing better supply chain visibility and data insights, logistics providers help their customers improve their inventory strategy and support their sustainability initiatives.

“The demand for semiconductors will continue to increase while the market environment remains in flux. Hence, supply chains must be stable and nimble at the same time to ensure the flow of goods worldwide. As the world’s largest logistics company, we work across the supply chain to gather critical data, develop operational capabilities, and monitor opportunities for improvement in resilience, reliability, and sustainability. In this way, we can improve the resilience of semiconductor supply chains together with our customers.” says Alexander Gunde, President of the Technology Sector at DHL Customer Solutions and Innovations.

Taking an active role in the construction of new semiconductor plants

As supply chain disruptions have resulted in revenue misses of more than USD 500 bn worldwide in 2020 and 2021, according to Deloitte, companies in the semiconductor industry will double their investments and spend USD 99 bn in 2022 to increase manufacturing capacity and satisfy the growing demand. Parallel fab construction projects in multiple regions are facing numerous challenges to deliver products on time and on budget. Specifically for the semiconductor industry, logistics companies can help with the complex orchestration of parallel delivery, tooling, and servicing of capital equipment, and other machinery from multiple sources.

Futureproofing the supply chain with four key approaches

Through interviews with supply chain leaders from different industry sectors, DHL identified four key themes to help companies achieve their resilience goals:

Digitalization. Timely detailed data on shipments, inventories, transport assets, and suppliers enables essential visibility in the semiconductor supply chain and provides valuable insights. Data analytics boosts operational efficiency and improves decision-making. Logistics companies can help run analytic platforms to enhance transport visibility and warehouse operations to gain a holistic view of the supply chain.

Collaboration. Constrained transport capacity and capital equipment availability in the semiconductor supply chain are best tackled together with logistics providers. As these partnerships broaden in scope, globally integrated networks with centralized management are emerging and building resilience.

Robust product and inventory strategy. Switching to extra safety stock, more flexible fulfillment networks, and product line simplification in the semiconductor supply chain necessitates targeted support. Logistics providers can offer additional warehouse capacity, new forward stocking locations, inventory data analytics, and more.

Sustainability. Companies are focusing on minimizing environmental impact while maximizing resilience in the semiconductor supply chain. Logistics providers can provide transportation and warehousing emissions data, optimize routes, loads, and transport modes, deploy sustainable technologies such as electric trucks and alternative fuels as well as help develop closed-loop logistics and circular economy initiatives.