Whether you reside in a large or smaller, up and coming business, accurate product planning is always essential to insure timely and responsive supply chain customer fulfillment, especially when new products are introduced to the market. For consumer electronics, the first few months of customer demand are the most critical. That includes the demand expected among different model variants of a product.
A reminder of such importance is reflected in this week’s business headlines concerning Samsung Electronics, and its recent release of the Galaxy S6 smartphone family. The company alerted its investors this week that second-quarter earnings would be disappointing because of laggard sales of its new Galaxy S6 model. According to a published report by The Wall Street Journal, Samsung may have misjudged demand.
The WSJ cites informed sources as indicating that when the Galaxy S6 family was launched April, the established supply and manufacturing plan called for demand for the Galaxy S6 to be four times more than that of the Galaxy S6 Edge, curve screen variant. It turned out that consumer demand was evenly split between both devices which led to a surplus of unsold S6 devices and an eventual shortage of the higher priced Edge model. Samsung’s supply chain teams then had to scramble to boost component supply and contract manufacturing levels of the Edge model.
As to how much the planning snafu contributed to a sales or revenue shortfall will come when formal quarterly results are reported. Final quarterly results are due later this month. However, the WSJ observed that the company’s stock has fallen 17 percent since the April launch of the Galaxy S6.
Certainly, Samsung is but one visible example of the importance of more dynamic and agile supply chain planning. Other manufacturers and retailers have experienced similar lessons, some public, others not as public but equally challenging.
The report serves as another timely reminder of insuring that adequate resources and more agile planning methods that sense product demand are continually incorporated in your supply chain planning.