It is an irony that the computer hardware industry that helps other sectors in building an ‘integrated supply
chain management system’ does not have a well-developed, value-added supply chain system for its own
procurement and distribution. This paper empirically analyzes the existing supply chain practices in the
Indian computer hardware industry. The analysis focuses on the status of procurement and distribution
chains in the Indian hardware industry along the major dimensions of supply chain like inventory,
transportation, facilities and information. The findings suggest that though underdeveloped currently, the
supply chain system of the Indian computer hardware industry may improve in the near future. Besides,
there is a necessity and ample scope for third party logistics service providers in this industry.
The decades old Indian computer hardware industry has travelled a long route before
losing its dominance in the Indian IT industry to its software cousin in the 1990s. Despite
losing the stream for growth, the hardware industry witnessed a sea change in its basic
structure in the last decade. From high import tariffs and sky level prices in early 1990s,
to down to earth prices and the dominance of multinational companies, the computer
hardware industry has witnessed a lot of changes. A new consumer segment—domestic
consumers, was added in the market. Personal computer prices became affordable to the
middle-income group. The unorganized sector and grey market players rose to the
occasion, banking on the low price platform and moved into the market share of the
organized sector players.
India’s emergence as a strong software player has also ensured the continuous growth
of its sister industry. With a boom in the Internet market and emergence of new concepts
like home offices, the growth rate of the hardware industry has gone up further.
It is an irony that the hardware industry, which helps the other sectors in building an
integrated supply chain management system, does not have a well-developed, value-added
supply chain system for its own distribution. This is mainly because of the presence of the
unorganized sector.
With the continuous fall in customs rates on hardware components and entry of
foreign investments into the hardware sector, there will be more competition in the
sector. This will force the companies to have an established supply chain in place.
Moreover, concepts like third party logistics are also catching up in India. In this situation,
there is a need to understand current practices in the supply chain of the Indian hardware
industry and the potential for outsourcing service providers in the supply chain. |
