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Apple supplier Jabil moves into supply chain software

Written by: Supply Chain Online
Published on: 27 Oct 2016
Category:

JABIL NEWS

Apple supplier Jabil moves into supply chain software

Electronics manufacturer Jabil Circuit Inc. has announced that it is entering the supply chain software business.

According to a report in The Wall Street Journal, the Florida-based company, which serves as a manufacturer for Apple, Cisco Systems, General Electric Co. and other businesses, is to join a number of manufacturers making similar moves as sales of traditional electronic products slow.

Don Hnatyshin, Chief Supply Chain and Procurement Officer for Jabil, said that the company’s internally developed supply chain management software will be made available from the first quarter of next year. He said that the software could go on to generate up to $100 million (£82 million) per year.

Jabil already uses the software internally to monitor both its suppliers and its customers’ suppliers. As the report states, this allows the company to “react more quickly to potential disruptions in their supply chains from natural disasters and other factors.”

As an example, in April, the software helped identify a supplier that had lost power due to an earthquake striking Japan’s Kyushu Island. An alternative supplier with sufficient stock to fulfil the customer’s needs was sourced from outside the region within hours, a process that would have taken weeks to complete manually.

According to the report, Jabil’s entry into the software-as-a-service (SaaS) marketplace comes amidst a growing demand for technology that helps companies manage increasingly fast-moving global supply chains. The supply chain management software market grew by 11 per cent to reach $11.1 billion (£9.1 billion) last year. According to research company Gartner, this market is set to grow to $17.6 billion (£14.5 billion) by 2020.

Stifel Nicolaus & Co. analyst Matthew Sheerin said: “This really goes in line with a trend we’re seeing with [electronics manufacturing services] companies in general, which is to move more into services, design, engineering and value-add.”