News | May 3, 1999

Dataquest Forecasts Vendor Build to Order and Contract Manufacturing Will be the Dominant Future PC Supply Chain Models

Vendor factory build to order and contract manufacturing, not channel assembly, will be the dominant PC supply chain models in the next five years, according to San Jose, CA-based Dataquest Inc., a unit of Gartner Group Inc.

In a series of Perspectives entitled "PC Supply Chain Model Forecast 1997-2002," Dataquest forecasts supply chain evolution for the United States, Western Europe and Asia/Pacific markets.

"We expect to see fundamental shifts in where and how PCs are built, and which companies build them," says Charles Smulders, senior industry analyst for Dataquest's Distribution Channels Worldwide program. "Those changes will effect every business involved in the supply chain from component supplier to the end user. Choosing the correct supply chain strategy will be a prerequisite to success for vendors."

Despite the significant industry and media attention brand channel assembly has received, only a limited set of circumstances favor it as the lowest cost supply chain to the end user.

"We believe vendor factory build to order and contract manufacturing to be the most prevalent supply chain models over the next five years," Smulders says.

In a series of three Perspectives, Dataquest defines and predicts the growth of the five supply chain models by region. Those models are: vendor build to order, vendor build to stock, brand channel assembly, no name channel assembly, and contract manufacturing. Unit shipment forecasts are provided for the total, professional, and home markets, segmented by deskbound (desktop and deskside) and mobiles formats.

These reports are produced by Dataquest's Distribution Channels Worldwide program. This program provides clients with tactical and strategic insight into the many aspects of distribution channel trends on a worldwide basis.