Full-Stack ICT Supply Chain Ownership Becoming a Thing of the Past

Michal Staněk

Companies such as Apple and Tesla have popularised the idea of owning every aspect of their supply chain. This “full-stack” approach has become the ideal for many companies who strive for complete control of their entire product. However, Apple and Tesla both have one major downside in common: massively expensive products that price them out of the reach of many people.

It begs the question, is owning every single aspect of your company’s supply chain necessary for exerting maximum control over your product? Is there any other way to achieve outstanding levels of quality control, while retaining some degree of agility and cost-effectiveness for clients?

It turns out there is. As a matter of fact, not owning the entire supply chain also brings numerous benefits to companies and their clients. In the information and communications technology (ICT) service provision environment, a shift away from full-stack models is revolutionising the industry and catapulting new players to the forefront.

You Don’t Have to Own It to Manage It

Many companies are still clinging to the dream of full-stack ownership. They find it appealing to own a factory that makes all their hardware, which they then ship via their own distribution channels, to their own warehouses, so that it can be installed by engineers whom they employ. They believe that all the excessive overhead they will be paying will pay for itself in the increase in quality they’re able to provide.

But let’s consider the alternative. Let’s say you source the best hardware from the most cutting-edge leading technology vendors. You establish mutually beneficial relationships with them and earn their trust, resulting in advantageous purchasing and procurement conditions. Instead of physically owning shipping services, you employ a team of specialists who are dedicated to evaluating and leveraging whatever delivery channels are most optimal for a given country or region. Instead of purchasing or building warehouses everywhere you might possibly need one, you direct your efforts toward sourcing the best local storage facilities available. And instead of employing thousands of field engineers around the globe, you focus your attention on systematically evaluating the quality of local resource providers and building a network of the most consistently reliable engineers.

Reduce Overhead Without Sacrificing Service Quality

Already, we’ve eliminated a huge amount of unnecessary overhead. However, many companies might be worry that outsourcing so much of the supply chain results in a loss of control and a sacrifice in quality. If implemented correctly, this type of model doesn’t sacrifice anything. Starting with the technology vendors, focusing on establishing long-term relationships with leading manufacturers and creating fine-tuned vendor onboarding procedures gives a degree of flexibility which we would totally lack in a full-stack model. The costs are much lower for both the company and their clients, and they always have access to the best technologies, even as new ones emerge. Vendors who fail to keep up with the times or fall out of favour with clients or the company get pushed to the back of the line, and up-and-coming manufacturers can be quickly onboarded to start providing their products.

With delivery channels, the benefits become even more apparent. For remote and hard-to-access regions, it’s almost inconceivable if not downright impossible to …