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Supply chain obstacles in the fibre industry

supplychain

Supply chain obstacles in the fibre industry

Only 45 countries in the world have average fixed broadband speeds of over 100mbps. This is what we consider a “fast” internet speed. In this technology driven age, lifestyles, businesses and the education sector are at a notable disadvantage without reliable and ubiquitous connectivity. This has seen the demand for deployments of the latest and most up-to-date broadband technology grow exponentially in many sectors, such as telecoms, transportation and construction.

Due to its greater bandwidth and reliability – compared to the likes of DSL and copper cabling – fibre optic technology is the preferred connectivity option for many. It was reported that FTTH/B dominated the global fixed broadband subscriptions with a share of 66.7% in the first quarter of 2023. The pressure being placed on broadband service providers and installers to create new infrastructure is being felt across the supply chain.

Logistical constraints

With fibre deployments ramping up and ambitious goals being outlined, the call for more materials and equipment is also increasing. The likes of cable manufacturers and material suppliers across the supply chain need to act quickly to augment the speed of fibre deployments across the world. But to do this, the supply chain must adopt stricter logistic and equipment management policies.

As demand grows, so does the competition. Fiber optic manufacturers are competing for a limited supply of glass, cladding, connectors and a range of plastics. Without the right materials to hand, the manufacturing of fibre halts and creates huge downstream problems and bottlenecks in its procurement, testing and deployment stages.

To add to these potential issues, there is a shortage of skilled labour in the telecoms industry. For example, a lack of trained and skilled workers throughout the supply chain can lengthen the time taken to fulfil an order, and a lack of trained installers directly impacts the deployment speeds of the fibre itself.

Green concerns

Not only is there pressure on the entire supply chain to produce equipment on time and in bulk for fibre roll outs, but there are also calls for this to be produced more sustainably. Although, fibre optic is already renowned for being one of the most sustainable telecommunication technologies, using up to 95% less power than copper-based systems, sustainable practices are cutting even deeper.

Consumer awareness and governmental pressures have pushed the importance of greater transparency on broadband service providers regarding the sustainability of their products. This has also been identified as a newfound way to unlock greater revenue growth. A recent Cisco report highlighted that sustainability is now a key driver of consumer choice with 77% of respondents willing to pay more for broadband with a lower carbon footprint.

To capitalise on this, broadband service providers are beginning to roll out initiatives to decrease their overall greenhouse emissions. They hope this greener stance will draw in more customers. They have adopted the likes of Life Cycle Analysis concepts which consider all the life stages of a product; the extraction of the raw materials, the manufacture of the product, the transportation involved and its end of life.

While adopting methods to speed up the production of equipment, companies towards the bottom of the supply chain must also look to mirror the practices of their potential customers to be considered.

Taking action with local collaboration

Localising collaboration can tackle many obstacles that are experienced within the supply chain. By sourcing suppliers and materials locally, transportation and storage are significantly reduced, ultimately reducing companies’ carbon emissions and energy usage. It can also create supply chain confidence with a greater sense of trust and control.

Local suppliers are usually more reactive compared to suppliers located further afield. It is much simpler and quicker for them to organize deliveries within a city rather than transporting the goods around the world. Working in the same time zone also ensures faster deliveries and production, enabling a quicker resolution of the problems they face.

Prysmian Group’s definition of "local" is all those suppliers with operational headquarters in the same country as the legal entities of Prysmian. In EMEA, Prysmian purchased 69% of its supplies locally; in APAC, 84%; in North America 100%; and in LATAM 95%.

To leverage the full benefits of these local collaborations and keep the supply chain moving, companies across the supply chain need to evolve their operations to synchronise with their customers. By “orchestrating” the supply chain, it has been estimated that there is a 15-20% increase in productivity in supply chain planning and a 5-10% reduction in inventory carrying and logistics costs.

Prysmian’s offering of fibre optic solutions is designed to cut emissions, boost energy-efficiency, and reduce consumption across networks. Its range of products is efficient, cost-effective and future-proof, thanks to circular production methods, recycled materials and the reduction of energy costs across the supply chain.

For example, Sirocco microduct cables have a smaller diameter than other cables on the market, making it possible to install more fibres within a limited space. Their reduced diameter also enables the use of smaller ducts for new installations, meaning less civil works and smaller trenches. This contributes to make installation faster and more cost effective.

Smaller ducts lead to a direct reduction in CO₂ footprint in the design process. This also has a knock-on effect on the rest of the supply chain: it is possible to fit more cables per drum and fewer drums per shipment, significantly reducing carbon emissions in transport. In addition, more cable and tubes fit on a reel, which reduces the cutting losses and the number of wooden reels used by up to 70%. In summary, these design features mean a reduced environmental footprint, as well as reduced costs for customers.

Prysmian bring both a global presence and local expertise to the entire supply chain, allowing the company to deliver cost-efficiency, without compromising on the world-leading quality. The Group has introduced operational strategies such as its ‘Fast Forward Operations’ approach. This aims to make planning and production more reliable in terms of volume and timing with strict monitoring of stock levels.

Greater sustainability and local collaboration will not only lead to a greener planet and reduced customer churn, but it also promises improved quality productivity across the entire supply chain.