Overcoming the 5 supply chain challenges of the Industrial and Public Displays market

Many businesses emerged from the pandemic, a period that created complex challenges to face even more uncertainty. Disruption caused by high inflation rates in some countries and the rising cost of energy have affected organizations, including those in the displays market.
 
One segment of the industry, industrial and public displays, has shown resilience compared to other areas, yet it still faces significant barriers to achieving success. In this analysis, Omdia Principal Analyst TzuYu Huang explores five supply chain challenges that are facing industrial and public displays industry.
 
High level of customization
 
Industrial and public displays are non-consumer products. They’re used in a wide range of devices, from excavators to aircraft cockpits, coffee machines to fish finders, and point-of-sale devices. The diversity of the applications means they must be highly customized products.

The specifications for each display will vary depending on their use. In aviation, for example, panels must have a high contrast ratio, achieve a certain level of brightness (minimum 1000 nits), be salt, fog and UV resistant, and be able to operate in a wide range of temperatures. 

The cost of the displays will differ as well. A 32” display that’s deployed in an operating theatre, for example, could cost 13 times as much as the same sized display that’s used for indoor signage.
 
Complicated business models
 
There are also more than 100 brands and original equipment manufacturers (OEMs) worldwide that all have their own requirements. Panel makers that provide the displays that are used in point-of-sale devices in a store, for example, may have to work closely with brands, OEMs, touch solution makers, and module houses to ensure the product meets consumers’ expectations.

Smaller shipment quantities 
 
The high level of customization may limit the demand for each display. A panel maker may only ship 20,000 to 30,000 products a year for each application. This can create challenges in production as some fabrication plants will have minimum order quantities and panel makers could end up with high inventory levels if they produce more devices than required.
 
Lengthy certification processes
 
The smaller shipment quantities can present other challenges – they can highlight any problems with the quality of the display. Panel makers must meet defective parts per million (DPPM) metrics, achieving 2,000 DPPM or lower. They must also meet application-specific requirements. In sectors such as gambling, every slot machine must pass the Gaming Laboratories International qualification to ensure fairness.
 
The certification process for an application typically spans one to two years, involving a rigorous testing phase that can be both demanding and tailored to the unique requirements of the situation. No changes to a product or its components are allowed after the requirements for each industry have been met, and panel makers must be able to guarantee long-term supply. 
 
Need to demonstrate commitment
 
It may be difficult for panel makers that are new to the market to demonstrate their ability to serve the market in the longer term. Trust plays a pivotal role in the industrial and public displays sector, and it is common for brands, or OEMs, taking inspiration from the aviation industry, to seek stable supply commitments lasting five or even 10 years.
 
Overcoming the challenges
 
More than 20 panel makers currently operate in the industrial and public display market but companies with experience in consumer electronics and PC segments may consider entering the sector to diversify their portfolio. 
 
There’s stable demand for the displays after the relevant specifications and standards have been met and the products can’t easily be replaced because of the challenges associated with certification. There may also be opportunities to supply other customers with the same sub-application.
 
However, panel makers that are new to the market will have to set out how they plan to manage their production line, meet long-term demand, and maintain prices and quality. 
 
To take advantage of the opportunities that exist, established suppliers could also optimize their resources and production lines and diversify their product portfolio. For example, by developing different panel sizes and specifications:

• 43-/49-/50-/55-inch curved display with 0.2mm thickness for slot machine displays
• 15-/15.6-inch for standalone point-of-sale displays
• 7-/10.1-/10.4-/12.1-inch for human machine interface displays

Both new and experienced panel makers in this market must meet the long-term supply and quality requirements. But they could also take the chance to lead the move towards more sustainable products. For example, by minimizing power consumption, using more recycled materials, and developing more efficient processes. 
 
Omdia’s Industrial and Public Display & OEM Intelligence Service analyzes the challenges and opportunities in the market. For more information please contact us, read our e-book, or visit our website.