Dealing with component supply shortages is the biggest challenge that first appeared in 2017, and still remains a prominent issue among electronics buyers. Not looking to subside anytime soon, the industry is particularly strained for standard passive components like resistors, transistors, diodes, multilayer ceramic capacitors, and even memory chips. As a result, many suppliers are quoting substantial lead times with increased prices.
Is the global technology boom behind today’s electronics component crisis?
While there may be other factors too, the recent drive in innovation and technology is the primary one behind these turbulent times. From smartwatches to Electric cars, we are seeing the adoption of technology in all spheres at an unprecedented rate. The smartphone industry that is constantly moving to provide a more advanced flagship model each year is driving demand of passive components even higher. And when you bring the evolving IoT ecosystem into the picture with 20 billion connected devices deployed by 2020, the market is certainly headed towards uncertain times for legacy components.
Involving some creative thought processes and smart sourcing strategies, companies can still get through these uncertain times. We have outlined a few for your convenience.
Evolving product design methodologies: Design teams need to adopt robust electronics designs with improved component selection. More emphasis should be given to selecting parts that will be available for the long term. To stay competitive, the design team sometimes might have to update designs as well.
Getting the entire supply chain involved with active collaboration between teams: To devise an effective sourcing strategy, all teams need to work collaboratively from design to prototyping, leading all the way to production and product delivery. Companies need to ensure that the entire supply chain is in communication with other teams keeping everyone on the same page.
Building Strong relationships: Relationship is key in today’s competitive market. Suppliers usually opt for an allocation method when supply is short of demand. Meaning, each customer would only get a share of what’s available from the supplier. Companies should ensure that they have a fruitful relationship with all suppliers so that when such conditions arise, they are in close contact to ensure receipt of components.
Looking for a strategic supplier: Companies should invest in building relationships with strategic suppliers rather than believing in one that buckles under the pressure of component shortages. We recommend partnering with suppliers that are committed to meet demands with strategies for all eventualities.
Finding a strong grey market vendor: Many companies have surplus parts that they sell to the grey market. Having a strong grey market vendor that can inspect, count, ensure MSL integrity can help businesses meet demand in times of component shortage. One such honest honest grey market vendor is Summon Electronics. They have all the tools that can help you play safe and benefit from the independent market.
Summon electronics is a hybrid distributor that excels at slicing cost, eliminating lead times and navigating the global market safely. Tired of banging your head against the wall on a supply chain issue? Reach out to our sourcing department email@example.com