Not even the best of supply chain managers can completely insulate their businesses from the impact of the current world shortage of electronic components. The simple truth is that there are not enough components to go round which means that someone will have to go without. More widely, extended lead times, missed deliveries and rising prices are inevitable. However, it is possible to take steps to minimise the problems created by the shortages.
Ramy Karoun, VP of Supply Chain for Asteelflash, offers six suggestions:
- Find the components
- Place firm orders
- Program orders
- Manage priorities
- Minimise mistakes
- Be respectful
1. Find the components
It may sound obvious, but the first priority in these difficult times is to find a supplier that has the components you need. Only then can negotiations begin over delivery times and prices. Of course, finding a supplier can be very time consuming, but Asteelflash offers a solution: we have a team of expert buyers that work full time with suppliers around the world to source hard-to-find components. We do the hard work of component location, so that our customers don’t have to.
2. Place firm orders
In the present situation, there’s no place for tentative or conditional ordering. Orders need to be placed well in advance of requirements – up to a year, if possible – and there will be no cancellation options. This may seem restrictive, and it certainly requires careful planning, but it’s the only way to have any reasonable certainty of supply.
3. Program orders
It often helps both the component supplier and the user to have deliveries programmed over a period of time, rather than scheduling a single large shipment. Suppliers may well be more willing to negotiate over such an arrangement, especially if it is backed by data about regular ordering and deliveries in the past.
4. Manage priorities
It’s unlikely that you will be able to obtain all of the components you would like to have all of the time. It is therefore important to analyse requirements carefully and identify priorities so that resources and effort can be concentrated on meeting these priorities.
5. Minimise mistakes
Check and double check even more carefully than usual, especially when placing component orders. Mistakes are all too easy to make but, in the present climate, they may be very costly or even impossible to rectify. Give particular attention to quantities, delivery dates and part numbers.
6. Be respectful
These are difficult times for everyone associated with the electronics sector and it’s easy to understand why tempers may become a little frayed. But acting in a disrespectful way toward a supplier is unlikely to encourage their support and may damage a relationship that could be useful in the future.
There’s no “magic aspirin” to cure component shortage headaches but following the guidance given here will help to make those headaches at least a little less painful, as will choosing Asteelflash as your EMS partner. In conjunction with USI, we have the expertise and global presence needed to develop and deliver the best possible component shortage solutions for our customers. So why not book a meeting with one of our experts to find out more about dealing with the component supply crisis?