{"id":20416,"date":"2022-09-08T09:41:57","date_gmt":"2022-09-08T13:41:57","guid":{"rendered":"https:\/\/a2globalelectronics.com\/?p=20416"},"modified":"2022-09-15T16:09:07","modified_gmt":"2022-09-15T20:09:07","slug":"crisis-on-the-horizon-global-energy-crunch-and-the-electronic-components-supply-chain","status":"publish","type":"post","link":"https:\/\/a2globalelectronics.com\/ja\/shortage-mitigation\/crisis-on-the-horizon-global-energy-crunch-and-the-electronic-components-supply-chain\/","title":{"rendered":"Crisis on the Horizon? Global Energy Crunch and the Electronic Components Supply Chain"},"content":{"rendered":"\n[et_pb_section fb_built=”1″ _builder_version=”4.16.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” module_alignment=”center” custom_padding=”|||0px||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.16.0″ _module_preset=”default” custom_padding=”|||1px||” inline_fonts=”Arial,Verdana” global_colors_info=”{}”]

We offer 3 potential supply chain strategies for navigating the global energy crisis.<\/strong><\/span><\/h2>\n

In the post-COVID world, economies around the globe have faced unprecedented concerns. This is especially true for the global energy economy, which is vulnerable to fluctuations in international politics and events. The majority of global economies face deepening energy crises, many of which are exacerbated by issues in the electronic components supply chain.<\/span><\/p>\n

Look no further than the events in China last fall: a perfect storm of interconnected factors led to a <\/span>multi-month crisis<\/span><\/a>. As temperatures dropped, oil and gas prices reached all-time highs. This led to emergency power rationing, exposing both homes and factories to sub-zero temperatures. This fall, we face a new energy crisis stemming from the <\/span>war in Ukraine<\/span><\/a>, affecting communities across the ocean who are feeling the impact.<\/span><\/p>\n

The effects of international conflict<\/b><\/span><\/h3>\n

The current turmoil in the global energy system is a <\/span>consequence of Russia\u2019s invasion of Ukraine<\/span><\/a> last February. As Russia is the world\u2019s <\/span>largest oil and natural gas exporter<\/span><\/a>, prices are soaring. Governments are struggling to <\/span>adapt to the new costs<\/span><\/a> for everything from heating homes to powering industry. This increases the pressure from other emerging global issues, such as <\/span>Europe\u2019s summer heat wave<\/span><\/a>. Had the global energy economy been stable, we would have avoided the aftermath of this change in weather.<\/span><\/p>\n

Shortage mitigation<\/b><\/h3>\n

With this windfall of volatile events, it is paramount that we invest in <\/span>shortage mitigation<\/span><\/a>. Although the global energy crisis impacts every organization, there are choice responses to limit negative results. This can take a multitude of forms: from shifting sourcing strategies, keeping up with global trade policies, and bolstering data management.<\/span><\/p>\n

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<\/p>[\/et_pb_text][et_pb_video src=”https:\/\/youtu.be\/HeQV8FDbmiU” _builder_version=”4.18.0″ _module_preset=”default” width=”59.9%” min_height=”284.6px” custom_margin=”|||60px||” custom_padding=”|1px|0px|0px||” global_colors_info=”{}”][\/et_pb_video][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.18.0″ _module_preset=”default” inline_fonts=”Arial” global_colors_info=”{}”]

3 potential supply chain strategies for navigating the energy crises<\/b><\/h3>\n

1. Global sourcing<\/b><\/h4>\n

One of the best ways to mitigate shortages is to broaden sourcing as much as possible. Although global procurement is often associated with a decrease in quality, the opposite is actually true; an increase of sourcing also allows for an increase in <\/span>quality<\/span><\/a>. Additionally, <\/span>global sourcing<\/span><\/a> allows you to <\/span>protect your organization<\/span><\/a> from supply chain risks. In short, this method allows you to reduce costs, improve your organizational capacity, and raise the quality of your products, increasing your resiliency through <\/span>strategy diversification<\/span><\/a>.\u00a0<\/span><\/p>\n

2. Russian risk-assessment<\/b><\/h4>\n

An especially critical supply management strategy, given global political instability, is active risk-assessment with any Russian foreign trade. While the United States does not have a <\/span>full trade embargo in place<\/span><\/a>, regulations and policies exist to protect global and domestic trade. That\u2019s why it\u2019s important to keep up with federal departments, such as the U.S. State Department\u2019s International Traffic in Arms Regulations (<\/span>ITAR<\/span><\/a>) and the U.S. Commerce Department\u2019s Export Administration Regulations (<\/span>EAR<\/span><\/a>).\u00a0<\/span><\/p>\n

These departments list the currently prohibited exports and imports as well as provide guidance for global commerce to help organizations stay informed. For example: as of June 2022, the U.S. Department of Commerce\u2019s Bureau of Industry and Security (<\/span>BIS<\/span><\/a>) changed <\/span>regulations<\/span><\/a> to require a new license for any products that could be seized by Russia. By staying informed on these policies, you can reduce any negative impact in both the short and long term.<\/span><\/p>\n

3. Master data Management<\/b><\/h4>\n

One final method to mitigate the instability of the global supply chain is through master data management (MDM). A strategy <\/span>defined by Gartner<\/span><\/a>, MDM is a way of organizing data to streamline consistency, accountability, and stewardship across any enterprise\u2019s shared master data assets. This allows for maximum flexibility across different organizations. For example, one organization could employ MDM to improve customer satisfaction through data-driven insights, while another uses it to help on the supply side to <\/span>create purchasing negotiation leverage<\/span><\/a>.\u00a0<\/span><\/p>\n

As we\u2019ve learned through the supply chain crisis, organizations must pursue innovative shortage mitigation strategies to adapt. During this time of particular instability, multiple events \u2014 in this case, those related to energy raw materials and production \u2014 can rock an already volatile global economy and your supply chain with it. Preparation is key, as always, so we\u2019re following the energy crisis closely and helping our clients keep their lines running, regardless of what is happening around the globe.<\/span><\/p>\n

Read more<\/b><\/p>\n