The ever-increasing demand for components adds ongoing pressure to the electronic supply chain. Accepting electronic supply chain disruptions as a long-term trend brings up big questions about the health of your strategies.
The vast reach of the Internet of Things is expanding the demand of electronic components: more connected vehicles; more 5G handsets and towers; and more connected medical devices. The prevailing trends in these industries will drive the need for electronic components not just today, but for years to come. The electronics industry is experiencing unprecedented shortages right now, demonstrating that electronic supply chain disruptions are a long-term challenge. Facing more frequent disruptions, the electronic supply chain must deal with the next shortage.
First up: understanding how your supply chain health checks out. Gartner recently defined supply chain health into two broad categories: “fit” and “fragile.” Gartner reports that, “the most fragile focus on short-term survival, while the fittest supply chain organizations see disruptions as inflection points to improve the value that supply chain provides to the business.” If this diagnostic resonates with you, read on for 3 of our ideas on how to stay “fit” and avoid the dangers of fragility.
1. Shrink your reaction time
Healthy supply chains are capable of responding to change. A great example of this is developing a quick reaction to shortage challenges rather than waiting until the problem builds. The best way to sharpen your reaction time? Access to real-time market information. A broad supplier network that you can leverage to action on this information is critical, but action starts with information.
Real-time information holds even more impact when it is put into context. Seek an information source with longevity and credibility, but also a broad base of similar customers. That sort of insight puts you beyond the sphere of short-term insights and into longer-term planning — a sign of a fit supply chain.
2. Get proactive about electronic supply chain disruptions
Taking a proactive stance on electronic supply chain disruptions doesn’t require a complete overhaul of your purchasing strategy. You can start to shift into a proactive mindset through incremental decisions. Despite maintaining a lean inventory, opportunities to buy in the shortage market might present a chance to bridge a gap in future supply needs. Making these strategic decisions does, however, require reliable market information.
Working closely with OEMs to address challenges at the manufacturing stage and keep in step with technology development is ideal — but sometimes that kind of coordination is simply not possible. When circumstances require a broader sweep, forging partnerships in electronic components distribution can keep the line going. Taking a proactive approach means forging relationships with a variety of partners.
3. Supply chain safeguards
A fragile supply chain is a vulnerable one. Staying fit means staying on top of quality control in the shortage market. Seeking out components vetted with exceptional quality control adds to your supply chain’s fitness. Electronic distributors should offer you the chance to audit their safety process. This level of transparency gives a direct view into the processes used to ensure safety and quality.
While ever-increasing demand for components adds ongoing pressure to the electronic supply chain, strategies to stay nimble, proactive, and safe will ensure supply chain health.