In combating volatile supply shortages, some manufacturers now find themselves facing a different challenge: surplus electronic components. Here’s how OEMs can take back control of their inventory and better plan for future supply shortages.
Remember the surge in consumer panic buying during the pandemic? Did you do it again with your electronic components and are now hoping you haven’t wasted money? Surplus electronic components can be dealt with — even turned into unforeseen business benefits — and there are proactive steps companies can take to limit excess stock in the future.
Pivot from mistake to opportunity: reframe surplus electronic components as inventory solutions
The first step is a mind-shift to “How can we use this to our advantage?” Panic hats come off, and brainstorming hats come on. Resilience is a powerful tool, and those who learn to leverage it first reap its most valuable rewards.
Here are some ideas for how to reframe surplus electronic components as inventory solutions:
- Upsell large orders on backlog to keep surplus electronic components rolling out consistently.
- Work with a diverse network of suppliers and distributors to find new customers who have a particular need for your surplus electronic components.
- Strengthen relationships with suppliers and global sourcing partners so they can better understand your needs and find creative ways to utilize surplus electronic components.
Reduce incoming materials with strategic ordering
Backup safety stock is a critical step in ensuring a sufficient supply of electronic components that may be difficult to source in the future, particularly for obsolescent electronic components. The key is not to go overboard and limit procurement to short-term finished goods production.
First, determine which of your electronic components may become obsolete in the future. Every product should include a lifecycle plan and timeline that articulates when to start stockpiling backup components, when to look for supplementary parts, and — eventually —a redesign without the component.
Next, focus on the electronic components that are actively utilized in manufacturing projects. These are the ones to hone in on for immediate procurement — but don’t stop there. Get even more granular by honing in on which electronic components to prioritize ordering, and to what extent, by analyzing data that integrates information based on your current stock, orders, and market trends. And that brings us to real-time data.
Start driving inventory decisions with data from real-time systems
Those who work with advanced technology shouldn’t shy away from it. The uncertainty of evolving consumer and supplier needs both during and after the pandemic has resulted in a massive adoption of big data analytics to help better predict trends, manage operations, and significantly reduce costs. In 2021, the Global Big Data Analytics in Semiconductor and Electronics market was valued at $18.7 billion. This is expected to boom to $47.2 billion by 2031 with a CAGR of 9.9% from 2022 to 2031.
When it comes to surplus electronic components, real-time data collection systems fuel analytics that can help set accurate planning parameters like lead time, safety stock levels, and minimum order quantities. Real-time data can be used with the right software to simulate the impact of changes in inventory levels based on both internal and external factors.
Working with an independent distributor, like A2 Global, opens up channels to maximize inventory value recovery and identify commonalities across all vertical markets to effectively sell excess electronic components to distributor global customer networks.
Turn surplus electronic components into strategic opportunities
Surplus electronic components are manageable but also avoidable, even during volatile times with proactive, strategic planning. From a management perspective, surplus electronic components should be reframed as opportunities to recoup value and deepen relationships with new and potential customers, suppliers, global sourcing partners, and distributors.
For a more proactive approach, capitalize on the data offered by independent distributors with modern systems that integrate inventory planning with real-time data analytics. Data-driven strategies help manufacturers pinpoint exactly how much of which electronic components to stock up on and when — and avoid costly surplus electronic components in the future.
Read more:
● Holding Onto Safety Stock? Put Your Excess Electronic Inventory to Work