The electronics component shortage has created a difficult market for manufacturers and companies alike. Unprepared businesses are struggling to receive the components they need to keep their production flow efficient and available to meet customer demand. But just because there’s a shortage doesn’t mean you can’t get ahead of the game – and the process starts by working together with your electronic contract manufacturing partner.
Understand the Electronics Component Shortage
Before you can start taking steps to combat the component shortage, you need to know what factors are causing it and what the scope of global effects are. Only then can you start to make smart and informed decisions for the benefit of your business. Read our article on everything to know about the electronics component shortage.
Having Cash Flow to Buy in Advance
Buying in advance can solve a lot of shortage problems down the line. In the current market, some components have lead times over 20 weeks – you don’t want to get down to the bottom of your stock and then have to wait for months to get the parts you need. Make plans to buy appropriately in advance and be sure your CM has the cash flow to accomplish just that.
Connections mean a lot in business, and the value of good relationships is even more defined in the current market. With many manufacturers prioritizing their larger customers over smaller ones, working with a trustworthy CM that you have a good relationship with will help ensure you get what you need in time. Your CM should also have strong relationships with distributors and component manufacturers and leverage those relationships to form agreements about the allocation of regularly used components.
Understanding Lead Times
With some lead times stretching up to 50 weeks, it’s important to know just what sort of delays you’ll be facing. Your CM should understand the potential lead times for orders and let customers know about their options. When your CM is transparent, you can understand the right time to place orders to make sure you get the components you need on time.
Asking for Forecasts
One of the smartest strategies you can develop at any time is to know how to build a forecast of your component needs, but it’s even more important when facing component shortages. Your CM should ask for your forecast so that they can help with meeting your projected demand. If you don’t have a complete forecast, your CM should help you develop one so that business can run smoothly for both of you.
Ordering in Advance
You want to be able to order what you need in an advance, but you don’t want to go so far that you overorder and create more shortage than already exists. At any time, you may be fortunate enough to order what you need in advance without causing any demand misunderstandings. Your CM can help you identify which components you can order ahead of time and which ones you should wait on.
Keep Your Best Interest In Mind
With many manufacturers starting to prioritize larger customers, small and medium-sized businesses are struggling to receive the products they need. You do not want to be stuck in such a situation. Your CM should always have your best interests in mind, regardless of whether you provide the most business or the least. Any CM who doesn’t do that much has a strong chance of causing you more problems down the line.
While there are components that you simply can’t substitute for an alternative, there are many that you can with the help of your CM. When your CM has a product go out of stock or faces an extended lead-time, they should be able to recommend options. With this sort of communication, you can find the components you need without struggling.
Silicon Expert provides a great resource for cross-referencing components that can help you quickly find alternatives. Working with a component engineer will also make this process simpler and guarantee the accuracy of the potential replacement component. The faster you can find a substitute for a delayed component, the faster you can get your own production schedule back on track.
Even with thorough preparation, working through the electronic component shortage will be difficult. However, it is possible to put yourself in a position where you can manage it in a more efficient way with a solid partnership and open communication with your CM.