In the electronics component, industry shortages are often unpredictable and can happen for many different reasons. Most long-standing companies tend have a backup plan in place to address times of shortage. However, for companies without a plan for the inevitable, there are several factors to consider.
Shortages can arise if...
- There is a reduction in production due to increases in manufacturing costs, a material shortage or a downsizing of workforce.
- A new technology/component is introduced into the market, making the older versions either hard-to-find, end-of-life or obsolete.
- There are seasonal demands and/or inaccurate forecasting.
- A major OEM’s production line shuts down due to a natural disaster or unforeseen event.
- Manufacturers can try to procure components in the open market on their own through brokers or distributors, but this option can be extremely risky and costly.
- Manufacturers can also compile an approved vendor list should the primary source have long lead times or no product availability to fulfill their demand. However, dedicating internal resources to this process can be time-consuming and costly.
- Another option is to partner with a reputable independent distributor, like Converge, which has an established market intelligence network in place; reliable, trusted relationships with approved vendors in the open market; a team of expert commodity managers available 24/7; a global footprint; and a rigorous quality control and inspection process.
For more information on our shortage solutions, please contact us at firstname.lastname@example.org.