By Rob Moore, Sales Director at Electronics Manufacturing Solutions
The global semi-conductor shortage has had a knock-on effect it’s had on component lead times worldwide. Unfortunately, this shortage of electronic components is continuing to ricochet throughout all industries.
While there’s no way around the shortage, working with a reliable electronics manufacturer with a trusted supply chain is paramount to ensure you don’t get let down.
THE SHORTAGE CONTINUES…
Any supplier, manufacturer or end-user looking to order electronic parts over the past 12 months have been faced with enormous delays, requiring many companies to turn to alternative options or re-design the project in its entirety.
Parts available in their thousands are selling out in under a week, with a 36-week lead time that could change to 52 weeks in a window of just a few days. Requests for quotations (RFQ) are also seeing considerable delays while suppliers have to wait for responses from manufacturers before they can commit to a lead time. But as the landscape is changing with such speed and erraticism, many suppliers are finding themselves back at square one in a matter of days.
It’s impossible to offer a guide on how long each kind of component is taking to arrive as everything is changing so rapidly and unpredictably.
CHOOSING A REPUTABLE PARTNER
When choosing an electronic manufacturer partner, it’s vital to establish a relationship based on trust. This relationship should be based on more than just whether they can provide the right product for a price you’re happy with.
From the beginning, it should be a priority to ensure that your values and goals are aligned with those of your electronics manufacturing services (EMS) provider. You should be working together to achieve clear goals with measurable progress parameters.
The core of any successful relationship — professional or otherwise — is communication. Maintaining a trusted relationship with your EMS provider requires clear and consistent communication to guarantee you stay on track and work through any bottlenecks that arise.
Any reputable EMS provider will have a bank of trusted parts suppliers at their disposal and will be able to identify the best supplier for your project’s needs. Additionally, they’ll be able to demonstrate that they vet their suppliers regularly based on quality, delivery, cost and much more.
And, of course, the quality of your partner’s work is vital. Particularly in the global electronics manufacturing marketplace, quality control is paramount. The right EMS provider will have stringent quality protocols in place and won’t hesitate to inform you of them.
You should also have the option to visit your chosen EMS provider’s manufacturing floor to see their equipment in operation and speak with the technicians behind the work. Any EMS provider should be happy to allow you to come and see where the magic happens!
SUPPORTING OUR CUSTOMERS
We’re also here to offer some advice to our clients about the importance of a trusted supply chain. While there are such shortages in the industry, we advise that if your supplier is offering you something that sounds too good to be true, it probably is.
Over the past few months, several of EMS’ customers have asked us to purchase from particular websites or companies that claim to have stock of specific components that are unavailable anywhere else. However, we’ve built a portfolio of trusted contacts within the manufacturing community. We’ve relied on these companies for years and will only purchase from suppliers offering full traceability and date codes.
WHAT CAN WE EXPECT IN THE FUTURE?
It’s expected that the semiconductor chip shortage will extend into 2022 at least, and it’ll take a few years for the issue of foundry capacity to be addressed. However, there’s likely to be some reduction in severity as manufacturing capacity begins to open later in the year.
In response to the crisis, electronic manufacturers have had to adopt a new approach to supply, becoming more strategic with planning capacity and developing trusted relationships with their supply chains.
To cope with dramatic changes in demand, the world needs a more diverse supply chain. If electronics manufacturers can diversify their supply chain away from overcrowded locations and bring it closer to home, demand is likely to level out.
If any sector is keen to see the supply chain recover, it’s the automotive industry. According to Seraph Consulting, the shortage has cost the sector $450 billion in global sales to date, and many US car manufacturers have had to cut production drastically.
When the manufacturing capacity is spread over a broader geographic footprint, the risk to manufacturers is reduced. Sourcing locally also reduces the risk of operating on an international scale, such as shipping delays and border tariffs.
While the shortage has undoubtedly exposed the fragility of the global manufacturing landscape, there is a general sense of optimism that manufacturing will bounce back stronger with a more nuanced understanding of supply.
Implementing a consistent plan and forecasting against various ‘what-if’ scenarios will be vital for manufacturers to stay on the top of their game going forward, particularly as some reports suggest that the issues will continue throughout 2022 and 2023.
As such, we urge our customers to get ahead of the game by putting demand in place wherever possible to reduce the disruption. With the market so volatile and manufacturers making last-minute decisions and changes, it’s a huge challenge to plan for the unexpected. However, having orders already in the pipeline will help immensely.