Whilst we can’t help the rate at which components are being produced, there are steps that OEMs can take to reduce the impact felt by these long lead times, especially in a time of such uncertainty.
When dealing with long component lead times, you need a supplier who puts the customer experience first. They can be proactive in helping you find what you need, as well as maintaining good levels of communication when updating you on the situation with certain components.
If you’re working with a supplier who doesn’t provide a high level of customer service, you will likely find the situation much harder to manage. You need a supplier who is active, not passive.
To properly utilise sales data and create forecasts, you need to work with your suppliers. Your sales data will show you the times of year when you are busiest, what products you sell the most of, and when. Using this information, you can arrange with your suppliers ahead of time when you will need specific parts and components the most, and in what volume.
Your suppliers can then prepare and store your components well in advance, meaning you won’t come up short at the most crucial times for your business.
The past year has seen unprecedented challenges to all industries that no one could have expected, but it has also resulted in many companies changing up the way they do business in order to survive. Whilst we can’t expect if or when the next COVID-scale disruption will happen, manufacturers can work towards a business model that better responds to market changes.
You can look for flexible alternatives for both your components and your suppliers. If there is a market shortage of a particular component you use in one of your products, see if there are changes that can be made to the design that would allow you to use an alternative component that is available. When it comes to suppliers, commit to those that you can form a strong relationship with, as this will ensure you get a better level of service in difficult times.
Constantly shopping around for the suppliers that will get you the best deal on individual components may seem to be the most economic way to operate. However, it may actually end up costing you more in the long run. It is much more difficult to manage multiple suppliers, especially when it comes to meeting agreed deadlines or keeping contractual obligations. Plus, if a certain supplier is focused only on price rather than putting the customer first, they will not offer the best solutions in situations such as navigating lengthy lead times.
It can be more practical to streamline your supply chain and work with a selection of reliable and proactive suppliers, especially if you’re looking to reduce lead times. You should look at which components you get from each supplier and see what can be consolidated. Having said that, you should still keep trusted backup suppliers for all your components, just in case of unforeseen problems that may befall your main suppliers.
Lengthy lead times are undoubtedly stressful. The longer manufacturers have to wait for components, the longer end customers have to wait for the finished product, which can have a negative effect on reputation. However, we hope that we can return to something like normality soon, and taking the necessary steps to navigate lengthy lead times during this period will be incredibly beneficial long into the future.
Author details: Jeff Brind is the Chief Information Officer at Easby Electronics