June 22, 2018
Shortages are proving to be a thorn in the side for buyers
Electronics purchasers are employing a variety of tactics and strategies to manage current component shortages; By James Carbone
In an interview with Electronics Sourcing Magazine, Stephanie Martin, Sr. V.P. Global Supply Chain for Vexos, talks about a variety of tactics and strategies to manage current component shortages.
For the last eight months or so, many electronics buyers have been struggling with shortages of capacitors, resistors and discrete semiconductors because of strong demand and the lack of investment in new capacity by component manufacturers.
By most accounts, shortages and allocations that began in the third quarter of last year will continue through this year and perhaps into the second half of 2019. Some component manufacturers have long backlogs and are no longer accepting orders. As a result, buyers are hard-pressed to find parts needed for production.
Some are working closely with their component engineering departments trying to determine if there are readily available alternate parts that can be used in a design that could replace a shortage component. Other buyers are searching for little known second- or third-tier suppliers in China or elsewhere in Asia that may be manufacturing a needed part.
Most buyers are scouring all the links in the electronics supply chain and using all the sourcing tools that are at their disposal, including online search platforms such as ECIAauthorized.com, Findchips.com, netcomponents.com among others.
EMS provider Vexos also buys a lot of components from catalog distributors during shortages, according to Stephanie Martin, senior vice president global supply for Vexos, based in Markham, Ontario, Canada. She said she can buy thousands of parts from catalog houses noting that Vexos does high-mix, low-volume manufacturing and does not need millions of parts.
To help mitigate shortages, Vexos’ buyers also work with the EMS provider’s sales teams, urging them to provide as much visibility into how many systems Vexos will need to build.
Martin noted that lead times on every bill of material are out over 24 weeks and most of them have components that are over 40 weeks. “So, we are pushing back hard on our program managers, sales teams and going back to customers asking for their best guess forecast so we can get parts on order,” said Martin.