Electronic Component Shortages Obstruct Manufacturing Supply Chain

Various components

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The electronic manufacturing supply chain is currently experiencing a severe shortage of many finished electronic components. According to iSuppli, manufacturers in the electronics sector have had a challenging past few months. Many of the raw materials that have been in short supply earlier in the year are now becoming available to produce many of the parts currently on allocation. However, manufacturers’ are finding they’re not in a position to be able to finish manufacturing the parts due to a variety of factors which include: increasing raw material costs, employment increases and increased transportation expenses.

Thomas Dinges, iSuppli Electronic Manufacturing Service Analyst states, “These supply chain blockages arose from vendors’ inability to rapidly increase production to meet demand after the recession.” He goes onto say that “iSuppli believes that the current trend, in which electronics inventories are being weighed down by an overwhelmingly large percentage of raw materials, will continue for some time to come, given that more product in kits are waiting to be finished.”

So, at a time when many manufacturers are now becoming more selective with regards to pricing, what is more important delivery of key components or the price? What do you think?

I think to avoid severe price increases it is best practice to have good communications with your supply chain and be prepared!

Hopefully electronic component buyers are finding the electronic components they require, but may experience difficulties when buying allocated stock. Have you thought about scheduling electronic component requirements? When you schedule your electronic component requirements out for the year ahead, you are guaranteed a fixed price and will save on storage space.

About Georges Abi-Aad

CEO, electronic engineer with MBA in marketing. Multicultural; French citizen born in Lebanon working in the Middle East and fluent in French, English and Arabic. I have more than 30 years of proven experience in the Middle East with European know how. I am good in reorganization and in Global strategic management business. I am a dependable leader with an open approach in working with people, forging a strong team of professionals dedicated to the Company and its clientele. Perseverance is my key word. Married to Carole and having 2 children: Joy-Joelle and Antoine (Joyante!).
This entry was posted in economic slow down, Electronics, Global Business, supply Chain and tagged , , , , , , , , . Bookmark the permalink.

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