How to Avoid Electronic Component Shortages and the Role of Electronic Component Brokers
Everyone involved in product development and manufacturing can attest to the frustration that comes with component shortages. Planned or unplanned, whenever there is a limited stock of components for any aspect of the production chain, it causes a domino effect up to the finishing line. Most production managers, component buyers, and suppliers try to live by the Boy Scout mantra ‘Always Be Prepared’ but, shortages can happen at any time. While hardware components can be altered or replaced when there is a shortage, it is a lot more difficult to deal with the electronic component shortage.
Due to the fact that these components are manufactured for specific purposes, any alteration or counterfeit can affect the quality of your finished product. Unfortunately, electronic components like transistors, diodes, IC’s, transformers, capacitors, resistors, and indicators are in shortage, now more than ever. Following the 2017–2018 shortage in components, there was an industry-wide scramble for the best of what was left and, although manufacturers of these electronic components have attempted to supply the increased demand, there is still a wide gap.
To satisfy the bulk need for electronic components, counterfeit versions have nearly taken over the open market. These counterfeits of surface mount devices (SMD), multilayer ceramic capacitors (MLCCs), resistors, transistors, and diodes, among others, are more of a problem than a solution. Typically, they are available on request because of mass production but, they are produced with substandard materials and can cause a malfunction in products.
Sadly, most electronic components buyers have fallen into the claws of counterfeit products due to the shortage of components from verified manufacturers and suppliers. Purchase agents tend to carry out speed buying to fulfill their customer demands, which is very risky as they usually end up getting ill-fitting, faulty, and disastrous components. For industrial, automotive, commercial, or any other type of production, you need only the best standard of electronic components. In this article, you will get a detailed breakdown of ways to be prepared and relatively unaffected by the industry shortage of electronic components.
How to Avoid Electronic Component Shortages
Situations of electronic component shortage can be very unpredictable and dependent on the market trends of price and allocation. It is also very expensive and time-exhausting to handle the aftermath of a shortage in the production process. However, you don’t have to stress about finding a lasting solution to the shortage issue. We have highlighted four detailed strategies to help you avoid electronic component shortages and get your product developed just as it is designed.
1. Research and evolve with industry trends
There are some shortages that occur as a result of a decline in demand for the component across the industry, or an improvement to an old version. In order to avoid shortage due to these, you should carry out deep research during your product design and conceptualization. This research should cover the materials and electronic components that will be needed for development and manufacturing. Make sure to include the models and types of components that you choose to use for your product development.
If you notice that any component has been reviewed recently or had any changes done, it is best to include these amendments in the design of your product so that the components available will match the need. Also, industry trends and predictions can help you know which electronic components are being replaced by other manufacturers, in the same industry, for better options. When you have this information, you can be sure that the preparation for your product development is as full-coverage as can be. In the event of any shortage after your research, the chances will be in your favor because you would have all that you need, in the right sizes, shapes, and models.
Most product manufacturers end up reviewing their design during prototyping because the important components they need are in shortage. You can avoid this stressful situation by getting your research done early enough and carrying out any form of evolution, if necessary, for your product to get the right electronic components and have a flawless development process.
2. Increase the volume of purchase
A common trend among manufacturers is, buying the right amount for each stage of product development. While this is cost-effective, it also means that the market shortage of components could have a grave effect on the production schedule and delivery.
If a particular model of transmitters is used to test the prototype, and there is a shortage of that model during production, manufacturers may run a loss. They will either have to test a new model and start the process again or attempt to speed-buy, which is a massive risk, as explained earlier.
Rather than go through all this, it is best to increase the volume that you buy before production and avoid shortage. Any electronic component that can be stored for later use should be bought in bulk quantities to guarantee the standard of production at all stages. This is also helpful because you may get bulk discounts for a high volume of purchase, while effectively avoiding electronic component shortages that could affect the quality of your product.
3. Maintain strong relationships
The key to success is the type of business relationships you maintain, especially in the manufacturing industry where reliability runs the day. These relationships are important for effectiveness in every aspect of the production, supply, and demand chains. A reliable manufacturing team ensures that you are up to date on all components required for successful development and a reliable supplier helps you keep ahead of shortages. Hence, you need to maintain strong relationships with your team of professionals so that the standard of your products will not be compromised.
With the right relationships, you can easily avoid shortages of electronic components by getting more stock and essentially preparing for the downtime. Also, strong business relationships help you secure valid connections to sources when you need to get a hard-to-come-by electronic component, especially during shortages. Building a relationship with an electronic component broker or individual distributor like Aztec Global Solutions Inc. fulfills this purpose perfectly, but more on that in the next point.
4. Expand the sources on your Approved Vendors List (AVL)
For some people, having multiple sources per component on their Approved Vendors List (AVL) may seem like a luxury. However, the recent limitations in stock have made it a necessity to get more suppliers and sources to purchase electronic components. Having just one vendor on your AVL, for one or several components, puts you in a similar situation with having your eggs in one basket -if the basket drops, it is a mess. Instead, expand the sources you have, and do it with enough time to check out each of the vendors and be certain of their quality-acquisition.
A second or third source for electronic components will come in handy whenever any of your vendors is out of stock or otherwise unable to deliver the components within schedule. This is simply the best way to avoid electronic component shortages and any other purchase-related problem that could threaten the manufacturing process and progress. When getting new sources for your AVL, it is important that you choose those vendors with enough experience, certification, and proven verification methods for component quality. Independent electronic component distributors and brokers are the top choices for an AVL because they get you the best prices for the best qualities.
An independent electronics distributor must have the right technology, experience, and professionals to help you get premium-quality electronic components to complete product manufacturing right within schedule. We understand the need for authenticity in the electronic components used for production and we do not compromise on the standard purchased for every client.
Having an approved electronic component vendor for your AVL, keeps you at the top of the game with premium quality and timely deliveries. An electronic component broker or independent distribution company is what you need to stay above the tides of shortage but, you may be wondering what exactly do we do?
The Role of Electronic Component Brokers
Independent electronic component distributors, or brokers, invest in components that are hard-to-come-by, which they purchase directly from the manufacturers and sell to clients.
Most electronic component brokers have global contacts with topline manufacturers of these components. These contacts are to secure quality electronic components during shortages, while also possessing the necessary equipment to detect counterfeit or sub-par standard. As brokers, they should also source extensively for scarce and obsolete components, based entirely on clients’ demands.
Electronic component brokers are expected to have;
· Network and sourcing team
The staff should comprise of experienced brokers who proffer creative and efficient solutions when sourcing for electronic components. They must be able to find any scarce components, including those that have very limited models available. They should have a wide range of verified manufacturers who provide the best standard for our clients’ demands.
· Wide catalog available for sale
Independent electronics distributors keep an in-house inventory with a wide catalog of components readily available for sale year-round. This inventory is maintained through business relationships with manufacturers, which enables independent distributors to get overstock to their full warehouse capacity. Due to components allocation, some manufacturers often prefer to stock up distributors so they can disperse stock faster.
· Access to global markets
Thanks to their network of business relationships, electronic components distributors have access to the global markets and can easily monitor changing trends to keep ahead of the possibility of shortage. Competitive prices
Independent electronics distributors source for components, regardless of the market price, and still sell to clients at the best prices, since they are not controlled by the manufacturer and can determine their quotations. Customers get the best deals with competitive prices from brokers and independent electronics distributors.
· Market price regulation
It is quite helpful that brokers and distributors can select prices, other than the manufacturers’ market price, to sell the same electronic components. This is very important for regulating the price during any market trend because independent electronics distributors can sell at a different price and still satisfy demands from the customers.
Electronics component brokers are important for the continuous supply of authentic electronic components to match the increased demand in different production projects.
Electronic component shortages are inevitable but, with adequate preparation, you can avoid and mitigate their impact on your business and products. Such brands are capable of delivering exquisitely in the sourcing, purchase, and delivery of electronic components, particularly during times like this, where shortages have led to scarcity and counterfeits. When you work with them, you are assured of quality and professionalism, a trustworthy supply chain that meets your needs, and the best available prices for electronic components sourced from the global market. You do not have to deal with inconsistencies in the market prices, limited supply, or an unfavorable allocation system.
