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3 Ways to Minimize Component Shortage Disruptions

The shortage is undeniable and unpredictable, but using these proactive strategies can help technology developers reduce the impact from supply chain disruptions on their business.

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This article identifies 3 ways to minimize the effects of the electronic component shortage on your business. 

The semiconductor chip shortage has been affecting multiple industries and causing several month wait times for components. These effects are caused by the following key factors: 

  • Shortages in shipping containers
  • West Coast ports, which include the Port of Los Angeles, Port of Long Beach, Port of Tacoma, Port of Seattle, and the Port of Oakland, experiencing serious bottlenecks
  • Fewer truck drivers in the long haul industry
  • Rising popularity in cryptomining resulting in the stockpiling Crypto farmers and GPUs

Here are our top 3 tips for surviving this supply chain crunch: 

  1. Buy everything you can and create a strong forecast. Communicating with your hardware partner is a great strategy to stay ahead of the shortages. Your hardware provider will assess the forecast as well as the parts needed and then reserve allocation with suppliers. Since the shortages are so severe, some manufacturers are only guaranteeing 50% supply, so prepare to get partial fulfillment. If you fail to forecast, any request for escalation will often be denied. 
  2. Maximize your strategic relationships to help get your hardware supply chain in line. How does your hardware provider stack up? Hardware providers that have well-established relationships will be prioritized during times of constrained supply. At MBX, our engineers use several different processes to ensure efficiency in our customers’ products by minimizing the variety of components across different product BOMs when possible, which in turn enables higher volume purchases and results in more buying power in the supply chain.   
  3. Configure and hold stock. Having this inventory buffer can prevent decreased revenue. At MBX, we have a hardware orchestration software, MBX Hatch™, that is your one-stop shop for complete inventory visibility for data-driven decisions to help you prepare for demand. 

Can your company endure the supply chain ebbs and flows? Check out the original article from Manufacturing Business Technology for more details on the component supply chain constraints.

 

Laurie Jones is Director, Supply Chain, at MBX Systems
About the author

Laurie Jones is Director, Supply Chain, at MBX Systems, a provider of purpose-built and deployment-ready hardware platforms and software tools for technology companies that deliver complex products as integrated hardware/software solutions.