The electronic component shortage can be a pressing challenge for OEMs and electronic engineers. It disrupts manufacturing timelines, increases costs (due to the supply-demand imbalance), and can even lead to halted production lines, significantly impacting businesses and innovation.
Then, why are there electronic component shortages? How can you deal with them with actionable solutions? This article will offer you helpful insights to reduce risks and apply strategic measures!
Why Are There Electronic Component Shortages?
First, why is there a shortage of electronic components? The reasons are multifaceted, and the following are some of the most significant ones.
- Supply Chain Disruptions
One of the leading causes of the shortage of electronic components is supply chain disruptions. The global supply chain is vulnerable to external shocks, including natural disasters, geopolitical conflicts, and pandemics.
A single disruption can ripple through the supply chain for months through damaging semiconductor facilities, cutting off specific materials, and beyond. COVID-19, for instance, led to widespread shutdowns of factories and shipping inconvenience, which impacted component availability significantly.
- Increased Demand
The exploded demand for electronic components across certain industries like consumer electronics, electric vehicles, and IoT devices can also lead to component shortages. This is because the supply capabilities may fail to keep up with the surging needs.
Take vehicles as an example. The standard combustion engine car may require 2,000-3,000 capacitors, while an improved version may need up to 22,000 MLCCs and more to achieve complex electrified functions.
- Manufacturing Challenges
Manufacturing challenges also play a significant role in electronic component shortages. The limited production capability is not the only problem. From the very start, the raw material can face the same shortage problem, particularly for rare earth elements like lithium and cobalt.
Additionally, there can be technical challenges limiting the number of manufacturers able to produce the component, which in turn further exacerbates the shortage problem.
- Environmental Regulations
The reason for the component shortage problem can be the introduction and modification of environmental regulations as well. For example, mining activities are subject to stringent environmental regulations. It includes restrictions on the mining of materials essential for electronic components, such as copper and rare earth elements.
In addition to that, regulations regarding chemicals and other potentially hazardous raw materials are constantly changing, which also impacts the use of key materials in electronic parts.
How to Deal with Electronic Component Shortages
Now that we have discussed the causes, what can you do to address electronic component shortages? Below are some practical solutions that can help you mitigate risks and promisingly maintain a reliable component supply chain.
- Design for Substitutability
In the first design phase, you can design for substitutability. This involves creating products that can function with alternative components, reducing your reliance on a single part or supplier. By integrating such flexibility, you can seamlessly transition to other materials or components when shortages arise.
- Diversify Supplier Networks
Establishing a wider supplier network is another good method to boost your resilience to disruptions. By diversifying your supplier network, you spread out the risk and ensure multiple avenues for sourcing your components. This strategy not only increases the likelihood of obtaining the necessary components but also grants you the advantage of negotiating better terms and lead times.
- Source from Experienced Distributors
Working with experienced distributors can be the key to getting access to hard-to-find components. Distributors with established global connections often have deeper insights into stock availability and can fulfill urgent orders swiftly.
At the same time, it is important to evaluate their ability to ensure component authenticity and quality. This way, you can reduce the risk of counterfeit components entering your supply chain.
- Maintain Strong Supplier Relationships
Sometimes, the relationship is a critical element. Being at the top of the component supplier’s client list can determine whether your component needs are prioritized during component shortages.
It must be clarified that a strong relationship is built through long-term collaborations rather than sudden urgent demands for hard-to-find components. Therefore, it is recommended to mind your communication manners to foster goodwill.
- Optimize Inventory Management
Enough inventory stock is a proactive solution to electronic component shortages. Maintaining optimal stock levels ensures you have enough buffer to withstand delays. Also, it avoids excessive overstocking, which ties up cash and storage resources. Investing in advanced tools or software for inventory management can help you accurately forecast demand and adjust stock levels accordingly.
Why Go to UniBetter During Component Shortages?
If you’re searching for a reliable partner to tackle electronic component shortages, UniBetter may have the expertise and resources to meet your needs. Here’s how UniBetter stands out as the go-to solution provider:
- Wide Global Supply Network: Over 7,000 reliable suppliers help ensure a reliable supply for rare and hard-to-get components.
- Flexible Sourcing Strategies: UniBetter can adapt its sourcing strategies based on market conditions, whether it’s finding hard-to-get items or alternative components.
- Experienced Team: With over 15 years of experience, this distributor develops a well-equipped procurement team of 30+ global sourcing experts.
- Commitment to Quality: Its quality inspection measure is also impressive with a proprietary CSD quality management system, ensuring 100% quality assurance.
With more advantages for you to discover, UniBetter can be an outstanding partner for you to mitigate the component shortage challenges and focus on what truly matters—innovating and delivering high-quality products!
Final Thoughts
Electronic component shortages are a formidable challenge, but with the right strategies and partners, they can be navigated successfully. You can design for substitutability at the beginning or solve the potential shortage risk by stocking components in advance.
To ensure consistent component supply, diversify your supplier networks or cooperate closely with experienced distributors. Among all, UniBetter can be a trusted ally in overcoming challenges you may meet.
Why not contact UniBetter if you are struggling with the shortage problem now? Your problems may be solved with their professional expertise and tailored solutions!
