Looking ahead: Predictions on the shortage market in 2019

Kristofor Kelly, President and CEO

January 16th, 2019

Will the shortage market persist in 2019? Here are some predictions on the state of the shortage of electronic components in the New Year.

Let’s start with the bad news: industry news sources report that the shortage market shows no signs of ending in 2019. ESPNews reports that long lead times and unpredictability remain problematic. The upside? The market overall will benefit from supply chains evolving into opportunity centers.

Electronics Sourcing takes a similar view, with industry growth moderating, but developments in digital transformation trending positive. Good news for overall supply chain efficiency, but not necessarily for your bottom line in 2019.

Facing this shortage will take planning and preparation. But if you haven’t had the lead time to prepare or nurture supplier relationships, where do you turn now? Finding a quality supplier remains paramount. Looking forward, embracing the digital transformation and engaging a supply chain partner can give you an edge.

Immediate needs, immediate responses.

Your needs are immediate. Whether it’s a lean inventory or obsolete parts driving them, you need access to in-stock inventory and a wide network of trusted suppliers. Efficient search tools and confidence in the product are critical, but you shouldn’t have to sacrifice price. Whether you have a spot opportunity or you are looking for ongoing supply, with the right partner you can exceed your cost deflation metrics without interrupting your pre-existing supply chain.

To access all of this, you will need to look outside of traditional franchise distributors. If your distributer is limited to a commodity group or brand subset, your search will be limited. When you have immediate needs in a shortage market, any additional limitations will put outsized pressure on your search. Working with a global distributor on long-term supplier relationships can alleviate some of this pressure on your most urgent supply needs.

Embracing the digital future.

On the positive side of the 2019 predictions, the ongoing impacts of digital transformation loom large. Analog processes continue to yield to more efficient digital systems. Supply chains are at the heart of this change. Turning data from newly implemented digital systems into useful information for predicting electronics supply needs will present the next challenge.

The International Data Corporation (IDC) reports that by 2021, 60% of manufacturers will leverage data and analytics to improve the fulfillment process. Ideally, additional data will allow members of the electronics supply chain to stay flexible and more easily respond to demand.

Uncertainty is a given—but you can prepare.

As EPSNews notes, the electronics supply chain “is distinguished by its complexity and inexact forecasting.” To weather the storm of the ongoing shortage, improving your logistics wherever possible will provide you with an edge. Consider tailor-made plans from experienced supply chain providers. An excellent supply chain partner can identify ways to reduce costs around procurement, increase inventory turnover, and improve cash-to-cash cycle times.

The possibilities for eliminating the high costs associated with supply chain disruptions are evolving. A custom, integrated solution will reduce your total cost of procurement. With market moderation and questions about tariffs looming, take on your supply chain now to prepare for tomorrow. You don’t have to go this alone.

 

Related posts:

4 Steps to Exceptional Quality Conformance for Electronic Components

How Can You Overcome an Electronic Components Shortage?

Real-Time Sourcing of Electronic Components - 3 Ways Your Business Benefits

 

" Efficient search tools and confidence in the product are critical, but you shouldn’t have to sacrifice price. Whether you have a spot opportunity or you are looking for ongoing supply, with the right partner you can exceed your cost deflation metrics without interrupting your pre-existing supply chain. "

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