2021: sidestep supply chain uncertainty

TTI’s director of supply chain solutions, Ben Lasoi, and supply chain solutions manager, Mike Pearre, discuss how to alleviate pain points buyers may face in the coming year.

After a turbulent and uncertain 2020, no doubt many people are hoping the new year will be much smoother. Yet, while we’re waiting for an end to concerns about Covid and economic recovery, there are other pressing issues buyers will face.

The most immediate concern is assurance of supply, and electronic components distributors are well-suited to ease that concern. At TTI we have been monitoring lead times and market demand, alongside factors such as lockdowns and the impacts of tariffs, trade deals and more. We’ve adjusted our inventory position to make sure we can continue to serve our customers’ needs in the months ahead.

This is particularly important as 2020 ended with a variety of factors that led to an unanticipated demand for passive components, most notably the wave of purchases of computers and electronics spurred by the pandemic and a massive move to working and schooling at home.

Other impacts on demand included the new generation of gaming consoles and the wider rollout of 5G, with growing demand for new phones and devices that take advantage of new networking technology. Distribution helps manufacturers anticipate these types of unplanned demand with a broader focus on market conditions.

Distribution also brings solutions that help manufacturers control total cost of ownership, helping manufacturers focus on near-term requirements while alleviating the manual work of managing purchase orders on a day-to-day basis. We also help reduce the customer supply base thanks to our ability to provide the supply chain for multiple suppliers.

In times of uncertainty, distribution provides a level of flexibility in order quantities that suppliers may not be able to provide. Distribution also helps to buffer inventory risk, thanks to intelligent inventory profiling.

Finally, as digitalization continues to transform the industry, distribution continues to take the lead in applying technology to streamline the electronic components supply chain. From EDI to API integration, distributors have always been ahead of the curve, delivering flexibility, technology resources and inventory visibility that individual suppliers may not be able to offer. Distributors are able to deliver the insights that can help OEMs and CMs automate processes and, ultimately, better control costs.

As the new year begins, we’re looking forward to a recovery that sees commercial aviation recover from the pandemic, while defense and transportation, especially electric vehicles, continue to be strong performers.

With IP&E components representing the biggest inventory management burden, making up 75 percent of a typical BoM component count, a distributor that has a strong suite of supply chain solutions can help provide both cost control and peace of mind.

If all goes as anticipated, the market for components will begin to tighten significantly and lead times will extend. Availability won’t be what it was pre-Covid, meaning that the partnerships you put into place now will be very important in 2021 and further down the road.