Mitigating supply chain risks


Astute Group’s sales and marketing director, Mark Shanley, advises buyers to seek support and guidance from a forward-thinking, trusted partner

2021 has challenged the electronics industry like never before with no end in sight. Lead times will continue to increase over the next two quarters as shortages begin to impact telecoms, which avoided the initial impact due to their long-term planning. Volumes will continue to increase as we consume more components.

Customers have secured stock for this year’s production. However, when they begin purchasing at the start of 2022, they are going to find a market with no signs of recovery. Many global distributors have been effectively managing allocation over the past few months, but the next two quarters will be a juggling act deciding who to support.

High-volume industrial component consumers are buying up pockets of stock when available at prices 10 times the standard cost. This can only be maintained temporarily and costs will have to be passed down the chain. Most OCMs will look to increase their price-book in Q1 as the impact of rising raw material costs are considered.

Open market stockists are driving up prices, with changes happening by the hour. This will drive desperate buyers to the grey market which introduces risks. The waters are tough to navigate at the best of times but will become murkier over coming months. Buyers should seek support and guidance from a forward-thinking, trusted partner, experienced in mitigating risk to the supply-chain from counterfeit and fraudulent suppliers and navigating turbulent market conditions.