Focus on planning

Phoenix Systems UK explains how long term forward planning and committing to stock are two ways the company is tackling today’s unpredictable market

Two key trends currently having a big effect on the electronics manufacturing industry are material de-commits and resource. OEMs are de-committing orders at the last minute, making it difficult to accurately plan production lines. Recruitment is also incredibly challenging at this time. The number of people applying for jobs has reduced significantly, and those who are interviewed are often countered by their current employers to stay.

These trends are impacting purchasing. The situation is creating additional work, as the purchasing teams are constantly looking for alternative parts and suppliers. They are also escalating delivery times with current suppliers and de-expediting material which then cannot be built to protect cash flow. The resource issue is also having an impact as the company is unable to recruit the head count required to deal with increasing work volumes.

Responding to these trends, manufacturers need to work with suppliers to hold stock and encourage sales teams to get forecasts and commitments from customers. Introducing a third party to secure buffer stock for future demand and/or introduce inhouse buffer stock protects key components from supply chain delays. If stock is readily available, it often needs to be bought in straight away and then the manufacturer can work with its customers to share the financial burden.

To address these trends head on, Phoenix is pushing customers to commit to forecasts and orders covering all of 2023 as a minimum. The days of fast turnaround volume builds are gone for now, with no sign of returning to normal in the near future. Planning ahead and committing to stock is the best course of action.