As the controversial electronics component shortage continues into 2018, it’s going to become tougher to navigate the ongoing situation, let alone stay ahead in your business. Caused by the high demand of components for the new digital gadgets and gizmos competing with one another and also fueled by the consumer demand for these new and innovative products, the demand for electronics components started to deplete supply and further anxiety about low inventory caused supply to diminish before everyone’s eyes.
Current situations, such as the components shortage, changing or unpredictable economic and political climates suggest it might be best to have your manufacturer close to home. Take a look at some of the reasons why domestic manufacturers can be your best option during the ongoing component shortage:
1. Convenience and communication
A domestic manufacturer operates on closer time zones as your company does, therefore, it’s more likely you’ll be able to reach them in a moment’s notice. Communication can also be easier when you’re not operating in opposite time zones and there are fewer language barriers to overcome.
2. Building a relationship or utilizing an existing one
It’s always good practice to establish and maintain positive relationships with your contract manufacturer. This may be easier when you have a manufacturer located much closer to you. Additionally, working with an American manufacturer may allow you access to their existing relationships with vendors and suppliers.
If your company hasn’t already established a relationship with a domestic manufacturer, it’s a good idea to build those relationships now, even during the shortage. Companies should always have a backup plan just in case your current manufacturer can’t meet your needs in the future.
3. Shipping expenses and the time allotted
With components in short supply, prices are bound to increase as demand does. When you’re working with a manufacturer overseas, it’s entirely probable that shipping expenses on top of already increased prices along with the time allotted will empty your pockets faster. Additionally, companies should consider the time it takes for these items to arrive. How many sales could you lose if your parts or products take a long time to arrive versus if you could have the parts within two to three days?
4. Unpredictability in Political and Economic Climate
The ongoing component shortage is a stressful situation for all parties involved, but changes in political and economic climates could potentially worsen the situation at hand or in the near future. These additional external factors could play a role in access to parts or products as well as price.
If you’re working with a manufacturer or assembly company in another country, you should understand that there is always a chance for unpredictability within the economic and political climate of that particular economy. Anything from a shift in currency exchange to the cost of oil to major events such as a recession could trigger major price hikes and additional delays in your parts, products and more.
Currently, tight supply is expected to continue as lead times for many parts remain lengthy. Keep a close eye on surging demand and talk with a domestic contract manufacturing partner sooner rather than later, like our team at Kodiak Assembly Solutions.
We have developed manufacturing and assembly solutions with our customers’ business goals in mind. Our experience lies in our experienced team, our state-of-the-art machines, clean facility, and quality-centered processes. If you’re concerned with growing lead times on electronics components, it’s important to contact us to place your orders before lead times grow too long.