Your supply chain must reduce electronic component lead times to satisfy customer requests on time and cut inventory expenses.
Inventory planners are under constant pressure to strike a balance between procuring the proper amount of stock to meet consumers’ expectations and avoiding increasing expenses to the company in today’s fast-paced and fiercely competitive climate.
You need total visibility and awareness of every link in your supply chain due to the current erratic nature of supply and demand. Most frequently, the weakest link is the impact of lengthy and long lead time electronics parts on your inventory.
What is Inventory Lead Time?
Inventory lead time is when you place a purchase order with a supplier until the order is ready for sale to the client, taking into account internal processes like waiting for approval to place the order. Your capacity to provide customer service using the current stock you have on hand will be impacted by your lead time.
Inventory planners must be aware of extra delays or long term lead times and how they will affect the electronic component lead time from when the purchase order is placed until the stock reaches the client safely.
5 Ways to Deal with Long Lead Times
Customers dislike having to wait. Waiting irritates customers, whether they are restaurant customers who want service or OEM manufacturers delaying production because electrical or mechanical assemblies aren’t finished.
Long lead time electronic parts can affect manufacturers that go far beyond frustration; they can even have a financial impact. There is a chance of running out of stock or carrying more to compensate for unreliable suppliers. Your peer competitors may release new items more quickly and take more market share if the speed to market is endangered. It gets harder to respond to market developments, and you have less time to do so if the things you’ve been waiting on for so long arrive with quality control problems. Any manufacturing business must reduce long lead time electronic parts and forecast them precisely.
Inventory Control
Having your supplier maintain inventories for components with long term lead times for electronic parts is a standard risk-reduction strategy. Buying long lead time electronic parts and components in advance of when you need them in production is how this works. Based on your annual estimates, you could buy those components with a long lead time electronic parts first instead of the full finished product.
Your contract manufacturer will hold these while fabricating other parts, components, and assembly as needed and lead time in electronics. As a result, your supplier no longer waits for those components with a long lead time.
Source Alternative Components
Not all these components are essential to the design when sourcing your PCB and lead time in electronics. Not all of these components are essential parts. Why not look for a substitute if you have any non-essential components with long lead time electronic parts?
You can accomplish two goals: lower price points and shorter lead times. Look for the components with long term lead times for electronic parts and non-key components by going through the whole electronics BOM. Ask your contract manufacturer to identify substitutes for certain parts if you’re working with them and help you figure out the accurate lead time in electronics.
Convert to Standard Components
If you really need a customized solution, be sure to rely on a provider who has experience in your sector and won’t need to spend time picking up new skills on the job. Working with a company that can manufacture and supply the components they specialize in can greatly reduce long lead time electronic parts.
However, there are situations when you can transform it into a common component. It will not only speed up engineering and production, but it will also probably cut expenses. Your supplier needs to be able to work with your designers to see if any design changes may be performed to fit a common component without affecting the functionality or caliber of your finished product.
Consolidate Suppliers
More than managing suppliers is necessary to manage long lead time electronic parts. Have you given any thought to the time required to coordinate several vendors? Lead times will suffer if you cannot place orders on time because you are juggling many relationships and buying orders while trying to keep them all straight.
It’s customary to have at least one backup provider so that you aren’t totally dependent on one source, but you probably won’t require more than two. When it’s feasible, think about compressing your supply chain to save time managing several accounts and/or putting vendor management tools in place to improve efficiency. Consolidating or switching providers can offer value in various ways, as you’ll probably discover.
Communicate
Throughout the production process, keeping in touch with your supplier can help ensure that expectations are met and that any problems can be quickly resolved. You can encourage your supplier to deliver the caliber of service you demand by supplying key performance indicators.
Some manufacturers believe there isn’t much they can do about long lead time electronic parts other than accept them as a normal part of the business. Not so. These recommendations can assist in lowering the possibility of production schedule interruptions and the ensuing income loss.
Building a solid relationship with reliable suppliers who care as much about your success as they do about their own may be the most important component in cutting down on long lead time electronic parts.
Conclusion
No matter how they are placed or how much personalization is needed, your consumers expect to receive their orders immediately. A word-of-mouth recommendation won’t happen if you take too long, and you’ll be less likely to win their repeat business. The bottom line: Your electronic component lead time matters, and cutting it can greatly influence your company.
It’s challenging to navigate long lead time electronic parts and material shortages, but you may lessen uncertainty by partnering with a distributor dedicated to your business’s success.
Even though you might not be able to affect what occurs further down the supply chain, you can still impact the factors under your control. The key to being competitive is to do just that.
