It should come as no surprise that the electronics industry is a volatile and unpredictable market. Component shortages can happen at any time, and they can quickly cause disruptions in your supply chain. For consumers, this translates into an inability to find replacement parts for their devices or delays when purchasing new equipment from manufacturers who are waiting on key components to arrive. However, there are steps that you can take to reduce the likelihood of component shortages impacting your business.

How do component shortages happen?

Component shortages are a common problem for electronics manufacturers. There are a number of reasons why component shortages happen, including natural disasters, politics, production problems and/or poor planning. Some electronics component suppliers will have an excess supply of parts in their inventory while others may be caught unprepared by sudden demand spikes.

If you're considering buying components from an overseas manufacturer, make sure that they can deliver on time so that your production schedule isn't impacted by any unforeseen delays in the delivery process.

Plan for supply chain disruptions

You should always have a plan B. If a supplier is unavailable or the part you need becomes difficult to find, don’t wait until the last minute to source it elsewhere. There are plenty of options out there if you take the time to investigate them in advance of an emergency situation.

So how can you plan for these disruptions without impacting end consumers?

Diversify suppliers

Diversification is the process of finding multiple suppliers for each component. This is especially useful if you have a large supply chain or have been working with one supplier for some time, as they might not be able to meet demand at all times.

It’s important that they are located across the world (ideally on different continents!). This will help not only reduce inventory costs but also mitigate risk by ensuring that there are alternative sources of supply should something happen to one of them. You can also use this method as a backup plan when sourcing parts that have limited availability or high demand; by having additional suppliers for the same part number and/or country, it gives you more options even if something goes wrong with an existing relationship.

Secondary component marketplaces

A secondary marketplace is a place where you can buy or sell components. For example, you might have some old hard drives that are no longer useful to you and want to sell them for cash.

What makes these sites unique is that they are not just used by individuals looking to get rid of excess inventory; they also serve as a bridge between manufacturers and sellers who may only be able to access certain parts through secondary markets.

While secondary markets can fill critical gaps, buyers also need to beware: you’ll have to pay many times the manufacturer’s price when trying to find replacement parts, and if you work with the wrong broker, you may not get the right parts at all. It takes experience, patience, and strong relationships to successfully navigate the secondary marketplace.

Strategically manage inventory

To avoid getting stuck with a large inventory of parts you can’t sell, it’s important to make sure that you have a good supply chain management software. This will allow you to manage your suppliers and inventory as well as forecast demand for each part. Electronic parts can be tricky to source because there are so many different manufacturers who may stop producing an item at any time. To find the right parts, consider looking at several suppliers and their reputations online before deciding which one is right for your business.

With Amplio, it's never impossible to find what you need.

Large, sophisticated enterprises struggle to manage component shortages – it’s doubly difficult for growing OEMs that are just getting their feet under them.

While the processes above take a lot of time and effort for OEMs, specialized electronic part procurement solutions like Amplio make resilience a breeze. 

Amplio is a simple solution that works with multiple suppliers, warehouses, logistics providers and customs brokers on its OEM clients’ behalf – ensuring that they always have the components they need at the right price. With built in intelligent supply chain analytics software and a secondary component marketplace, finding replacement parts changes from a liability to a breeze.

Component shortages are a fact of life for electronics manufacturers. There is no way to completely avoid them, but you can take steps to mitigate their impact by diversifying your suppliers and planning for disruptions in the supply chain. In addition, secondary marketplace options exist that allow you to buy directly from other users or third-party vendors who offer surplus inventory at competitive prices. If your procurement team is struggling to get ahead of electronic part shortages, get in touch with Amplio and we’ll create a no-obligations plan of action to solve your critical gaps and prevent them from reoccurring.