‘Out of Stock’ until 2022 and…beyond? That’s right! It is predicted that the current supply chain crisis of semiconductors will last at least three years. And it is about to get worse—last month’s COVID-19 outbreaks in Asia are predicted to create further delays in the global supply chain and exacerbate the global semiconductor shortage.

Who is affected by the global semiconductor shortage?

Everyone. Although countless news reports continue to shed light on how hard the automotive industry and cell phone companies were hit by the shortage, a lot of industries are competing for this scarce resource. The aerospace and defense industry, industrial/automation, alternative energy, and many more. Almost everything we use on a daily basis has some sort of a chip in it, making it impossible for manufacturers of semiconductors to keep up after global shutdowns. The result? Increasing demand far outweighs supply, causing inflated prices that are passed to the consumer, shipping delays for customers and distributors, and lost revenue for companies that can’t meet the demand.

What can your company do to meet semiconductor demands amidst the shortage?

Long-term, companies should strive to build supply chain resiliency into their manufacturing process so that they are better prepared in the future. In fact, a company’s success links inextricably to supply chain performance. So how can you build a resilient supply chain during a massive shortage? Follow these 3 steps to optimize your supply chain for peak performance and help you prepare for any future challenges.

1. Assess your current inventory.
The best starting point to build a resilient supply chain is to take stock of your current inventory with the help of a trusted distribution partner that is knowledgeable about supply chain trends, demands and risks. Area51 Electronics can help you determine what parts you need by assessing your current inventory levels, how often you use the products, estimated annual usage, production schedules, and other trends and forecasts. Furthermore, we can help you identify and prioritize what steps you should take in addressing the current disruption to the supply chain.

2. Diversify your supply base.
An inevitable step to ensuring your company can procure the components it needs is to expand its pool of manufacturers beyond your usual suppliers through an authorized distributor with official permission to sell a manufacturer’s products. Authorized distributors have direct access to hundreds of manufacturer supply lines across various industries. As an industry expert and global electronic component distributor since 1999, Area51 Electronics understands the risk involved with purchasing incorrect, or worse, suspect counterfeit parts. We make sure to ask the right questions that will determine approved parts and relevant manufacturers for your needs.

As an independent distributor, Area51 Electronics allows you to also tap into our own inventory of hard-to-find, obsolete electronic parts and components through our collaborative network of suppliers, original equipment manufacturers (OEM), contract manufacturers, and distributors from other countries. Furthermore, we have achieved and maintain numerous Quality Management Certifications including SAE AS6081, the aerospace standard that provides requirements, practices, methods, and guidance to mitigate the risk of purchasing and supplying suspect counterfeit and counterfeit parts. This certification ensures that we can deliver authentic electronic products that consistently meet vigorous requirements and standards.

With both our lines, you’ll be able to have more access to different networks to optimize your supply chain and be well prepared for any future challenges.

3. Build a stockpile and store it for later use.
A key component to managing your supply chain, especially during these uncertain times, is to be proactive, rather than reactive. Experts advise against a wait-and-see approach. Instead, you can collaborate with a distributor that already has a diverse supply chain themselves—from authorized to independent lines—and can help you build up your inventory and store it for later use.

If you don’t have an on-site storage facility, there are long-term stocking options available to ensure you have authentic components on hand, when you need them. For instance, if you need to procure an end-of-life (EOL) part, we can purchase the EOL parts directly from the manufacturer, stock/store it, and schedule just-in-time delivery of the items.

This can help prevent any manufacturing or production delays due to missing parts, especially as EOL components become extremely scarce during the shortage. And it can help mitigate the risk you would encounter searching for EOL products on the open market.

To start building a resilient supply chain during the shortage, contact Area51 Electronics for our supply chain consulting services.