Keeping products in production

There’s plenty of news currently explaining how chip shortages are impacting the profits of big manufacturers. Jaguar Land Rover states it has lost £9m in the last three months alone. The shortage is, in part, driven by demand for electric cars, PCs and other chip-hungry products. As a contract electronics manufacturer, FermionX is aware of the problem and managing it through its supply chain team and customers, mainly thanks to our ability to act quickly and flexibly.

Thanks to strong relationships with suppliers and customers, smaller specialist CEMs can be flexible when customers need to redesign products and parts, reacting quickly to changes in parts supply.  FermionX’ customers operate in niche markets, so are looking for bespoke build and component solutions. As they use a contract electronics manufacturer rather than manufacturing in-house, they can be flexible with when they choose to order. Big in-house manufacturers must continue to pay overheads, even if no components mean they can’t manufacture.

It seems a common view that the current shortages will continue over the next one to two years.  Supply will eventually catch up with demand through the opening of channels cut off by Covid, Brexit and other uncertainties. So how can OEMs keep products in production? Start early—keep on top of yearly requirements and review often. Talk to your CEM regularly (they should be keeping customers in the picture) to assess and proactively avoid supply delays. Pick a CEM that can be flexible. Look for one who demonstrates flexibility with ideas and solutions that support customers and keep products in production.

Read the article in the March Edition of Electronic Sourcing Magazine.

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