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A Proactive Approach to Electronic Component Lead Time Delays

Posted On December 1 2022

Electronic components are in high demand right now, the industry is still trying to catch up from the events of the past few years, and that isn’t good for PCB manufacturers. Many industries rely on high-quality PCBs, and since they are in high demand, companies are overbuying to stock their own shelves, and this is causing the market to struggle even more. To avoid the lead time delays caused by component shortages, you need a proactive approach that includes an ECM partner with vetted suppliers, vast experience in the industry, and one who can manage your project from design to delivery.

Close up of a machine quality testing a printed circuit board

What Exactly is Causing the Long Lead Times?

There is a very high demand for certain electronic components right now. Automotive suppliers, cell phone manufacturers, and general consumer electronics companies are all clamoring for the same components. The increased demand coupled by low supply is directly translating to longer lead times and higher prices. Beyond the simple supply and demand, there are a few extra factors at play as well. First, manufacturers are reluctant to build more factories or increase production because they don’t know if this demand will be sustained. Then, companies who can afford the investment are buying two to three times what they normally would, putting even more demand on a dwindling supply. When components are in short supply, distributors plead with buyers not to overbuy, but many buyers panic that they’ll be left without, and do the exact opposite.

Levison Enterprises offers more than electronic assembly. We also offer electronic design, custom prototype, PCBA manufacture and PCB assembly

Being Proactive About Component Shortages

Some industries can’t simply be patient and wait for the market to stabilize. Having to shut down intermittently or miss deadlines has real consequences for many industries. Therefore, a proactive approach is the smartest way to avoid delays in lead times.

  • Purchase Advance Stock in Anticipation of Shortages

Yes, this is part of the problem. But it’s hard to take a stand by yourself. If your competitors are buying two or three times the components necessary, it’s smart to join them. There is a risk to this strategy, as you will likely be buying at an elevated price and run the risk of having an unnecessary stock. Working with your ECM to forecast what you’ll need in the future can help you alleviate part of that risk. By preparing further out than you may be used to, you can stay stocked on components and keep producing, even during the shortage. 

  • Keep Communication Open

Working with an ECM who has a good relationship with suppliers will allow you to have the pulse of the current supply and demand trends. If you know which components will stabilize and which will continue to be in short supply, you can plan and purchase accordingly. In addition, these conversations can allow you to communicate with your customers to make sure they understand the current lead times and what you are doing to respond. Being proactive with communication is always better than reactive with updates.

If you are struggling to keep up with component shortages and are frustrated with long lead times, you aren’t alone. Having an experienced, domestic turnkey ECM partner can help you navigate the current market, advise you on when to overbuy and when to wait, and give you a realistic forecast so you can plan ahead. These are challenging times in this industry, and the best way to protect your business from challenges that are out of your control is to partner with knowledge and experience. We can help. Contact Levison Enterprises for a quote on your next project.

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