How does the supply chain crisis affect the electronics manufacturing industry?

The global supply chain crisis has brought many inconveniences and negative impacts to the electronics manufacturing industry:

1. material  Supply disruption

In the case of supply chain disruptions, many electronics manufacturers were unable to obtain raw materials in time. On the one hand, many factories were shut down due to the epidemic, and some factories had only a few workers working, resulting in a sharp drop in production. On the other hand, logistics backlogs made Shipping times are longer, and according to surveys, supply chain disruptions bring 4-6 weeks of delayed material delivery, and for materials such as semiconductors, it may take more time. Many manufacturers' electronics manufacturing products struggle to meet schedules Fulfilling the order. Problems like this may extend beyond 2023, as many chip makers claim.

2. production slowdown

Due to Covid-19, many employees have been quarantined or infected at home, and working from home has also greatly reduced productivity. According to a report by Deloitte and the Manufacturing Institute, in the United States, The pandemic initially wiped out 1.4 million manufacturing jobs. Additionally, many companies have opted to implement layoffs to save costs. All of these factors have contributed to labor shortages that ultimately The production efficiency is greatly reduced.

3. Electronic Manufacturing Geographic Transfer

Due to supply chain disruptions, labor shortages, and rising raw material costs, more and more electronics manufacturers are shifting their business strategies. They tend to outsource electronics manufacturing and assembly services to areas where COVID-19 is under control and labor costs are not high. In In 2021, compared with other Asian countries, China has performed well in epidemic prevention and control, and China has sufficient labor resources and advanced technical equipment, which is a very good choice

How electronics manufacturers deal with supply chain crisis

Resilient Supply Chain

Facing a supply chain crisis, electronics manufacturers need to create a relatively flexible and resilient supply chain to deal with various unknown adverse factors such as natural disasters, material shortages, geopolitical and global trade instability, etc.

What is supply chain resilience?

Supply chain resilience is used to assess a company's ability to respond to unexpected supply chain disruptions, as well as to respond quickly and recover from disruptions.

Every link in the supply chain is closely connected, and if any link is affected, the entire supply chain is at risk. As supply chains become more complex, the likelihood of problems throughout the supply chain also increases. In the past , most manufacturers are very focused on other aspects such as cost and inventory, and few of them are focused on improving supply chain resilience until the pandemic hits the world. Finally, many companies are negatively impacted by the global supply chain crisis. Resilient supply chain, companies can predict

Core factors of supply chain resilience

There are several core factors that can significantly affect supply chain resilience, let's discuss them one by one:

1. employee

Skilled employees help companies become more competitive and grow. Electronics manufacturers, for example, need workers who can operate machines correctly, engineers who can design viable solutions, and purchasing managers who are familiar with the variety of materials and can manage relationships with suppliers. With these With professional staff, it will be easier for manufacturers to build their organizations and reduce risk at every link in the supply chain.

2. process

Reasonable and efficient processes can help suppliers save a lot of time and speed up time to market and vice versa. It is very important for manufacturers to coordinate employees in different departments, and sales should work closely with buyers to optimize inventory and increase flexibility. Market trends and long-term needs, making purchase plans in advance to ensure smooth processes.

3. technical field

Advanced technology helps manufacturers build more flexible supply chains. For example, by using ERP systems, they can track the status of every link in the supply chain from procurement to logistics in real time. Big data can be used to analyze market trends and customer needs to respond quickly Change and adjust business strategies. Therefore, electronics manufacturers are advised to utilize advanced technology, which brings greater visibility and reduces the risk of supply chain resilience.

How to build a resilient supply chain?

On the one hand, when designing a product, engineers should consider various aspects to ensure that the product can be designed more flexibly, because redesigning takes a lot of time. So how to design a product strategically? First, they should be familiar with materials and electronic parts, Make sure that the parts that have been eliminated are not included in the new product design. Second, engineers should always pay attention to market trends. In recent years, people prefer small-sized electronic products, therefore, engineers should follow this trend in the design process Minimize product size. But it's hard to say where trends will take us, so electronics manufacturers should be aware that keeping product designs stable for 10 years is less likely, that's why we recommend flexible design solutions, which allow Existing designs are suitable for different parts that may be developed in the future.

On the other hand, electronics manufacturers should increase their investment in supply chain technologies and services to help them anticipate future challenges and better analyze the market. Traditionally, people predict the future based on historical, macroeconomic, and market conditions, but there are Many unknown factors, such as COVID-19, have greatly affected the entire electronics manufacturing market. Therefore, we need a more scientific approach to improve supply chain visibility.