VP Sales & Supply Chain Management

By: Lulu Jaff

Everyone always talks about electronic component shortage

solutions. But what causes them and how can we help to

prevent them? Many things cause electronic shortages. We

will help to identify the main ones here and the solutions to

planning ahead for them. Electronic components like other

commodities are subject to issues having to do with both

supply and demand. Component supply shortages can be

the result of tooling issues, raw material shortages, and nat-

ural disasters etc. The obvious demand shortages occur

when a commodity is flying off the shelves and there is not

enough material to keep up with market with the demands.

Here are some things that cause electronic component

shortages;

· Incorrect forecasting

· Commercial markets drives shortages

· Tooling issues, fabrication shifts, or changes

· Raw material shortages

· EOL products

· Harsh weather or natural disasters

· Product life cycles being reduced

We will discuss helpful ways to plan ahead to alleviate the

risk of your production line coming to a complete halt.

What Causes Shortages?

Incorrect Forecasting

When it comes to incorrect or unforeseen increases in

demand forecasting can seem also next impossible to get

exactly what you need when your customer needs it. Many

OEM/ CM suppliers find forecasting extremely difficult

depending on the type of markets they serve. There are

many suggested methods that can help, however many are

cost associated with having the appropriate tools needed

to make educated decisions. Small to Medium sized

companies sometimes have difficulty finding a solution

that won’t drain their profits. Furthermore, the lack of

material can negatively affect the project’s release, growth,

and potential life-time.

According to researchers, (KENNEDY; PATTERSON;

FREDENDALL, 2002) some solutions include setting up

“...inventory control regarding the type of control, service

level and related costs. The aspects usually considered in

these classifications comprise value, criticality, demand,

and the product's phase in the life cycle.” Many buyers

and engineers have to dig to find helpful data when

looking for solutions. Perfect Parts eases the process help

to make the process swift and also assists in providing

product when needed over long periods of time with

scheduling.

EOL Products

Majority of distributors cannot predict or keep up with

product change notifications or end-of-life alerts.

It’s important to not have too many disconnects in the

process because time is of the essence when trying to

resolve or react to shortages and end-of-life alerts.

Customers must be able to flag and set alerts for parts

they know present a potential issue in the future. Perfect

Parts Corporation offers golden data solutions in this

area. The data we present is audited and offered mainly

through the manufacturer. This allows for a more

pro-active approach as opposed to a re-active approach.

The tools we offer will allow a user to be able to

pro-actively search for solutions to product obsolescence

before it occurs. Product information can change quickly

causing a multitude of buyers to scurry into the electronic

market to procure product for a Last Time Buy (LTB)

leaving those without the alerts left to often sub-standard

material or alternate sources. Perfect Parts helps to offer

our customers alerts as they occur. Something that is

difficult for other distributors to maintain without a

streamline process like ours.

The process most are used to now is a re-active approach.

This may have been the best case scenario in the past.

However, Perfect Parts has taken a proactive approach to

change all of that. We have alerts directly from the

manufacturer so our clients never miss an alert and are

forced to purchase from the open market. We want our

customers to have superior service as compared to the

experience offered by our current competition.

Authorized

Distributors

MANUFACTURER

RELEASES

OEM/ ODM/

CM Customer

Time Delay Tier One

Customers

Search Engines; Ex:

Google, Electronic

Search Engines; Find

chips, Octo. Etc

Time Delay

LIVE PERFECT

PARTS WEBSITE

Frequent Audits

Perfect

Part

Search

Users

Real Time

Real Time

Real Time Real Time

Perfect Parts Data Solutions Flow Graph 1.1

We hope to make our customers satisfied and much more

successful while using the tool we created. We hope to

build a strong foundation for customer success, loyalty,

and the Perfect Parts Corporation brand as well. Our

information also includes that of Life Time Buy (LTB) or

Last Time Buy notifications. We have all the tools our

customers need to increase their success in managing

shortages.

Commercial Markets Driving Shortages & New Emerging

Technologies

As new products and technologies emerge the risk of a

similar old product reaching the risk of obsolescence

increases. The commercial market often fuels the fast

growth of the electronics industry. The volatile changes

in design and development of electronic parts and

products, is often caused by “Increases in speed,

reductions in feature size and supply voltage, and

changes in interconnection and packaging technologies…

Consequently, many of the electronic parts that compose

a product have a life cycle… which (are) significantly

shorter than the life cycle of the product.” (Rajeev Solo-

mon, Peter Sandborn, and Michael Pecht). With constant

desire to improve technology and efficiency both

engineers and buyers face demands to sustain the

commercial markets demands and growth. It’s necessary

to have tools available to our clients. We hope that

providing the tools and information we will to help to

create new innovations and mitigate the risk of not being

notified that the product (s) they use are being

discontinued. With the proper tools in place there are

ways to stay ahead of your electronic component

demands or at least have a strong grasp of the proper

methods to help mitigate the risk of having future issues.

Tracking life cycles on the products you’re using or

planning to use is a great start.

With the perfect parts tool you can do just that. Perfect

Parts helps in all stages of the process from new product

integration to supplying a steady flow of products to suit

your quarterly or yearly demand.

Tooling Issues/ Fab Changes

Many of the shortages are caused by the component

manufacturer experiencing tooling, fabrication shifts/

changes where they face their own internal shortage on

material needed to fix an existing machine. These issues

leave the customer frantically searching to locate

material once they get word that their parts cannot be

produced for a certain amount of time. Those who

cannot wait are driven into the open market to find

sources for the product that they need for their build.

This particular issue leaves little that one can do

depending on the market and the availability of those

products. Perfect Parts helps by assessing the market

and giving the customer immediate feedback of all

possible options in regards to the part.

Some include locating a replacement, mitigating the

customers risk from procuring from an open market source,

and locating OEM/CM surplus inventory which use the same

items on their production line.

Raw Material Shortages

Raw material shortages occur for a number of reasons.

Quite simply there are limited resources when it comes to

raw material used for electronic components. Like all

natural resources we run the risk of depleting or using up

the current supply. From time to time, these issues arise

due to the location of where these raw materials are

sourced. Political issues can arise in areas where raw

material is mined etc. Areas like the Congo in Africa are

fueled by corruption, oppressive political & economic issues

there risky. Sourcing raw materials from these areas can

become extremely difficult to rely on during civil and

political unveils or unrest for steady supply of materials for

production.

It’s highly suggested to take the conflict mineral, substance,

full material disclosure information into account when

selecting a product. Perfect Part search has the data

needed to make better decisions. With access to over

four-hundred million parts in our database - Perfect

Parts Corporation can help to provide information that

will help the engineers and purchasers make the best

decisions possible when it comes to conflict mineral

information.

Harsh Weather or Natural Disasters

Harsh weather and Natural Disasters have been known to

slow down shipments, cause delays and overall disrupt

supply chains. Factories with production in areas which are

prone to having hurricanes, typhoons, and tsunamis pay the

price when a natural disaster strikes. In fact, the last

typhoon in Thailand caused major hard-drive shortages all

around the world. Unfortunately, we can never predict when

a natural disaster even when it can negatively affect our

supply chain. The only approach which has been proven

effective is to mitigate this risk and take a proactive

approach. Our state of the art and innovative tools can be

your first line of defense against these risks to your

production. Our newest features in this area will soon be

released.

Conclusion

Although, shortages occur Perfect Parts has the tools needed

to plan a pro-active approach for your supply chain. We are

the first distributor in the world to take such measures to

support our customers supply chain. Try our data solutions

tool by calling 949-209-1655 or by emailing

Support@Perfectelectronicparts.com

References;

1. (KENNEDY; PATTERSON; FREDENDALL, 2002) KENNEDY , W. J.; PATTER-

SON, J. W.; FREDENDALL, L. D. An overview of recent literature on spare

parts inventories. International Journal of Production Economics, v. 76-2, p.

201-215, 2002.

2. Rajeev Solomon, Peter Sandborn, and Michael Pecht. Electronic Part Life

Cycle Concepts and Obsolescence Forecasting. IEEE Trans. on Components

and Packaging Technologies, Dec. 2000, pp. 707-717 1