Electronics Supply Chain Management
Supply Chain Management in the Electronics Industry
In today’s manufacturing landscape, Asia is the main hub for semiconductor manufacturing. This came after the post-90s historic shift from Europe and America, who in 1990, contributed nearly 80% to the world of semiconductor manufacturing, as opposed to today’s collective 20%. Pre-pandemic, the electronics manufacturing industry had a consistency to its supply chain, however, since 2020 we are now faced with a strained supply chain.
Supply Chain Challenges in the Electronics Industry
While the pandemic caused serious injury to many industries, the electronics sector saw a semi-boom, due to the rise of home working, a renewed enthusiasm for net-zero, industry 4.0 and the digitalisation of factories. When we mix this with rising tariffs and manufacturing costs, supply chain disruption and counterfeit issues, the electronics supply chain is now experiencing a component shortage. Together this all could have a lasting impact for the next 2-3 years.
Counterfeit products cost $250 billion per year
Over recent decades, counterfeit electronics have become a growing issue. Although it’s impossible to put an exact figure on the counterfeit products in circulation, as many go undetected, it is known they are costly to the industry. Reports suggest that consumer and industrial businesses lose about $250 billion each year thanks to counterfeit issues. Along with end-products, counterfeit parts are becoming increasingly present in global supply chains.
Rising overseas tarrifs
Since Brexit, the electronics industry has been another victim of rising tariffs and costs, alongside the uncertainty over importing due to the global pandemic. The cost reductions which originally drew the industry to manufacture overseas no longer yield the same benefits as they once did.
Counterfeit products cost $250 billion per year
Between 2019 and 2021, annual PC sales increased by 11%, making it the biggest period of growth in a decade. While this is positive, as many industries struggled during the pandemic, it’s also put great strain on silicon chip manufacturers. Additionally, structural changes, such as the rise of industry 4.0 and energy transition towards greater electrification, have boosted demand further on the already strained supply chain for electronics.
Why Valuechain for Electronics?
At Valuechain, we believe that closer collaborative relationships between customers, suppliers and partners are the key to overcoming current problems within the industry. We fit into this belief by providing greater transparency, quality control and flexibility to cope with challenges.
Improved inbound quality control
Our Supplier Portal creates two-way communication and transparency between you and your suppliers, which helps improve inbound quality control to prevent counterfeits.. Additionally, if you do identify any defects within goods received, you can collaborate with suppliers in the Supplier Portal. Here, you can file non-conformance reports and corrective action reports together to find the root cause of issues and to help suppliers improve.
Here, you can file non-conformance reports and corrective action reports together to find the root cause of issues and to help suppliers improve.
Geographic diversification
Due to the rising costs and tariffs in overseas production, many supply chains are exploring alternative options, including onshoring initiatives. Valuechain understands the importance of this and so are working closely with Reshoring UK, to develop a digital network of UK-based manufacturers. Together, we are aiming to help procurement managers identify local suppliers that provide the right products to the right standards and help them remain competitive.
Greater adaptability
With the wave of increased demand and recent disruption within supply chains, greater flexibility and adaptability is more crucial than ever before. Design for Disruption (DfD), means that end products are designed so as many factories as possible could potentially produce the components required. If disruption does occur, then using DfD gives you options. At Valuechain, we have been working with Reshoring UK to develop a supercluster of UK-based manufacturers. Our Network Portal platform makes finding new suppliers with the capabilities, approvals and accreditations you require easy and manageable – regardless of the components complexity.