Procurement situation in the electronics industry requires quick action

The supply bottlenecks in the market for electronic components are coming to a head. Recently, the Daimler Group sent thousands of employees into short-time work. Other car companies are also suffering from the crisis, which was triggered on the one hand by the Corona pandemic and on the other by the blockade of the Suez Canal by the giant freighter "Ever Given" in March. Volkswaren, for example, has also sent thousands of workers at its Emden plant into short-time work because of a shortage of components. And Peugeot is installing analogue speedometers in one of its models again, according to german Broadcaster Tagesschau.

Of course, we at SMART TESTSOLUTIONS are also feeling the effects of the supply crisis. However, thanks to early reaction and the enormous commitment of our purchasing team, we have been able to meet all delivery obligations so far.

Increased purchasing since January

That is not easy. Back in January, we reacted to rumours that were already doing the rounds about the end of 2020. Until then, we worked more according to the principle of just-in-time production. But then we decided to buy on a large scale and to increase our stocks. This mainly concerned semiconductor components that are used on the CVM modules and the MCM assemblies, but also stranded wires, contacts and connectors for the production of cable harnesses and breakout boxes.

Important partners in purchasing were not only our distributors, but also our major customers, who gave us direct access to chip manufacturers here and there. In addition, we have recently approached brokers to a greater extent after consultation with our customers.

Nevertheless, we can't give the all-clear: the delivery time for semiconductors is now 40 weeks - and it's still rising. After all, a semiconductor goes through a very long production process. Eight weeks is more the rule. The output cannot be increased without further ado. In addition, almost all electronics manufacturers have now recognised the situation and are trying to fill their stocks. The crisis is self-reinforcing.

Customers should report their needs now

For us, the long delivery times mean that we have to plan early. For large quantities in particular, we need information as soon as possible about the 2022 requirements.  This applies especially to product series such as the CVM G5S, whose components must meet the quality standards of the Automotive Electronics Council (AECQ). If this is not the case, our purchasing department has more alternatives to choose from.

In the area of cable harnesses/breakout boxes, we also start looking for alternative components depending on the procurement situation and the requirements of the customer project. In the meantime, we have organised procurement in such a way that we can supply customers with products quickly and in high quality as usual.