Over the past 18 months, we’ve all been impacted by supply chain shortages. From highly sought-after disinfecting wipes and toilet paper, inflated building materials, and nearly empty car dealerships to shipping delays spurred by the sharp increase in online shopping. Yet, for businesses that rely on electronics components—like rugged, high-performance compute providers—the “great supply chain disruption” started vexing procurement efforts in 2017.
The surge to make everyday objects like refrigerators, doorbells, cars, and watches “smart” on top of booming demand for mainstream electronics was outpacing capacitor, chip and semiconductor availability. While this increased pressures on lead times and longer-term forecasting, it pales in comparison to what we’re experiencing now.
“In 25 years working in technology procurement, I have never experienced the extent of disruptions we have seen across the supply chain in 2020 and 2021,” said Tony Nucaro, purchasing manager at Crystal Group. “A major earthquake and tsunami hit Malaysia in 2010, wiping out most of the world’s memory modules. It took six to eight months before the economies went back to normal. At a year and a half with no end in sight, this current disruption is unprecedented in length, magnitude and cost.”
Hence the other major challenge: Compounded shipping delays. Closure of South China ports, congestion in the Port of Los Angeles, a shortage of truck drivers, and increased burdens on delivery companies like who’s on-time deliver has dropped from 95%+ to 80%. These holdups are increasing lead time for finished products, as well as more potential for late deliveries.
Knowing that there isn’t a universal quick fix to restore fluid supply chain operations any time soon, our team has taken proactive measures to assess and adapt to both immediate and extended difficulties.
“Through all the uncertainties and roadblocks—from suppliers closing factories, increasing prices and stretching lead times to triple the norm, to fuel and labor shortages, and even a ship thrown sideways blocking the Suez Canal—our team at Crystal Group has done everything in our power to mitigate the current supply chain disruptions,” said Nucaro.
“Everything” has involved several resourceful approaches, starting with establishing an inventory control team that includes representatives from Finance, Purchasing, Materials and Engineering. Their role is stay current on the latest supply chain news, while working creatively to fulfill orders and manage overall inventory.
A key strategy has been increasing our forecasted inventory by almost 40%. Actively working to build up our inventory ensures we have parts to choose from that may not otherwise be available. The reciprocal increase in our inventory valuation is a known financial impact, but one we’re content to manage short term to help eliminate large lead times and meet our customer commitments.
Communication is also a critical factor in navigating these unchartered waters. From collaborating both internally and with suppliers and customers, regular conversations help the team stay aware of critical component needs, shifts in forecasted availability, and additional sources of supply that meet our quality and performance standards.
“I am amazed at the teamwork this company puts forth to keep the wheels in motion,” said Nucaro. “I can’t thank everyone enough for their support, patience, adaptability and tenacity during this unprecedented disruption of our global supply chain.”
Based on the current outlook, the “great supply chain disruption” will likely continue well into 2022. But given that solving our customer’s toughest challenges is what Crystal Group does best, we will stay the course and incorporate any additional steps to ensure that our customer’s can always count on us to deliver the rugged, high-performance compute solutions they depend on and deserve.