The Struggles of Electronic Component Sourcing
Electronic Component Sourcing
There are several situations that push telecom manufacturers into storing excess inventory of their electronic components – a very large order cancels, a vendor offers discounts for purchasing larger volumes, or even a forecast that’s way off base.
Ignoring this surplus inventory and electronic component sourcing as a solution is not a smart choice. Excess inventory is typically a huge cost that today’s industrial distributors cannot cope with. The extra storage costs of the warehouse, the loss of value of the product or components, and not having access to cash certainly reduces profits over time.
For any company, excess inventory definitely requires immediate attention. There many different ways of dealing with excess inventory, but it’s ideal to hire a third party who can help you manage electronic component sourcing in a more efficient and effective way.
Most manufacturers and distributors can adjust their inventory orders and react quickly to real-time data on their customers and vendors. By choosing to improve their operation management processes, they can avoid some level of surplus. It’s crucial to research what issues are causing the buildup of inventory first and then try to eliminate that problem first.
Understanding the customer’s requirements and purchasing influences will help generate more accurate order projections. It’s smart to work with a system that gives immediate, real-time access to customer decisions. It’s also wise to be in constant communication with suppliers so that you know when a product is recalled, discontinued products, or has become obsolete.
It can be quite challenging to manage the tremendous amount of information and decisions that go into electronic component sourcing. Anticipating the level of demand is probably the hardest, but most critical responsibility to avoid excess inventory.
Maintaining accurate data that’s specified by item, product, period, location and customer is crucial in order to succeed. Items should be classified based on their customer profile, product life cycle, and demand pattern, in order to make them easier to track. Make sure you also pay attention to demand surges or droughts so you can avoid price increases and take advantage of discounts.
It’s wise to modify existing company policies if there are no safeguards for electronic component sourcing. Policies should also include rules for choosing vendors or suppliers. Sourcing the right vendors is the best way to go – work with vendors who have flexibility to ship based more on demand, instead of on pre-determined minimums. Policies should also include end-of-life and final sale agreements for customers, requiring them to purchase all quantities on-hand at a certain time.
To handle the multi-faceted electronic component sourcing process, the best solution is to hire a third party. They can effectively help eliminate the buildup of excess inventory and can help save thousands to hundreds of thousands of dollars for the company. Implementing a better inventory management strategy, using warehousing and fulfillment center services and tracking inventory data is something AECI can help with. We have built a highly-qualified team to help reduce your company’s operating costs and handle your electronic component sourcing. We take the time to learn your specific needs in order to offer versatile, customized solutions for your warehousing concerns and distribution challenges. Contact us today for more information on our services.