A Three-Pronged Approach
Given the nature of the semiconductor industry, especially its inability to scale up production on demand, the global chip shortages are expected to last well into 2023. As worldwide demand for electronics continues to grow unabated, manufacturers must therefore look to adopting a three-pronged strategy to meet both their own requirements, while satisfying customer needs.
First, businesses can leverage the capabilities of a reliable third-party manufacturer (TPM), entering into short-term contracts to assist with coverage and procurement. By allowing companies to avoid a “locked-in” situation, these entities can ensure emergency stop-gap support while the new chip factories go into production. Leveraging their core support-centric capabilities, the TPMs can also help further alleviate the scenario by offering customized service plans for driving better business results.
Building a robust supply chain in association with a reliable partner (with a proven track record in the domain) is the other aspect of the strategy that businesses need to embrace. By proofing them against potential supply chain shocks, the partner would be able to help drive a smooth operation paradigm for the manufacturer, while ensuring that there is adequate capability for capitalizing on emerging opportunities. A successful partnership holds the key to the future here. Figure 3 sums up the prescription:
Figure 3: Leveraging a Robust Supply Chain Partnership for the Future
And finally, with an eye on the future, businesses need to take a relook at their product design, revitalize existing designs with focused redesign initiatives, and look to build the next-generation of products that are less susceptible to such shortage scenarios. Partnerships with leading global engineering research and development (ER&D) firms that specialize in these services can prove to be a game changer.
Figure 4 provides a snapshot of the redesign process:
Figure 4: Redesigning for Part Shortages
