Are You Prepared for the Recovery?

DIGITIMES is reporting that PC component makers will begin hand picking their orders rather than fulfilling all orders as demand continues to increase across the industry.  At the same time, a looming DRAM shortage is being widely discussed in the media.  This is typical fare for an economic recovery — demand surges and the entire supply chain feels the whip effect, with component manufacturers seeing huge swings in demand.  When demand goes up, prices rise and supply dwindles.

Is your business's supply chain at risk?

Here is a quick test to evaluate your supply chain's strengths:

1. Do you have teams of industry experts working with the manufacturers of each commodity to identify immediate and potential supply risks throughout the next two years?  If so, you are strong!

2. Do you forecast each of your components with input from your sales teams and then take supply chain risks into account through hedging?  If so, you are strong!

3. Do you have a centralized method of ensuring Just-in-Time inventory delivery from component manufacturers to your various manufacturing facilities and throughout your global logistics network?  If so, you are really strong!

4. Are you taking strategic risk buys on components to protect yourself from cost increases while also using e-auctions with your suppliers to take advantage of cost decreases?  If so, you are doing well.

5. Are you confident in the sustainability of your supply chain?  Do you have a team dedicated to auditing the working conditions and environmental impact of your first, second and third tier suppliers?  If so, you are strong.

Hopefully you are now revitalized and rejuvinated by the results of this quiz. 

However, if you would like better results the next time around, you could always consider partnering with a company that provides these services for every customer they have.  That's a much better alternative than leaving yourself exposed to supply, cost and sustainability risk.

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About the Author: Josh Neland