Mitigating the impact of IOT

Esprit Electronics, Supply Chain Director, Paul Handley examines how the IoT, automotive and mobile markets are impacting on supply chain management.

As a result of the burgeoning mobile, automotive and IoT markets lead-times of many discrete devices, especially capacitors continue to have potentially line-stopping allocation and end-of-life issues.

This is not simply an issue affecting UK organisations, as most analysis and opinion suggests that growth in these markets will pick-up from the 2017 levels and continue to increase in 2018. Combine this with optimistic global GDP forecasts and you start to see the extent of the supply and demand problem emerging across the globe.

So, what has Esprit been doing to mitigate supply risk?  Firstly, communication is key and we make sure that we provide our customers with timely relevant information.

We also use market-leading software that analyses product lifecycles and aids part selection. This means that we’re able to suggest multiple manufacturers and, if acceptable, generic options.

In addition, we work closely with our franchised distributor network to provide information on new projects. This allows for project lifecycles and launch dates to be discussed with both the distributor and the manufacturer and for realistic assessments to be made on the material availability.

It’s vital to recognise this is an industry wide problem and although this cycle will eventually end it’s unlikely to be in the foreseeable future. In 2016
Esprit had the foresight to predict these challenges would continue to worsen and took the decision to monitor the market closely in order to analyse trends.  Armed with this research in Q1 2017 we met with our key suppliers and manufactures to learn their views on how the growth and demand from the automotive, mobile and IoT industries would impact on marketplace.

This meant that we could enter into discussions regarding how best to support long-term contracts by identifying, isolating and finding solutions to issues.  This pro-active approach has been key to managing relationships.

The one thing that we safely predict is that If organisations are to continue to provide the service levels customers demand they are going to have to work smarter to meet forecasts and expectations.