Navigating Materials Constraints: Burton Industries’ Formula for Minimizing Supply Chain-Related Disruptions
What is significant about the 2021 is the number of constraint drivers likely to be present during the year. Pent-up consumer demand is driving spikes in products across multiple sectors that were in short supply in 2020 due to the pandemic. The automotive sector is seeing both pent-up demand across all models plus increased demand for electric vehicles. Communications and IoT are also driving demand and 5G will only escalate that trend as more infrastructure is being installed. WiFi and Bluetooth modules are increasing lead-times and pricing. COVID-19 continues to drive increases in medical equipment demand.
Foundries are at capacity and in many cases, component manufacturers have firm bookings out two quarters. In some cases, parts aren’t being distributed in North America due to priorities in other regions. Lead-times, non-cancellable, non-returnable (NCNR) windows and prices are increasing across multiple commodities. The passive market has leveled out, but ICs and semiconductors are likely to be a continuing problem. Increased cost of raw materials, labor availability issues and freight cost increases are driving some component manufacturers to increase prices by up to 25 percent. In this type of environment, a contract manufacturer’s internal resources for rapidly identifying and addressing constraints are critical. This whitepaper looks at Burton Industries’ formula for addressing the current challenges. There are three key areas that the team at Burton Industries focuses on:
- New product risk mitigation
- Early visibility into developing constraints and cost changes
- Customer education.
For more information contact Burton Industries Inc.
E: [email protected]
T: (906) 932-5970
F: (906) 932-9822
1260 Wall St., Ironwood, MI, 49938, United States