In the competitive supply chain marketplace in which EDX operates, we are the only partner who offers a Last Time Buy Solution that can securely store and fulfill critical electronic inventory anywhere in the world for up to 10 years. For companies like Philips and GE who depend on last time buys to complete the life cycle of their products, this can be an invaluable asset.
But while the idea of having a 10-year fulfillment schedule seems to be fairly self-explanatory in terms of benefits (10 years is a long time!), that only tells part of the story. By choosing to incorporate a Last Time Buy Solution into their supply chain, OEMs also get access to a variety of built-in nuggets that make our solution wholly unique.
Below are two primary benefits our partners experience when they choose to enroll in our Last Time Buy Solution:
To be clear, as part of our Last Time Solution, we do not just store the inventory — we buy it for you.
The longer the OEM projects the life cycle of their product to last, the more last time buy inventory needs to be purchased – and because long-term inventory needs can rarely be projected perfectly, OEMs infinitely prefer to have too much inventory than not enough. Every component, semiconductor, and necessary peripheral product, even the ones that may ultimately be sold off as excess, require full payment upfront. Not only does this result in a significant blow to the OEM’s bottom line for the quarter, but it also means that those funds will be tied up in their on-hand inventory for the entire length of the product’s life cycle. Any aspirations they might have to grow their global footprint, hire new workers, design new products, or even just upgrade their infrastructure might need to be put on hold until the anticipated profits from their current product are realized. If that waiting period is seven, eight, or 10 years, by the time the OEM is ready to act, it’s quite possible that the rest of the marketplace has passed them by.
To keep pace, OEMs need the working capital to act NOW. With our Last Time Buy Solution, all last time buy inventory is purchased with EDX’s working capital, not our customers’ — and instead of one debilitating upfront payment, OEMs pay off their purchase periodically as the inventory is fulfilled over the course of their personalized schedule. No other service offers OEMs this degree of financial flexibility, and each one of our customers has found a unique way to take advantage of their newfound working capital reserves.
What could your company accomplish with 10 years of on-hand working capital?
If an OEM has the proper in-house infrastructure to store critical electronic inventory, then, of course, they can store inventory on their own for as long as they need. But this analysis comes with a caveat: How much is an OEM sacrificing to do so?
OEMs bear the burden of balancing many different scales simultaneously — and paying more attention to one need means risking tipping the scales one direction or the other. One thing may be gained, but another is lost – and too often the wrong decision ends up being made, much to the annual budget’s misfortune.
Annual carrying costs are a perfect representation of this dilemma. Every section of warehousing space, every investment made into equipment packaging protocols represents working capital that could have been used elsewhere. Could this funding be better utilized elsewhere than in annual carrying costs, which can be as high as 25 percent of a component’s original cost?
At EDX, we certainly think so. As a supply chain partner, our primary goal is to provide customers solutions to purchase, store, and fulfill critical electronic inventory –and that means we operate outside the delicate economies of scale OEMs struggle with daily. As a result, we offer customers a way to not only include best-in-class storage capabilities, but do it in a cost-effective way no manufacturer can match on their own.
EDX is renowned for its commitment to innovation, and our state-of-the-art storage facilities are a big reason why. In addition to maintaining both ISO:9001 and AS9120 certifications, as well as a dedicated staff with extensive training in inspection, ESD, and MSL packaging protocols, we also offer customers the option of storing sensitive, high-value components in a climate-controlled vault chamber suitable for any kind of electronic component – including moisture-sensitive die and wafer.
All of this is part of our Last Time Buy Solution, and all of it can be yours while saving an average of 42 percent in annual inventory carrying costs.