Nothing is worth compromising business continuity, right? After all, consistently acquiring and distributing the right quantity of components to the right manufacturing facilities is the aim of every supply chain manager, and a goal that is virtually impossible to accomplish without adapting to numerous and inevitable supply chain disruptions.
The current component market, for example, driven by unprecedented demand in the automotive and IoT sectors, has seen lead times for critical inventory stretched to 20 or 30 weeks. This forces OEMs to take drastic measures to ensure the lifecycle of their product is fully supported without sacrificing hard-won consumer goodwill.
The issue is that most of these measures require sufficient upfront working capital to properly implement. The simplest way to avoid allocation issues would be to commit to purchasing the desired inventory quantities upfront using accurate projections compiled during the design phase.
If it was that simple, however, every OEM would adopt this strategy. The working capital to accomplish such a task is not insignificant, and committing to such a plan means foregoing — at least in the short-term — any other uses they might have for it. Visions of market expansion, infrastructure upgrades, or a wave of newly-hired staff might have to be indefinitely delayed, or even scrubbed entirely just to complete the project currently charted. In a competitive marketplace where William S. Burroughs’ classic quote “when you stop growing, you start dying” still holds power, that can be a tough pill to swallow; by the time you are finally ready to move forward, the market has already taken three steps ahead of you.
The key for supply chain managers is to find a delicate compromise between growth and consistency. In a traditional business model, in fact, where working capital limitations dictate where a company’s priorities truly lie, you could argue that business continuity risks are not just common, but necessary to remain competitive. If every penny of on-hand working capital is tied up into a single product or product line, then there’s nothing left to accomplish anything else!
If a manufacturer wishes to remain competitive while still ensuring their current products are still supported, this business model needs to change. What’s our recommendation? Instead of purchasing the inventory upfront using your own working capital, have us purchase your inventory for you.
Purchasing inventory through EDX requires nothing upfront from our customers, not one cent. By having us put up our own capital to support your product, our customers’ business continuity is ensured for up to ten years without them sacrificing any plans they might have to better their standing in the marketplace. Since its introduction, our solution has preserved over $100 million for our customers.
Going even further, if one of those potential plans involves upgrading their current infrastructure to accommodate long-term storage of electronic inventory particularly sensitive to moisture or electrostatic discharge, you can take advantage of EDX’s full suite of storage options, such as ECD dry cabinets designed for die and wafer banking or EDX’s custom storage vault, while saving an average of 42 percent in annual carrying costs. This ensures that even the most cash-strapped customers can lay claim to having an infrastructure rivaling the most respected supply chains in the industry.
There may be nothing more important than business continuity, but if it comes at the expense of your company’s long-term growth potential, it’s easy to start looking for places where corners could be cut. This doesn’t have to be the case any longer. It’s time to guarantee business continuity without compromise.