Three in every four manufactures in the UK have reported a disruption to their supply chain due to Brexit, the COVID-19 pandemic, its aftermath, and now we have logistic and supply challenges to face.
It is, however, worth reflecting on the supply chain landscape over the past few years, as the current and emerging outlook has ripples going back to the pre-pandemic era of 2018.
2019 – Trade Wars Cause Effects in Supply Chain
• US and China Trade War
• Japan and Korea Trade War
Both led to market turbulence for chipmakers and added to the rising concern over the effects geopolitical conflicts had on manufacturing and distribution. These trade wars resulted in increased lead-times, raised pricing, and contributed to constraints on raw materials.
2020 – the Ripple Effect Escalates as the World is Hit with the COVID-19 Pandemic
The historical rhetoric repeats. There is no let up on the horizon, as we face escalating shortages across all semiconductor products as we enter the perfect storm.
In a bid to manage this challenge, Dynamic EMS are continually reviewing and collaborating with our suppliers and customers regarding continuity in the supply of goods. This means that we jointly have to re-jig our business models, secure inventory, and work with our customers to ultimately mitigate all responsible parties’ risk. However, the shortages in electronics doesn’t just relate to electronics commodities, it sits across multiple sectors at the peripheral of Electronics Manufacturing Services (EMS) for value-add services such as Vertical Integration (V.I.), for example, cardboard, cement, and wood, are all having a negative effect on our economy.
Location, Location, Location – A Logistical and Logical View
As an Indigenous UK company primarily focussed on the delivery of product fulfilment within the UK, where our Original Equipment Manufacturing (OEM) partners are based, we have faced serval logistical challenges and costs attributed to getting components under our roof.
Most EMS companies are sourcing semiconductors and PCB substrates from Asia, and there have been many ‘natural disasters’ in manufacturing plants across this region that impact the supply.
Achieving the Right Balance to Protect People and Production
A pre-requisite for Dynamic EMS is the health and well-being of our team, so we moved with pace to ensure that systems were put in place to quickly protect our people. “When skating on thin ice move fast”, and Dynamic EMS certainly did that.
Like all businesses in the pandemic, there has been an impact on operating costs. Balancing a downturn in sales volume against trying to keep the headcount safe and protecting for when the world opens back up, has an impact on all companies, not only us in EMS.
Diversification Buffers Dynamic EMS
Dynamic EMS will continue its strategy in developing a diversified customer base and seeking new and emerging technologies that are a result of the COVID-19 pandemic. This we call the emerging mega trends, low touch economy, IoT environmental products, as well as divergent technologies that will emerge in the medical sector (remote monitors and point of use care).
Our Long serving client base will underpin this as they look also at diversified products that meet the need of the aftermath of COVID-19.
These are the steps that we, at Dynamic EMS, are currently taking to future-proof our business and ensure that it is the legacy company that we’ve been working hard to create for over 60 years.
Author: John Dignan, Managing Director, Dynamic EMS