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Component Shortages and Sourcing Issues

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Component Shortages and Sourcing Issues

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Since 2017, companies managing electronic components have been facing challenging times with successive waves of supply shortages, price hikes and lengthening lead times. While the market conditions have been improving steadily, these shortages have left a lasting impact on manufacturers and customers.

Since 2017, companies managing electronic components have been facing challenging times with successive waves of supply shortages, price hikes and lengthening lead times. While the market conditions have been improving steadily, these shortages have left a lasting impact on manufacturers and customers.

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Component Shortages and Sourcing Issues

  1. 1. SOURCING ISSUES COMPONENT SHORTAGES AND ©2019 All Rights Reserved.
  2. 2. Managing more than 700,000 parts across 27,000+ suppliers at any given time provides Jabil with unique insight into key commodity trends, strategies and shortages. Therefore, it goes without saying that it’s been an interesting few years in direct procurement. Since 2017, companies managing electronic components have been facing challenging times with successive waves of supply shortages, price hikes and lengthening lead times. While the market conditions have been improving steadily, these shortages have left a lasting impact on manufacturers and customers. Data based on a 2019 survey of 305 supply chain decision-makers at OEMs with more than $500 million in revenue
  3. 3. Are impacted by rapid technology transitions Are still feeling the impact of supply constraints46% 44%
  4. 4. Saw profit margins narrow Saw delays in production delivery or time-to-market Were forced to raise prices Struggled with quality issues while investigating options Lost revenue 46% 42% 42% 30% 30% The Business Impact of Sourcing Issues
  5. 5. 5%0% 10% 15% 20% 25% 30% 35% 40% $ 50M Less than $ 100 –$ 500M $ 50 – $ 100M $ 500M More than The Direct Financial Impact of Sourcing Issues When answering this question, participants were asked to think of all cost-related impacts including lost revenue, increased expenses and operational costs to respond to component shortages. Nearly all participants have revealed that their company has experienced a direct financial impact from sourcing issues. Six out of 10 participants say that their companies have seen losses of more than $50 million, with one in four saying their companies experienced more than $100 million in losses.
  6. 6. Healthcare 55% More than $100M Energy 49% More than $100M Computers & Electronics 48% More than $100M Telecommunications 48% More than $100M These industries saw the largest financial impact:
  7. 7. These industries saw the largest financial impact:Preparing for Future Shortages 48 % 45 % 26 % are evaluating multivendor sourcing strategies are revising approved vendor lists are ending sourcing partnerships
  8. 8. But supply chain decision-makers are optimistic: say things will get better in the coming year. 74 %
  9. 9. Jabil (NYSE: JBL) is a manufacturing solutions provider that delivers comprehensive design, manufacturing, supply chain and product management services. Leveraging the power of over 200,000 people across 100 sites strategically located around the world, Jabil simplifies complexity and delivers value in a broad range of industries, enabling innovation, growth and customer success. For more information, visit: jabil.com For more supply chain content, visit jabil.com/blog ©2019 All Rights Reserved.

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