How Supply Chain Problems are Affecting the Monitoring Equipment Market
Even before Russia invaded Ukraine, global supply chains were operating with less fluidity than normal – another symptom of the ongoing disruption caused by the Covid-19 pandemic. Events in Eastern Europe, however, have only exacerbated the problem, with worldwide shortages of numerous commodities quickly taking hold.
Electrical Components: How Shortages Are Impacting Globally
Two key raw materials used in the manufacture of semiconductors – palladium and neon – are currently (Summer 2022) in short supply. For many years, neon has been produced almost exclusively in Ukraine by two companies who supply sufficient gas for the manufacture of electronic devices across the world. Palladium is produced in vast quantities by Russia, which is now unable to export its goods to the West due to economic sanctions.
Shortages of semiconductors are impacting manufacturers across the world. Lead times, which were already being stretched by Covid-19 supply chain issues, are lengthening further, affecting the production of cars, laptops, mobile phones, gaming consoles, and smart appliances. Problems are especially visible in the automotive industry, where lead times for new cars are a year or more in some cases.
The Effect On The Monitoring Equipment Market
At Sensonics, we are aware that some of our competitors are struggling with obtaining supplies of key electronic components. Even those that rely exclusively on supplies from China are experiencing shortages and delays; restricted access to the Ukrainian and Russian markets is placing Far Eastern manufacturers under greater pressure to meet soaring demand.
The problem is especially acute for businesses who rely on third-party items, such as communication modules or data acquisition equipment, which now have very long lead times. Without the flexibility to diversify, these companies are forced into a supply chain straitjacket that prevents them from finding solutions to the problem.
Riding Out The Storm
At Sensonics we have contingency plans in place to ride out the storm, so our customers are avoiding these issues. But how are we doing this?
A Diverse Global Supply Chain
Rather than obtaining key components from a single source, we have a diverse global supply chain that enables us to respond more flexibly to overcome emerging supply problems. Consequently, we have not experienced any major difficulty obtaining components, although issues remain in the market generally. We also strategically buy components to ensure that we have access to sufficient resources during lean times, particularly as supply chains are unpredictable.
Agility And Adaptability
As an SME manufacturer, we are less constrained in our buying choices than some of our larger competitors – who are often bound to lengthy supplier contracts with exclusivity clauses, so we can adopt a more agile and adaptable approach to procurement. With a holistic view of our supply chains and the freedom to quickly reshape our supply networks, we can anticipate potential problems and take swift action to avoid them.
Awareness is essential when managing supply chain problems, so we maintain close partnerships with our contract manufacturers to ensure that they have accurate forecasts so they can commit to component supplies. This prevents shortfalls in key components, one of which could cause an entire manufacturing line to grind to a halt.
A Bespoke Approach
Finally, as a manufacturer of our own designs, we don’t rely on off-the-shelf equipment that other businesses have designed which would restrict our autonomy and control in the buying process. Instead, designing our own monitoring equipment allows us to find solutions to supply chain problems, rather than compelling us to commit to lengthy and unrealistic lead times.
Contact Us For More Information
If you would like to learn more about our sensors and API670-compliant measuring and protection equipment, please call us on 01442 876833 or send us a message.