Because pendulums always swing both ways, scarcity and shortages during COVID-19 triggered overordering that led to today’s surpluses of some technologies, which are causing their own disruptions and costs.
“The latest development in the supply chain landscape has been a surplus of certain technologies within their end-to-end channels,” says Ty Golden, supply chain director at RS Americas Inc. “Over the last 18 months, we’ve partnered with our supplier to keep products in stock and available for immediate delivery for customers. It’s been challenging. However, we’ve seen improvements in our KPIs for availability and services over the last four months. Regardless, we’re still in a period of demand verses supply correction in the distribution channels that we think will last through 2023.”
Despite these gains in several sectors, Golden reports that former scarcity constraints still persist for many products with embedded semiconductors. “Many industrial automation products have subcomponents that require active components, so they’re still having to wait for long periods until those microprocessors become available,” explains Golden. “Some of these lead times have been reduced, but we’re still looking at 12 months in many cases. We’re presently getting products that were ordered in mid-2022. Before COVID-19, RS was taking delivery of these types of products in six to eight weeks. During the peak of the pandemic, average deliveries were taking 16-20 weeks. Now, we’re receiving products from suppliers in eight to 10 weeks, so things are looking up.”
Golden adds that RS’s recent supply-chain efforts were aided by how it dealt with tariffs on Chinese goods imposed before COVID-19 emerged, and helped it respond during and after the pandemic. “We invested in a strategy to mitigate the tariff, which included adjusting our planning policies, expanding our portfolio with more types of technologies, and leveraging more analytics for better decisions. We don’t use data in isolation anymore, and instead bring more of our teams together to make decisions.”
Diverse options shorten lead times
Marie Dawson, product director at RS, confirms its lead times have been shortened giving customers more product options by adding to and diversifying its supplier mix. For instance, Optifuse makes fuses in California, and has maintained higher availability compared to its peers, according to Dawson.
“Giving customers multiple product options provides flexibility to ensure they can meet their design and production schedules,” explains Dawson. “This also fits with RS’s philosophy of not just being a distributor, but also being a solutions provider that can also help customers with designs and other services.”
To enhance its services and solutions, Dawson reports RS is striving to be more than just a distributor to our customers. For example, its technical team is producing ask-the-expert articles, webinars and podcasts, and it also established its Technical Solutions Center in Fort Worth. "Our sellers know the problems our customers are facing, but how do we really help them solve those problems and create solutions? The Technical Solutions Center does it by focusing on meeting customers where they are and providing individualized technical consultations in an innovative way," says Dawson. "This puts RS in a position to help our customers solve tough challenges, and open doors to other services that we can offer, including design services, kitting and even assembly. We're not just focused on products. We're focused on partnering to provide full solutions that make our customer's lives easier.”
Golden adds that RS is continually trying to explore the links between the supply chain and design. engineers, facility managers and its other customers in the field. “This is more than selling parts. It’s design and service. Customers may need a full portfolio of industrial automation components for their end solutions,” explains Golden. “For example, if they’re designing a DIN rail assembly, they may also require help making sure they have all the other items on their bill of materials (BoM). RS can supply the products and also assist with strategies and planning for designs and solutions during the design phase. We’ve added teams that specialize in these technical services and we’ve leveraged their expertise to train many of our existing people. We now have a technical solutions team with the skills to better understand our customers, interpret their data, and add value to their processes.”