Managing efficient procurement teams and processes isn’t getting any easier. Reshoring, the CHIPS Act, geopolitical conflicts, labor shortages and new sustainability regulations are just some of the global macro trends putting more stress on organizations right now.
From their strategic vantage points, procurement professionals must ensure that their organizations can source the electronic components needed to fuel innovative designs.
“Procurement is also tasked with coming up with creative ways to predict needs and adapt to challenges,” says Tim Carroll, global head of marketing and e-commerce at DigiKey.
The good news is the inventory crunch that emerged during the pandemic is now fading in the rearview mirror for many components and parts. That means it’s a good time for engineers and designers to review their current bill of materials (BOM) and work to get parts that are dual or triple sourced.
“Being proactive now will make your entire team’s life easier when it’s crunch time,” Carroll points out. “By knowing which parts are available and designing with alternatives, you can mitigate supply chain issues. The last thing you want to do is design with a specific part in mind and then find out it’s going to be sunset-ed [or] made obsolete four months later.”
5 Steps to Take Now
Here are five strategies that electronics buyers can use to work more efficiently and effectively in 2024:
1. Get Your Data in Order
As more companies invest in automation, connect digitally with one another and leverage technologies like artificial intelligence (AI) and predictive analytics, they’re realizing that a solid data foundation is absolutely mandatory. For instance, DigiKey has invested in cloud-based tools like Snowflake and Sigma to standardize, house and visualize its data. “The supply chain is home to a wealth of data from thousands of different sources,” Carroll says. “Clean, noise-free source data is essential to becoming more strategic and building resiliency in your processes.”
2. Build Your Use Cases
Data is both valuable and overwhelming. Carroll says a good first step is to determine which data points you and your team actually need for intelligent decision-making. Next, figure out what you need to do with that data to make it actionable. Ask yourself questions like: Is there a system it should integrate with? Is there a dashboard with metrics that it should plug into? What questions are we trying to answer?
3. Turn Information into Actionable Data
Are you tracking and sharing performance in an actionable way? Do stakeholders understand how they impact results? Can you hold them accountable for their roles in hitting your goals? “At DigiKey, we’ve invested in getting advanced shipping notices (ASNs) from our supplier partners,” Carroll says, who adds that ASN usage helps the distributor receive product and get it ready for sale more quickly and accurately. “If you’re collecting data for the sake of collecting it, you’ll likely end up with a bunch of noise that distracts from the most essential information,” he continues. “Data means nothing if it doesn’t translate to something you can act on.”
4. Put the Right Processes, Teams and Systems in Place
Identify your company’s biggest pain points when it comes to procurement activities. Perhaps it is order tracking and visibility, or maybe it’s the quoting and ordering process itself. “Price and availability quoting is where we frequently recommend procurement teams start when it comes to technology and process automation,” Carroll states. Quoting is another good target in a world where most procurement professionals prefer to gather quoting data in one place versus searching from websites and spreadsheets for the information they need. “This is a process that computers handle very well, so it’s a great place for companies to consider automating,” he adds.
5. Get Your Sourcing Partner Involved
Your suppliers can be your best friends as you shape your strategies, make improvements and leverage the power of technology to work smarter, better and faster. “As one of the world’s largest distributors of electronic components and automation products, DigiKey provides a variety of digital tools and technologies that help procurement professionals automate their processes,” Carroll says, “including application programming interfaces (APIs), electronic data interchange (EDI), punch-outs and more.”
Heading in the Right Direction
Looking ahead, Carroll sees positive economic indicators that component lead times may start to be reduced and that the supply of electronic components will increase later in the year.
“Unfortunately, we’re not seeing semiconductor lead times reducing to keep up with the heightened demand for electrification yet,” he explains. “It may be 2025 before we see the results of efforts like the CHIPS Act to increase production of semiconductors in the U.S., but the industry is headed the right direction.”
