As a result of the pandemic, an enormous amount of pressure has been created for global supply chains. The electrical industry has not escaped these challenges. Manufacturers struggled to meet growing customer demand, and while 2022 seemed hopeful that things would get back to a sense of ‘norm’, the electrical sector still experienced significant supply chain disruption.
To avoid this disruption, manufacturers must therefore learn from the challenges faced and plan ahead carefully. Supply chains need to be resilient, flexible and efficient going forward.
Poll results
In our recent LinkedIn poll, we asked our followers what they thought 2022’s biggest electrical industry supply chain issue was.
Electrical industry supply chain issues: what we found
Delivery lead times
Of those that responded, 44% cited delivery lead times as the biggest issue in the electrical supply chain in 2022.
Lead times are at record highs and are expected to continue accelerating. Businesses and their suppliers have then faced months of challenges leading to extended order-to-delivery timelines. From port congestion and transportation bottlenecks, to raw material shortages and labour constraints at the vendor or manufacturer. It’s no surprise that lead times continue to be a struggle in the electrical supply chain. As a result, companies have attempted to tackle port congestion challenges by seeking alternative seaports for import or export, or by diverting some shipments to airfreight.
Product sourcing
The second highest response was 38%, that highlighted product sourcing as the greatest challenge for the electrical industry in 2022.
Both Ukraine and Russia are significant producers of aluminium, copper and steel. This has resulted in products not being available for purchase. The availability of supply to meet elevated demand is a concern, and even when supply is attainable, lead times for electronic components are three times longer than normal.
External impacts on markets
19% of respondents highlighted external impact on markets as their biggest challenge of 2022.
2022 has brought unexpected twists and turns in the electrical supply chain that required continued agility, resilience and adaptability in supply chains. Economic markets and specifically inflation, geopolitical and trade risks, and the changing global health situation will all impact supply chains.
Factors such as the Russia-Ukraine war, the economic fallout from Brexit and China’s continued pressure on Taiwan all have potential unpredictable spill over on the electrical supply chain.
Other
This week 0% cited ‘other’. ‘Other’ could factor in several challenges, some examples could include labour challenges, or lack of communication.
Like many other industries, the cost of labour in the electrical industry is slowly increasing alongside the cost of products. In addition, staff shortages, due to dwindling markets or sickness, can leave projects and daily functions dangerously understaffed.
While communication won’t be a saving grace, it could help solve some of the smaller challenges organisations are having with their supply chain. Not every service-related slowdown can be solved by talking, but a considerable number might be. If nothing else, a lack of transparency concerning timelines, delays, expectations and chains of custody erodes supply chains by compromising trust.
Learn more about B2BE’s solutions for the Electrical Industry.
Find out more: Digital Transformation in the Electrical sector online webinar
Join us on the 15th of September at 10am as we host the online webinar: How the Electrical sector can THRIVE with Digital Transformation even in the midst of a Global crisis. This webinar will focus on the current digital transformation trends in the electrical industry, the potential to dramatically improve order to cash and purchase to pay processes and understand how your business can leverage transformation opportunities. Register here: https://app.livestorm.co/b2be/edawebinar.
More information
B2BE’s experience in the supply chain sector allows our customers to build, expand and adapt successfully, enabling greater effectiveness. To engage with B2BE and offer feedback on what matters most to you and your business, make sure to follow us on LinkedIn and across social media. You can also vote in our latest LinkedIn poll. If you’d like to discuss your future supply chain strategy, get in touch with us.