COVID-19 continues to impact our supply chain
Globally, electronic parts shortages and freight challenges continue. You may have seen recent news reports about car manufacturing facilities and consumer electronics being affected by microchip and semiconductor shortages. Unfortunately, there is a limited number of these precision electronics manufacturers, so many industries are feeling the impact, and Chiptech is not immune. Our team have been diligently ordering buffer stock since last year, but we are now facing parts going on allocation. This means the demand for parts is now exceeding available manufacturing capacity resulting in extended lead times, with the parts manufacturers allocating limited quantities of product across many customers to try and keep everyone manufacturing.
These challenges have arisen as COVID-19 pandemic waves cause factories to close and reopen at different times. When business resumed in different markets the demand was a lot higher than anticipated, and labour shortages due to sick leave impacted productivity. Both sea and air freight was greatly reduced. Economies such as the USA and UK only accepted inwards goods and didn’t export meaning containers stockpiled.
As a consequence, shipping costs, whether by sea or air, and parts prices have increased dramatically. We are being told by multiple suppliers and industry groups to expect this to remain for at least the next 12 months.
Our team have been tirelessly working on alternative suppliers to shore up parts supply, improving quality to reduce parts wastage, and rethinking the ways we can manufacture up and coming products to mitigate future issues.
As we now have lead times for some parts that extend beyond 52 weeks we are asking for all our customers to spend a little time with us discussing your product journey and any upcoming changes, so we can do our best to ensure uninterrupted supply.
As we work our way through shortages and shipping delays there may be times when we are unable to fulfil part of your orders, or these may be delayed. We will communicate any foreseeable impact to you a soon as possible, but we appreciate your patience while we manoeuvre through these challenging times.
If you have any questions, please get in touch.