Coronavirus Represents a Last Time Buy Opportunity
In a previous blog, we noted that despite the threat the novel coronavirus presents to global supply chains and general component market uncertainty, it also presents a rare opportunity for OEMs to take a step back and re-evaluate the strategies they currently are implementing to avoid disruption. Should they be found lacking, it might be time to consider what options are available to both mitigate current issues, as well as bypass similar future issues altogether.
In many ways, rethinking how last time buys fit into your supply chain could be the answer. Instead of being considered a last resort, last time buys should be considered a first line of defense that can help OEMs retain seamless business continuity.
In a standard market, the Partstat Last Time Buy Solution is the only all-encompassing strategy for avoiding the disruptions associated with component obsolescence. Once a component begins the transition toward-end-of life, Partstat has the ability to step in on the customer’s behalf and negotiate a large bulk purchase of all the inventory needed to complete their product’s lifecycle, no matter how long that may be. All of this is done using Partstat’s own capital, which allows the customer to preserve their own capital for use on other initiatives such as market expansion or new hires.
From there, Partstat will store the inventory in our own ISO-certified storage facilities designed to house even the most sensitive electronic components, semiconductors, computer products, or even raw die and wafer. This will reduce on-hand inventory, as well as reduce annual carrying costs by an average of 42%.
More importantly, however, in a climate that could soon be experiencing a shortage due to disrupted supply chains, a Last Time Buy Solution provides invaluable insulation from a volatile market. By supporting your products using large bulk purchases, an OEM can lock in today’s price and avoid the inflation that occurs when supply drops against rising competition. Additionally, there is added security in knowing the components acquired come directly from the component manufacturer, as opposed to a third-party supplier that may or may not have proper tracing documentation in place. As the rest of the market struggles, all of the inventory needed for 10, 15, or even 20+ years of production will already be in hand ready for use at the point of assembly.
It is easy to be fearful of a threat such as the coronavirus, and that’s understandable, but that doesn’t mean OEMs should stop thinking strategy for both short and long-term productivity. If this crisis does not prompt change, then the next disruption could be just as financially straining.