The Impact of the Pandemic on Component Supplies

26 August 2021

 

Over the last year or so, most of us have experienced shortages and supply issues on everything from toilet rolls to bicycles. Unfortunately, our industry has been particularly hard hit by what has become a global problem of electronic component shortages.

Global Component Supply ShortageThere are several factors that have caused these shortages, almost all of which are tied to the pandemic. Initially, the companies that manufacture silicon chips, wafers and semi-conductors for our industry anticipated a huge reduction in demand, as around the world businesses planned to furlough, downsize or even close. The situation was unprecedented, nobody quite knew what to expect, and everyone feared the worst for manufacturing.

In reality the opposite happened, and the situation led to an extraordinary shift to home working, increased requirement for remote systems, contactless devices and other means to avoid person to person contact. All of this created additional demand for the electronic components that had already been scaled back.

Most of the factories had already mothballed or reduced shifts, both to save costs and reduce risk on the production line. By the time the demand became obvious, supply levels were already exhausted and manufacturers struggled to catch up.

Thankfully, the industry is now making up for lost time by increasing capacity, staff and even factory space, however this will still impact the market with lead times expected to be extended until at least 2022 and possibly 2023. Currently, most new electronics orders are looking at around 52+ weeks to delivery. We can see this across the world for all manufacturing, from cars to computers and everything in between.

What are we doing to mitigate the issue? Upon seeing the increased demand and declining supply, we have ensured long-term orders with suppliers were still going to be fulfilled. Where we saw gaps, we have worked hard to secure parts from other sources, albeit we have had to pay a premium to do so. We have also placed ‘at risk’ orders for components where we don’t currently have firm sales booked, to ensure we are able to build and supply future units to customers without such a long wait.

Despite all these measures, and like almost every company dealing with electronics, we have been forced to extend delivery times on all products. We may also have to review future pricing, however at present we are absorbing all additional costs to help as much as we can.

For Operators and Local Authorities, the best way to help us meet your requirements and expectations at present is to make sure we can get as much visibility of upcoming potential equipment needs, through forecasting and ordering as early as possible.

We are all looking forward to the supply chain returning to normal soon, but if you have any questions or concerns please don’t hesitate to get in touch with our team at info@ticketer.co.uk.

Some of the things we have won

Transport Ticketing

Winner of the Transport Ticketing Awards 2021 'Digital Champion' Category

Profit Track 100 2021

Ranked in The Sunday Times BDO Profit Track 100, acknowledging the impressive performance and contributions of the featured companies to the economy and society during the pandemic

Ticketer Award Megabuyte

Listed as 3rd in the Megabuyte Emerging Stars Awards which recognise the top 25 best-performing scale-up Companies of the Year in the UK, for industry-specific software

Ones to Watch award

Named as “One to Watch” in the European Business Awards

Ticketer Award Thames Valley

Thames Valley Chamber of Commerce Business of the Year & High Growth Business of the Year

Gold Winner of the Coach and Bus Innovation Challenge 2019 for our passenger app Kazoot

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