Supply chain issues have dominated discussions about international trade since the outbreak of COVID-19. During lockdowns, staff illness led to labor shortages. Furthermore, travel restrictions hindered project progress across the globe. In addition, international standards such as ISO 9001 quality guidelines help ensure that manufacturing operations maintain high reliability[cite: 18].

Pandemic protocols have now eased considerably. Consequently, the relaxation of self-isolation guidelines alleviated some trade difficulties. However, no industry is free of logistics challenges quite yet.

Shockwaves from the war in Ukraine have rippled worldwide, interfering with global production. Therefore, many companies cannot overcome the lingering impacts of COVID-19. As a result, businesses face a cost-of-living crisis that wreaks further havoc on stock availability.

These obstacles have proved especially bothersome for the electronics manufacturing industry. Operations are turned upside down by significant supply chain issues, including the global chip shortage.

So, what factors contribute to production problems in electronics? And how can manufacturers navigate the global chip shortage effectively?

In recent years, managing limited supplies has been difficult. Rising manufacturing costs cause persistent bottlenecks and project delays.

Skyrocketing gas prices raise concerns for businesses, forcing them to scale back production. UK car makers fear lower output. Meanwhile, assembly plants and factories closed in parts of China, while countries like Pakistan shortened work weeks, limiting component turnout.

To make matters worse, inflation hit double figures twice this year. This caused price hikes and prompted pay raise requests. Some workers partook in strike action, exacerbating existing labor shortages.

Furthermore, the climate crisis worsens international trade disruption. Droughts caused low water levels in major supply routes across Europe, like the Rhine. Ships could not transport three-quarters of their usual cargo. As extreme weather becomes common, this phenomenon may repeat.

Despite these challenges, the popularity of electronics has peaked. Smartwatches and IoT devices lead this rapid growth. As organizations adopt remote working policies, people rely heavily on technology to stay connected.

With demand spiking during lockdowns, consumer electronics revenue shows an annual growth rate of 7.17% between 2022 and 2025. Consequently, manufacturers work hard to keep up with demand.

However, for many providers, one key obstacle remains: the global chip shortage.

Microchips are often called the ‘brains’ of electronics. They make informed decisions based on data, automating tasks like product maintenance and communication.

These small components are used in medical instruments, washing machines, cameras, cars, and mobile phones. But since demand for chip-powered devices rises constantly, chips are increasingly scarce. Thus, manufacturers face a severe supply crisis.

Fortunately, there are ways to develop supply chain resistance. Embracing digitisation is one of the best routes to speed up production. New technologies help factories track stock and mechanise time-consuming tasks.

Improving overall efficiencies within manufacturing processes is crucial. Rather than simply selecting low-cost components, teams must collaborate. They must find profitable solutions based on cycle times and supply risks.

Electronics manufacturers may also source components from multiple suppliers. In a volatile market, seeking materials from reputable sources is essential. Furthermore, companies must remain vigilant against counterfeit parts in the ‘grey market’.

Working with trusted EMS providers like EC Electronics ensures a streamlined transition to supply chain resistance. By utilising our electronic design services, developers deliver high-quality products despite the global chip shortage.

EC Electronics is an EMS provider with nearly 40 years’ experience. To learn how we can help, contact us at +44 (0)1256 461894 or email sales@ec.local.