Skip to content
ANNOUNCEMENT: Resilinc Announces Strategic Growth Investment from Vista Equity Partners Read More
Resilic Logo
  • Solutions
        • Solutions

          • EventWatchAI
          • RiskShield
          • Multi-Tier Mapping
          • CommodityWatchAI
          • Supplier Assessment Library
        • Data Marketplace

          • Autonomous AI Mapping
          • Resilinc Disruption Vulnerability Index
          • R Score
          • Supplier Screening
          • Application Programming Interface (API)
        • Services

          • Advisory Services
          • Data and Intelligence Services
        • Elevate your Supply Chain Risk and Resiliency Program

          Schedule Demo
  • Use Cases
        • By Industry

          • Aerospace, Defense, Government
          • Automotive and Industrial
          • Healthcare & Life Sciences
          • High-Tech & Semiconductor
        • By Role

          • Supply Chain Risk & Resiliency Program Managers
        • By Business Need

          • Business Continuity Planning
        • Elevate your Supply Chain Risk and Resiliency Program

          Schedule Demo
  • Resources
        • Learning Center

          • Blog
          • Case Studies
          • Event
          • On Demand Webinars
          • White Paper & Reports
        • Connect

          • Schedule Demo
          • Request Pricing
        • Special Reports

        • Special Report
        • Find valuable resources for managing supply chain disruptions in our Special Reports section.

        • Elevate your Supply Chain Risk and Resiliency Program

          Schedule Demo
  • Company
          • Who We Are
          • Partners
          • Careers
          • Resilinc In the News
          • Press Releases
          • Global Supply Chain Resiliency Council (GSCRC)
          • Healthcare Transparency Initiative (HTI)
          • The Risk Game
        • Elevate your Supply Chain Risk and Resiliency Program

          Schedule Demo
  • Pricing
  • Contact
Login
ANNOUNCEMENT: Resilinc Announces Strategic Growth Investment from Vista Equity Partners Read More
Resilic Logo
  • Solutions
    • Solutions
      • EventWatchAI
      • RiskShield
      • Multi-Tier Mapping
      • CommodityWatchAI
      • Supplier Assessment Library
    • Data Marketplace
      • Autonomous AI Mapping
      • Resilinc Disruption Vulnerability Index
      • R Score
      • Supplier Screening
      • Application Programming Interface (API)
    • Services
      • Advisory Services
      • Data and Intelligence Services
  • Use Cases
    • By Industry
      • Aerospace, Defense, Government
      • Automotive & Industrial
      • Healthcare & Life Sciences
      • High-Tech & Semiconductor
    • By Role
      • Supply Chain Risk & Resiliency Program Managers
    • By Business Need
      • Business Continuity Planning
  • Resources
    • Learning Center
      • Blog
      • Case Studies
      • Events
      • On Demand Webinars
      • White Papers & Reports
    • Connect
      • Schedule Demo
      • Request Pricing
    • Special Reports
  • Company
    • Who We Are
    • Partners
    • Careers
    • Resilinc In the News
    • Press Releases
    • Global Supply Chain Resiliency Council (GSCRC)
    • Healthcare Transparency Initiative (HTI)
    • The Risk Game
  • Pricing
  • Contact
  • Login
Menu
  • Solutions
    • Solutions
      • EventWatchAI
      • RiskShield
      • Multi-Tier Mapping
      • CommodityWatchAI
      • Supplier Assessment Library
    • Data Marketplace
      • Autonomous AI Mapping
      • Resilinc Disruption Vulnerability Index
      • R Score
      • Supplier Screening
      • Application Programming Interface (API)
    • Services
      • Advisory Services
      • Data and Intelligence Services
  • Use Cases
    • By Industry
      • Aerospace, Defense, Government
      • Automotive & Industrial
      • Healthcare & Life Sciences
      • High-Tech & Semiconductor
    • By Role
      • Supply Chain Risk & Resiliency Program Managers
    • By Business Need
      • Business Continuity Planning
  • Resources
    • Learning Center
      • Blog
      • Case Studies
      • Events
      • On Demand Webinars
      • White Papers & Reports
    • Connect
      • Schedule Demo
      • Request Pricing
    • Special Reports
  • Company
    • Who We Are
    • Partners
    • Careers
    • Resilinc In the News
    • Press Releases
    • Global Supply Chain Resiliency Council (GSCRC)
    • Healthcare Transparency Initiative (HTI)
    • The Risk Game
  • Pricing
  • Contact
  • Login
  • Solutions
    • EventWatchAI
    • RiskShield
      • Supplier Assessment Library
      • Business Continuity Planning
    • Multi-Tier Mapping
      • Resilinc Supplier Network
    • Autonomous AI Mapping
    • CommodityWatchAI
    • Data Products and Offerings
    • Supply Chain Risk and Resiliency
      • Advisory Services
      • Data and Intelligence Services
  • Industry
    • Aerospace and Defense
    • Automotive & Industrial
    • Healthcare & Life Sciences
    • High-Tech & Semiconductor
  • Pricing
  • Resources
    • Learning Center
    • Special Reports
    • Events
    • Developer API
  • Company
    • About
    • Partners
    • News
  • Contact
  • Blog
  • Careers
  • Demo
  • Login
  • Customer Hub

Home / Blogs / Pay attention to suppliers supplying your low-cost items. It pays off.

semiconductor

Pay attention to suppliers supplying your low-cost items. It pays off.

May 18, 2021

Resilinc Editorial Team

Supplier capacity risk, Supply Chain Disruptions, Supply chain mapping

As expected, the semiconductor shortage continues to plague the automotive industry with carmakers now expected to suffer losses of $110 billion in 2021, according to a widely reported estimate from Alix Partners. Automakers are working hard to shore up their semiconductor supplies, modifying some vehicles to use fewer chips and considering the possibility of delaying production of 2022 models.

Everyone who follows automotive supply chains knows that there will be no short-term solution: there is massive pandemic-fueled demand for chips and carmakers are competing with consumer electronics manufacturers who secured stock first. And, the long timeframes required to build new semiconductor fabs mean chip supply won’t be flowing anytime soon. But as procurement managers in automotive and other industries look ahead to building more resilient supply chains for the future, Resilinc hopes some key best practices will be kept in mind.

At a minimum, automakers and OEMs in other industries need visibility into multiple tiers of their supply chains and access to early warning systems and market intel so they can anticipate trends in pricing, looming supply constraints, increasing risk levels at important suppliers and other issues. They should also develop and train specialists in different commodity categories to pick up on early warning signs and respond proactively.

Even the best supply chain risk management (SCRM) programs probably would not have enabled automakers to avoid colliding with the pandemic-induced chip shortages. But OEMs in automotive and other industries that have invested the time and money in robust supply chain mapping, risk monitoring and mitigation have seen it pay off in long-term ROI.

One important element of a strong SCRM program is doing risk assessments on suppliers to determine how a supply chain disruption – to that supplier’s goods – would impact your revenue. This often requires a change in mindset—from focusing the most attention on suppliers with the largest purchase orders to focusing on those with the greatest potential to cut into your company’s topline.

As this May 8 Washington Post story details vividly, disruptions at one small automotive supplier in Virginia have forced production cutbacks at the world’s largest automakers. Supply chain woes are at the root of the plant’s issues, with resin supplies choked off by the Texas deep freeze and shortages of a 26-cent cardboard box delaying shipments of $33 parts. When it ran out of 30-lb monofilament line used in oil filters, its procurement staff cleared local retail shelves of heavy fishing line.

A vast range of parts and materials go into a single product, and it’s vitally important for procurement and supply chain staff to know not only where those items come from, but also where their suppliers are getting their supplies. Mapping only one or two products categories or only tier-one and large tier-two suppliers is not sufficient.

Well before the pandemic, some of the worst supply disruptions occurred because OEMs ran short of low-cost commodities. While it’s appropriate to focus on spend when the goal is to reduce costs, to build a more resilient supply chain, it’s vital to look at even the most inexpensive parts and materials when they are critical to products and revenues.

 

Resilinc Annual Report 2022 - Turbulence

White Paper

Cutting-edge Insights from Resilinc's Annual Report 2022

Be Prepared with the Latest Trends and Exclusive EventWatchAI Data to Step Up Your SCRM

Download Now

Recent Posts

Critical Cancer Drugs, Other Life-Saving Medications Face Severe Shortages

Forced Labor in the Automotive Supply Chain: What Car Companies Can Do

4 Crucial Commodities to Watch in 2023

CHIPS Update: New Vision for a National Semiconductor Technology Center

Which Industries Have Been Impacted by UFLPA?

5 Ways to Mitigate ESG Risks in Your Supply Chain

Resilinc’s Q1 2023 Supply Chain Disruption Data

Introducing EventWatchAI 5.0: 100M New Sources, Near Real-Time Reporting

About Resilinc

We’re the world’s leading supply chain monitoring, mapping, and resiliency solution. Over 100k organizations partner with us to take their SCRM programs from reactive to resilient.
Request Demo

Recent Blogs

Loading...
Cancer Drug Shortages in the US
May 30, 2023
4 MIN READ
Resilinc Editorial Team

Critical Cancer Drugs, Other Life-Sav...

Cancer drugs have once again become one of the top five drugs in short supply....
Healthcare, Human Health, Supply Chain Disruptions
Forced Labor in the Automotive Supply Chain: What Car Companies Can Do
May 23, 2023
5 MIN READ
Resilinc Editorial Team

Forced Labor in the Automotive Supply...

Believe it or not, the car you’re driving around likely has parts made with forced...
Automotive, Automotive Industry
A cobalt quarry with dust clearing.
May 16, 2023
5 MIN READ
Resilinc Editorial Team

4 Crucial Commodities to Watch in 2023

Your business likely relies on raw materials experiencing significant price fluctuations or shortages. Many industries...
Commodity management, Rare earth minerals
Read All Blogs

Who's in your supply chain?

Better visibility starts now

Email Now|Call Now|Chat Now

Receive our monthly NewsWatch digest

Subscribe
Resilinc Transparent Logo

Most Trusted, Cognitive Supply Chain Risk Management Platform

Solutions

Blog

Careers

Company

  • About
  • News
  • Events
  • About
  • News
  • Events

Resources

  • White Papers & Reports
  • Case Studies
  • On-Demand Webinars
  • White Papers & Reports
  • Case Studies
  • On-Demand Webinars

Follows Us

Facebook-f Twitter Linkedin

Sales: [email protected]
Support: [email protected]
Partnerships: [email protected]

Resilinc Transparent Logo

Most Trusted, Cognitive Supply Chain Risk Management Platform

Company

  • About
  • News
  • Events
  • About
  • News
  • Events

Resources

  • White Papers & Reports
  • Case Studies
  • On-Demand Webinars
  • White Papers & Reports
  • Case Studies
  • On-Demand Webinars
  • Solutions
  • Blog
  • Careers
  • Solutions
  • Blog
  • Careers

Follows Us

Facebook-f Twitter Linkedin

Sales: [email protected]
Support: [email protected]
Partnerships: [email protected]

© 2023 Resilinc Corporation. All rights reserved.

Data Security

Privacy Policy

Unlock the Secrets of Building a World-Class Supply Chain Resiliency Program

Discover Best Practices and Proven Strategies with Our 2023 Ultimate Guide to SCRM

           Download Guide