Cable and connector supply chains face disruption
It’s no secret that bottlenecks and post-pandemic demand spikes are converging to strain fragile supply chains. Numerous news stories describe the problems facing some of the world’s largest ports and what companies are doing to overcome them.
Unfortunately, the cable and connectors industry is no stranger to the effects of disturbances. Electronics manufacturers and other industrial companies rely on cables and connectors for various products, but how to maintain production efficiency if the supply chain turns out to be inefficient and unstable?
Due to the pandemic, consumers were spending long periods inside their homes, driving demand for consumer electronics like game consoles, smart TVs, tablets and more. The evidence shows that the sector could not meet this demand. In 2020, the electronics industry entered a slump, with a market contraction of 3% compared to the previous year, according to Statista.
While the sector is on track to recover, its supply chains are still lagging behind. Major factories and ports around the world are to suspend manufacturing and close periodically due to rising Covid-19 cases. In just a few days, these temporary suspensions have dramatic effects on production.
Some members of the cable and connector supply chains have been caught off guard by supply chain issues. Others have taken proactive steps and anticipated future challenges by purchasing larger quantities of raw materials to maintain production consistency. However, this approach contrasts with the increasingly popular “just-in-time, built-to-order” pipeline model that many companies have focused on over the past two decades.
Many manufacturers have also been forced to make digital transformations, adopt new and emerging technologies to improve processes. For example, the Industrial Internet of Things and artificial intelligence dramatically improve supply chain visibility, reduce errors, and facilitate data processing. But these technology investments go no further and cannot be a one-size-fits-all solution to supply chain disruptions. Take a closer look at five of the challenges cable and connector supply chains are currently facing.
1. Labor Shortages
Major players in the cable and connector industry would agree that it is very difficult to find skilled workers in this job market. According to the latest data from the American Chamber of Commerce, there are 10 million jobs and 6 million unemployed in the United States
If every unemployed person had a job, the remaining 4 million jobs would remain vacant. Companies working internationally could face a shortage of workers in other countries as the global economy becomes increasingly connected. Labor shortages could cost Germany 86 billion euros annually.
2. Natural disasters
Some parts of the world are already experiencing the adverse effects of climate change. Natural disasters are becoming more frequent and intense, causing more damage to communities and exacerbating current supply chain issues.
Consider Category 4 Hurricane Ian which made landfall in Southwest Florida in September 2022. The area is still recovering from the devastation, including local telecommunications companies such as Comcast. According to the Comcast Florida website, some of the recovery and restoration efforts completed to date include:
- Replacement of more than 26,000 branch lines
- Restore power and repair 26 hub sites
- Replacement of 7,000 spans (more than 400 miles) of its network
It is a daunting task for these workers to get the network infrastructure back up and running. Some companies may need to prioritize supporting these communities before caring for their other customers. In addition, blocked roads and lack of electricity completely block the delivery and production of materials. Ongoing harsh weather conditions are disrupting the supply chain by forcing factories to close and making transportation longer than expected or impossible.
3. Shortages of raw materials
As mentioned above, raw materials are scarce. While many industries are struggling with low inventories of necessary parts and materials, the success of many markets is highly dependent on products from the cable and connector industry. In other words, many other sectors will not be able to meet increased demand without cables and connectors.
There are many types of cables and connectors with various use cases and applications. Some types are better suited to specific applications – for example, bespoke control cables are better suited to any product that is subject to tensile loads.
However, it can be difficult for a company to get their hands on these custom cables due to an inefficient supply chain. One solution would be to ensure that all cables currently in use are coated to protect cable assemblies from corrosion. Maintaining used ones and ordering replacements before they wear out will prevent downtime in the event of a production delay.
4. Shipping container issues
Almost all products in the market are packed in a shipping container for transportation. Although shipping containers are simple, they are a hot commodity right now.
Containers keep the supply chain moving, but only if they are unloaded and loaded efficiently. Unfortunately, major ports are overwhelmed with containers and lack the power to load and unload.
Shipping containers are left where they shouldn’t be, and in some cases freighters are so late they can’t wait for new containers to be loaded on board. Loading can take days or even weeks. As a result, ships choose to depart an avalanche of empty containers in congested ports, rendering them useless.
5. International issues
No country was immune to the effects of the global pandemic, which means the United States is not the only region facing economic and supply chain issues. Additionally, the impact of the war in Ukraine is deteriorating the stability of the global supply chain.
Russia’s penetration into the semiconductor market will undoubtedly have an impact on the cable and connector industry. The war will have far-reaching implications for any industry that depends on cables and connectors, as well as others that depend on international suppliers.
This list is not exhaustive ; many other challenges impact cable and connector supply chains. However, these five challenges could continue into 2023 and beyond.
Take on the challenge
Supply chain issues tend to level off after significant global events, but disruptions make it difficult for businesses in all sectors to operate effectively. Cable and connector companies are well aware of supply chain disruptions affecting their operations. They must keep others in their supply chain informed, adopt new technologies and develop new mitigation strategies to overcome these ongoing challenges.