By Surendran Chittiar, Director of Product Distribution, Texas Instruments
As demand for electronics increases, procurement professionals continue to expect semiconductor suppliers to provide a reliable and steady supply of products. To meet these demands, semiconductor manufacturers use automation and strategic inventory management to prioritise speed, flexibility, and efficiency.
Reliable, timely delivery is the most important link in today’s modern semiconductor supply chain. Choosing the right supplier matters when shipping products. Design engineers need suppliers who can provide immediate access to small quantities of integrated circuits for development and testing, but who can also quickly fulfill production quantities that could be billions of units per month – plus everything in between. Procurement professionals want greater flexibility to choose from broad portfolios of cost-effective products in industry standard packages that meet design requirements.
Placing distribution centres closer to customers
Closer proximity of distribution centres to customers’ production and design sites plays an important role in accelerating delivery times to meet tight schedules and keep production lines running more efficiently. Companies such as Texas Instruments (TI) are building inventory and storing products in highly automated distribution centres in multiple countries, while focusing on faster delivery and streamlined processes to make it easier for customers to source and purchase parts.
Strategic inventory management enables semiconductor suppliers to streamline the procurement process from order placement to final delivery with greater control and flexibility. In TI’s case, we can pick, pack, and prepare orders for shipment in 15 minutes or less, which enables the company to respond quickly to urgent needs and help customers avoid costly delays. This turnaround time on orders builds trust with customers who depend on a reliable and responsive supply chain with fewer disruptions, less downtime, and the ability to meet changing market demands.
A global network of distribution centres helps secure supply by helping ensure the quick and efficient delivery of semiconductors in every region. For example, a new distribution centre near Frankfurt, Germany, allows our European customers to receive the products they need in two days or less, furthering our ability to provide faster, more convenient access to the components customers need.
But we understand that securing the supply chain is just part of the solution. In addition to investing in inventory management, TI’s investments in internal manufacturing help secure an essential supply for years to come. We are continually expanding our in-house production capabilities to better meet the growing demand for semiconductors. Increasing internal capacity makes our company more resilient when facing global supply-chain disruptions.
Semiconductor companies with internal manufacturing facilities are able to better maintain control over the production process from start to finish, allowing their customers to receive products faster. For procurement professionals, this means a more consistent, reliable supply chain.
Visibility into available inventory
Additionally, the convenience of purchasing semiconductors online continues to improve. While customers have always had the option to purchase through distributors, buyers now have even more options for placing their orders directly with manufacturers, whether that’s directly online or through an API integration that seamlessly connects with their own procurement systems. This accessibility gives designers and buyers more control, flexibility, and access to immediately available inventory and product and order information.
Buyers today also have more ways to automate how they source their products, including accessing realtime information about inventory, package types, pricing and parametric details through APIs. By connecting their own enterprise resource planning systems directly to TI, many customers save significant time and effort because they can track inventories across multiple orders and locations. This automation makes it easier to the get the products they need, exactly when and where they need them.
Developing a more resilient supply chain
The semiconductor supply chain is evolving to meet increasing demand for more electronics. And semiconductor manufacturers such as TI continue to improve their innovation in distribution, internal manufacturing, and online ordering capabilities to meet this demand. Product distribution centres strategically placed closer to customers further strengthen the supply chain, enabling semiconductor buyers to confidently plan for the long term. The result is a faster, more flexible supply chain, capable of weathering the complex challenges of an ever-changing environment.
This article originally appeared in the November issue of Procurement Pro.