Unlocking supply chain ‘intense’

It’s not just heavy industries such as automotive manufacturing that have felt the sting of the ongoing supply chain crisis, but tech startups as well.

The pain is particularly acute for tech companies that use certain types of circuits and microchips, said participants in the Making Physical Products with Part Shortages roundtable discussion Monday at Boulder Startup Week.

“We’ve gone through supply chain shortages in the past,” mostly due to one-off incidents related to geopolitical issues or natural disasters, Zebulon Solutions LLC lead electrical engineer Todd Hochwitz said. But the COVID-19 pandemic has ushered in a supply-chain disruption that is “unprecedented.”

The competition between startups gunning for similar types of component parts has “gotten really intense,” Zebulon director of operations Jenney Loper said, forcing companies to devote increasing amounts of resources to sourcing and inventory management functions.

Panelists Monday suggested an aggressive approach to materials sourcing.

“If you see parts, don’t assume they’ll still be available in six months,” Loper said.

If parts are available, Hochwitz said, buy as many components as is feasibly possible. Companies, he said, can always attempt to resell what they don’t use.

Bigger companies with strong economies of scale often get the first bite at the sourcing apple, so startups must be patient, experts said.

“If you’re a little fish in a big pond, you’re probably not going to get your allocation when you expected it, ” Zebulon supply-chain manager Teresa Neeley said.

Relationships with components manufacturers and brokers become increasingly important as the supply chain constricts.

“Some brokers are reputable and some are not,” Hochwitz said. Less than scrupulous brokers “may be taking advantage of the supply chain and making as much money as they can these days.”

Neeley encouraged startups to scrutinize the components they’re sourcing.

Get pictures of the parts and packaging, as for copies of certifications and business licenses, and request warranties, she recommended.

Local supply-chain partners are often more reliable as they require return business from local operators, experts said.

“Don’t go to Amazon,” Neeley said. “I mean, you can if you really want to, but I wouldn’t trust it.”

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