Dipak Patel (below), was the joint founder of Union Four Electronics in 1995, selling the business to OSI Electronics in 2016. Along with Briton EMS, which OSIE bought in 2013, it is now OSI Electronics UK – Dipak, originally Purchasing Director, has recently taken up the corporate role of Global Supply Chain Director.*
“The OSI group has a $120m+ budget for purchasing components,” said Dipak. “It is a near billion dollar, cash-rich business (2017 sales were $961m) and is in a position to mitigate current market conditions in electronic component supply.
“To benefit from being part of a very large CEM / EMS, we’re moving away from individual companies within the OSI group purchasing components autonomously.
“Instead, we’re working as team players to buy with the power of the big purchaser,” he emphasised.
The current substantial growth for electronics in the automotive, industrial, mobile and consumer markets, as well as the IoT boom, have all contributed to the surge in demand now directly affecting the shortage of electronic components worldwide.
“Much of the supply problem is down to a lack of capacity among the component manufacturers and their franchise operations, particularly those who came out of the recent economic slowdown with excessive inventory and who didn’t, or weren’t able to, invest to meet the demands now being placed on them,” said Dipak.
“With lead times of 30 to 40 weeks and more on some basic commodity parts, including capacitors and resistors, ensuring there is enough production stock to meet orders is a challenge, especially for small EMS companies.”
A global business
“While local knowledge and supply will continue to play an important role, my colleagues can see the worldwide supply situation and the individual buying needs of the OSI offices in the Americas, Asia, the Far East and Europe, allowing them to tap into the global supply chain and move us up the supply queue across the world,” reports Dipak.
“To make this work, we’re lining up component manufacturers’ part numbers – which can differ by territory – and placing orders of sufficient value for them to be shipped to different OSI units. There’s no internal mark up, giving us a critical cost advantage.”
“Of course, this takes a lot of planning and cooperation, but the benefits to our customers are enormous,” he said. “We’re reducing risk by building stocks of high usage parts to guarantee supply, working with customers to analyse their long term requirements and forward buying on their behalf to secure stocks, including metalwork and plastic mouldings.
“Yes, there is light at the end of the tunnel – although it’s a long tunnel. Continuity of supply of quality components has to be a given for any EMS operation. Volume purchasing of common parts, whether for free stock or allocated stock, is no longer a local matter.
“Having a significant spend on supplies gives our customers the benefit of working with a local EMS which has the financial might of a global buyer.”
OSI Electronics UK is a subsidiary of Californian based OSI Electronics.
* Iain Taylor is now responsible for OSIE UK purchasing.
Posted 15 January 2019