June 21, 2022

Overcoming Supply Chain Challenges With the Right Supplier

Supply chain disruptions run deep.

Supply chain disruptions run deep across a multitude of industries — almost anyone and everyone have been impacted. While global supply chains continue to experience logistical challenges, including port closures, manufacturing shortages and more, the optical networking industry is faced with its own set of challenges as it relates to its unprecedented growth. A recent report from ResearchAndMarkets.com stated that the Global Optical Transceiver Market size was $6,144 million USD in 2020, $6,796 million USD in 2021, and expected to grow to $11,462.93 million USD by 2026. With such tremendous growth, it becomes necessary to be able to meet demands with a proactive approach to the roller coaster ride that the supply chain space has become. At Precision OT, we believe these challenges can be overcome by choosing the right supplier who creates valuable and sustainable partnerships and proactively plans and understands risk mitigation. 

Forecasting the Bends in the Road Ahead

As product lead times extend to 52 weeks and beyond, Precision OT approaches the supply chain challenges proactively. This is accomplished by dissecting and understanding the future of supply and its availability to match demand on time and with the expertise and support required by customers. 

To do this, Precision OT has maintained and strengthened its relationships with partners, making long-term commitments to navigate the supply chain landscape. As noted in this previous blog, Precision OT believes in creating these strong relationships with our Tier-1 suppliers, which enable transparency and trust along the way. 

Furthermore, a large portion of the market isn’t forecasted, leading to increased and unexpected demand for manufacturers that drives capacity issues. Identifying product lines deemed at risk for disruption, including those crucial to our customer base, as well as reviewing market opportunities via an annual forecast, has provided the opportunity to make key decisions on time and when needed. By increasing inventory levels and purchases, Precision OT is able to ensure support can be matched to the surging demand. 

Reducing Risk Along the Way

The effectiveness of risk mitigation boils down to organization-wide adoption and assistance. Choosing a supplier that mitigates risk among stock-outs and extended lead times requires a team effort across all departments. Precision OT’s Sales Team works to provide long-term forecasts, paired with our Planning Team modeling for future sales projections. On the flip side, our Product Line Management and Engineering Teams are consistently developing new and alternative solutions, while Leadership Teams enable everyone to make decisions and supply a high level of confidence to support the long-term sustainability of our supply chain.

Looking Through the Crystal Ball  — What Does the Future Hold?

While industries across the world have all been impacted by supply chain disruptions in similar manners, the market for optical networking has been tricky to track. The growth of the industry paired with Precision’s rapid expansion in market share has led to a consistent and exponential increase in demand. The market continues to grow at a strong pace with recent initiatives, such as the announcement from the U.S. Government to drive high-speed internet Nationwide, causing a growth rate that is expected to continue upward — likely at a steeper climb than previously anticipated.

All in all, Precision OT is betting on the transceiver availability in the market to continue to compress and be constrained. This only emphasizes the need for supply chain teams to remain innovative, agile, and proactive. Even as the stress of shortages and disruptions continue to keep a stronghold on the world, there’s a solution: steering clear of complacency, and looking through a long-term lens for planning purposes, all while continuing to meet customer demands. Contact Precision OT today to learn how we can support your networks for the future!

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