Is Consolidating your Supply Chain the Right Move for Your Company?

In these unprecedented times, the microscope is on procurement managers to deal with rapidly evolving changes in the supply chain. Longer transit times and increased freight costs, coupled with the recent trend of rising component prices and a constrained supply of parts are undoubtedly causing stress for buyers and commodity managers. With most of these factors affecting their bottom lines, OEMs need to see maximum efficiencies from their purchasing teams. Avnan can help customers achieve these goals by offering a simplified supply chain.


Diverse Electronics Portfolio

Electronics parts used by OEMs aren’t just limited to printed circuit board assemblies (PCBAs). The finished product likely uses power cords, wire harnesses, switches, and relays. Many HVAC systems may also incorporate transformers, sensor assemblies, metal parts, and heating elements.

This can translate into having to manage at least half a dozen suppliers, each coming with their own supply agreement to administer, possibly scattered across multiple geographies and time zones.

On top of that is the effort the organization needs to expend to manage supplier quality with multiple vendors.

It’s no wonder that companies are searching for ways to consolidate their vendor bases. But it’s not common for an electronics supplier to support even two of the above-mentioned commodities, let alone all of them. That’s where Avnan comes in.


Avnan’s Advantage

Avnan offers a conduit to a diverse range of seemingly unrelated product types, which in reality end up all getting connected together in the final application. By understanding how all these parts interconnect, Avnan can immediately assess if changes to one product would have a bearing on the other one, saving the OEM the effort of being in the middle of conversations with two suppliers.

This can also uncover cost reduction opportunities. By manufacturing both a control PCBA and the mating wire harness, Avnan can break away from high-cost, brand-name connectors and suggest lesser-known, lower-cost parts that are equally reliable. Further cost reductions are achieved by the fact that one manufacturer is now buying twice the volume from a family of connectors than a stand-alone PCBA contract manufacturer would, resulting in significant component cost savings.

Avnan also has facilities in multiple geographies capable of manufacturing the same part. We offer the flexibility to meet our customer’s needs because of our global reach. So, if a particular country of manufacture becomes less appealing for whatever reason (e.g. tariffs), Avnan can seamlessly shift production to another location, saving the customer the headache of finding a new source.


Streamlined Communications and Operations

Communicating with a local supplier in addition to offshore manufacturers can be a huge drain on a buyer. Late-night calls/emails on top of a full day of work can be a recipe for burnout. Having one point of contact in North America, managing communications with factories all over the world, frees up the OEM’s purchasing department.

With Avnan’s local presence at the factory’s geography (boots on the ground), delivery and quality performance are constantly monitored behind the scenes, setting the customer’s mind at ease.

Consolidating the supply base also can simplify operations on the manufacturing line. Avnan can provide kitted assemblies (multiple parts already interconnected) to shift assembly effort and costs to a lower-cost model.

What’s the next step?

Scheduling some time with the Avnan team to discuss your overall product architecture will help identify the essential components and electronic parts that Avnan specializes in. If we can offer you cost savings and improved efficiency with your process, we will present you with these opportunities.

Let our experts at Avnan come up with consolidation and cost-reduction ideas that will save your organization time and money.

Contact us to learn more.

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