Managing Our Supply Chain to Address “Just in Case” Scenarios
We take a lot for granted in how businesses and their supply chains work. Covid-19 has taught us that much has changed and it has been an interesting ride watching the world adapt. Amino is no exception. We saw production shut downs globally, long lead times for components and uncertainty of business consumption. Amino learned from this experience and is primed to fulfill delivery even if there is a surge of the virus.
What steps have we taken to ensure our ability to support you, our valued customers?
- Migration of manufacturing to Thailand. Why is this important? In the US, any product coming from China comes with a 15% tariff that gets passed on to the operator. By moving production out of China, that tariff is not an issue. Also, by having multiple manufacturing locations, we reduce dependency on a single factory if there is an issue specific to that area. I’m mindful that it is not just about the virus but cataclysmic events can happen (as we have seen in the past how an earthquake can disrupt a factory for months bringing production to a screeching halt). Amino wants to ensure we have multiple locations – just in case.
- It is also not just about the final product. Each set-top box is made up of thousands of components, each of which come from different factories. Any shut down impacts the end product. We have seen lead times grow during these trying times and we are working to manage that. Practically overnight, Amino saw lead times of our main CPU go from 18 to 26 weeks while lead times for other components nearly tripled. Amino is working closely with our partners to make certain we have ample supply of material – just in case.
- We are working more closely with our distribution partners to ensure they have stock of the right products at the right time. We communicate weekly to help them safeguard against a global shut down by having the right product mix available today and in the future. It is this iterative process of sharing market conditions, operator demand and supply chain performance that allows Amino and its distribution partners to fulfill operator expectations. We all recognize that television consumption has gone up as more people are “stuck” at home. That means operators must be ready to provide service to their consumers and have the products that meet that demand – just in case.
Every aspect of this chain is vital and the management and control which Amino have over it has been instrumental in ensuring that our customers have had continuity of supply throughout the current crisis. It starts with sourcing the components inside the box, continues by communicating with customers and distribution partners as market conditions change and is completed by fulfilling stocking requirements that allow operators to provision set-top boxes to their subscribers as needed.
This blog is the first in a series highlighting the importance of the managing supply chains and distributor relationships.
Director of Product Management