By John Sheehan

An old proverb begins: “For the want of a nail the shoe was lost,” then goes on to describe how lack of the nail caused the death of a horse and a rider which snowballed into the loss of a battle and a kingdom. Not surprisingly, this proverb exists in multiple languages and has been attributed to multiple lost battles. The challenge for electronics manufacturing services (EMS) providers is similar. On the one hand, EMS companies are motivated to minimize inventory since it represents cash, particularly if it exists in “wait state”. On the other hand, shortages also cause costs in terms of personnel time spent expediting parts, rescheduled production and missed deliveries. On the customer side of the equation, missed deliveries can translate to lost sales.