Salmon are fascinating creatures in that that they are created with an inherent instinct to defy the natural order. In a world where common sense and logic nudge all forms of life toward the path of least resistance, salmon insist on swimming upstream against the current, willfully ignorant of the fact that that just turning the other way will make their day-to-day far easier. Watching them kick and jump and flop over a waterfall is truly one of nature’s wonders.

But having said that, if you are seeking inspiration on how to manage your Supply Chain, a salmon is the last thing you should look at. Everyone likes an underdog, the classic story of finding success against all possible odds, but relying on raw faith and perseverance when making decisions regarding the lifecycle of your products is a recipe for disaster. The most successful supply chains are founded on pillars of accuracy and efficiency – both of which only increase in importance when the state of the market is not in the OEM’s favor.

All one needs to do to understand the bleak outlook of the market is look at the automotive and IoT industries. While vehicle production has always been a key driver of component demand, for example, the excitement surrounding the new wave of electric-powered cars and SUVs has risen far above even the most modest expectations – and the effect on component suppliers has been profound. A traditional combustion vehicle requires approximately 3,000 capacitors; an electric vehicle, by comparison, with additional needs required to maintain display systems, LED lighting, sensors and artificial intelligence (AI) features, can require as many as 22,000 capacitors. Factor in the fact that electronic vehicle manufacturers such as Tesla are expected to increase annual production to 2.4 million units by 2021 and a whopping 125 million by 2030, OEMs are understandably concerned about their own ability to source components. Prices are inflating to all-time highs, orders are being placed on allocation for as long 52 weeks or longer before even hitting the open market, and suppliers’ continuing struggles to increase production capacity indicate that things are going to get worse before they get better.

Despite all of this, and the industry’s awareness of these issues, too many OEMs still insist that the best course of action is to maintain a reactionary approach to their supply chain, acquiring critical electronic inventory as it’s needed instead of purchasing the necessary quantities on the front end with a last time buy. They are insisting on swimming upstream, accepting the consequences such an approach brings – inflated third-party vendor costs, increased possibilities of acquiring counterfeit components, delayed productions, even potential premature product discontinuations. This is simply no longer a model that invites optimism.

The role of the last time buy has changed in today’s market. Instead of being a last resort only considered on receipt of a PCN (assuming a PCN is issued and seen), last time buys have evolved to be one of the key attributes of a successful supply chain. Acquiring inventory on the front end in a large single order not only creates leverage with suppliers to negotiate bulk purchases, but allows the OEM to bypass nearly all potential disruptions a component shortage can bring. It doesn’t matter if the component approaches obsolescence prematurely or is placed on extended allocation; if the inventory is already in hand, the only concerns left remaining are the potential loss of working capital, and the OEM’s ability to securely store and fulfill it – both of which can be easily addressed. With supply chain partners now offering customers cutting-edge, customized solutions designed to alleviate these concerns, the decision of whether to build your supply chain around last time buys becomes hardly a decision at all. It’s a no-brainer.

We call them downstream revenues for a reason. If you are always fighting to go back upstream, you’re swimming the wrong way! Securing the lifecycles of your products with last time buys is the only way to turn the market currents back in your favor.