the Circuit

the Circuit

Allocation Programs

Right now, we are seeing many products in short supply. What are the driving factors? Higher demand, shipping delays, labor shortages, power shortages in China, inflationary pressure, plastics shortages and more. As a result many manufacturers are taking steps to manage demand by implementing allocations.

What?

Basically, when a manufacturer is struggling to keep up with the demand of the products they produce, they may choose to place their supply network or distributors on allocation. This means that they are limiting their distributors on the amount of product they can buy from the manufacturer.  Allocation programs place safeguards on products in high demad to create stability of supply, getting as much product as possible to as many distributors as possible, as quickly as possible.

why?

The reason they do this is to create a fair and equitable distribution of their products across their distribution channel. In other words, they are not going to play favorites or allow certain distributors to buy up all the product while leaving other distributors with nothing. Allocations also help protect against hoarding and price gouging of limited products.

how?

Most companies employ an allocation program that uses an algorithym to determine who gets what and when.  These programs use many different factors to make those decisions: Previous purchase history, product demand, and market trends are just a few factors.  Predicting product trends more accurately allows manufacturers to divert more product to the locations where there is the most demand.

our role

Our role in supporting and protecting the supply chain only becomes more crucial and we are prepared to navigate the unique challenges in partnership with our suppliers.  We are continually placing orders and monitoring the situation.  We are working hard to find additional suppliers to fill the gaps.  Once product is received it will be processed on those with backorders.  We appreciate your understanding and continued support during these challenging times. 

For any questions regarding your outstanding order, please contact your account manager.