Plexus Corp. (NDAQ:PLXS) | Materials & Supply

Raw Materials Plexus typically purchases raw materials, including printed circuit boards and electronic components, from manufacturers and distributors. In addition, under certain circumstances, the company will purchase components from brokers, customers or competitors. The key electronic components the company purchases include specialized components such as application-specific integrated circuits, semiconductors, interconnect products, electronic subassemblies (including memory modules, power supply modules and cable and wire harnesses), inductors, resistors and capacitors. Along with these electronic components, the company also purchases components used in manufacturing and higher-level assembly. These components include molded/formed plastics, sheet metal fabrications, aluminum extrusions, robotics, motors, vision sensors, motion/actuation, fluidics, displays, die castings and various other hardware and fastener components. All of these components range from standard to highly customized and vary widely in terms of market availability and price. Occasional component shortages and subsequent allocations by suppliers are an inherent risk of the electronics industry. Components shortages have been an issue for the industry and for Plexus in fiscal 2010. The company actively manages its business to try to minimize our exposure to material and component shortages. The company has a corporate sourcing and procurement organization whose primary purpose is to develop supply-chain sources and create strong supplier alliances to ensure, as much as possible, a steady flow of components at competitive prices. Plexus also has a global expediting and escalation process that provides the company the ability to effectively track and manage component shortages. Since the company designs products and therefore can influence the selection of components used in some new products, component manufacturers often provide us with priority access to materials and components, even during times of shortages. Plexus has undertaken a series of initiatives, including the use of advanced supply chain solutions to improve continuity of supply and supply chain flexibility.