Utilizing Large Contract Buyers Helps Wire Harness Manufacturers Navigate Nylon 6/6 Shortages

The practical applications for Nylon 6/6 are incredibly vast today, more-so than when it first rose to prominence during 1940s wartime. While this has been great for the advancement of innovation, it has resulted in its demand to increase and its supply to correspondingly decrease.

What Is Causing The Shortage?

Manufactured in four high-volume plants – three in the U.S. and one in France – Nylon 6/6 is primarily used when high mechanical strength, great rigidity, and good stability under heat is required. While markets for Nylon 6/6 include industrial applications, power tools, and cable ties, most of it goes into auto applications. This can include air intake manifolds, ball bearing cages, bushings, gears, electrical components, oil pans, and other various machined parts and under hood components. But perhaps most prominently, Nylon 6/6 is the material that makes up most airbags.

This is notable because safety regulations and standards are becoming increasingly more stringent and widespread. With no signs of that trend slowing down, the need for Nylon 6/6 will increasingly become that much greater. And because the global economy has been recession-free for nearly a decade, car production is booming. Demand for Nylon 6/6 has never been greater.

Unfortunately, production of it is struggling to keep up. Demand for it is growing at the same time the world supply is decreasing, and OEM customers who are standardized on it may experience spot shortages. As a result, wire harness manufacturers need to prepare and act to protect their core business. The best way to do this is to partner with large contract buyers.

Large Contract Buying Vs. Spot Purchasing

Large contract buying is one of two traditional methods for obtaining Nylon 6/6. It’s where companies – like Panduit – contract with companies to guarantee them a percentage of their business and in return they get a guaranteed contract price and continuity of supply. So if a disaster or accident decreases the supply further, large contract buyers go to the front of the line for the remaining supply when there is an allocation.

At the back of the line and potentially without supply? Those using the other method of obtaining Nylon 6/6 – spot purchasing. This method is used by those requiring smaller amounts of the material.

With spot purchasing, cable tie manufacturers are reaching out to their suppliers to conduct one-off purchases. This allows for manufacturers to shop for the best price at any given time and keep that supply stored. This can be advantageous in a long market because the plants have capacity that needs to go somewhere, so they attempt to get what they can for it. However, in a short market, spot purchasers are at an extremely high disadvantage and may be unable to get Nylon 6/6 if the supply runs out.

Breaking down both strategies is a risk mitigation exercise. When supply is low, companies and large contract buyers like Panduit will get their Nylon 6/6. Spot purchasers? Potentially not. Not to mention, the market doesn’t dictate the price of large contract buyer supplies like it does for spot purchasers. While their price is not completely fixed, large contract buyers are more reliably low than spot buyers.

What Can You Do To Ensure You Don’t Experience An Interruption?

It’s no secret that the supply chain of Nylon 6/6 is under extreme pressure. But this bleak forecast doesn’t need to be a cause for concern for wire harness manufacturers who partner with wire management solutions providers that use a dependable long-term logistics model. Utilizing the services of large contract buyers like Panduit, wire harness manufacturers can ensure the supply of Nylon 6/6 won’t affect the productivity of their business and that prices won’t wildly fluctuate on the products they need.

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