How Apex Leaders Supported a Private Equity Supply Chain Challenge
Global microchip shortage affects business
Apex’s client, a lower middle market private equity (PE) firm, approached Apex Leaders for help with a microchip shortage affecting its portfolio company, a leader in quick-turn PCBA and on-demand manufacturing. The firm needed support navigating a supply chain private equity challenge and wanted to connect with an experienced industry advisor who could help address the immediate sourcing issue while informing a longer-term strategy.
What about this industry caught our client’s attention?
Microchips make modern electronics work. The electric circuits of the tiny devices are needed to fuel devices across industries, including cars and smartphones. According to a survey from the U.S. Department of Commerce, demand for microchips was up to 17% higher in 2021 compared to 2019. The survey found that inventory fell due to supply chain disruptions during that time. The result is a high-demand, low-supply market for microchips.
Identifying the right supply chain advisor
Apex’s process starts with a comprehensive intake call. During this call, the PE Client expressed interest in connecting with current leaders of a leading global electronic components distributor. Apex also suggested contacting former employees of the microchip distributor. By connecting with both current and former employees, the PE firm and its portfolio company would be able to gather a range of insights from an expert advisor which include potential strategies to resolve the parts shortage with the existing supplier, understanding the supply chain challenges more fully, and formulate a longer-term strategy for supplying these critical components.
Connecting PE firms with supply chain expertise
With the criteria in hand, our research team identified and vetted potential advisors. As an expert advisor network that specializes in PE, the Apex team has a wealth of knowledge and experience in the industrials sector and has built strong relationships with executives and operators in the space. Leveraging this knowledge and its vast network, Apex introduced the PE firm and portfolio company to a retired senior executive of the requested company as the best candidate as an expertise consultant for their supply chain issues.
After Apex connected the Client, the individual was able to make additional introductions within the supply chain, significantly improving the portfolio company’s dialogue around fulfillment of the critically needed parts.
Supply chain support leads to sourcing success
Through collaboration with the supply chain operator, our Client’s portfolio company mitigated its urgent sourcing challenge and obtained valuable input to help inform its longer-term sourcing strategy.
Helping clients grow their portfolio companies
At Apex Leaders, we go beyond a traditional expert network. Instead, we support our clients throughout the investment lifecycle – exploration, evaluation, and post-acquisition. Our expert network services extend to your portfolio companies at no additional cost as part of your partnership with us. We use the same bespoke process to match management teams with expert advisors who can provide key insight and can assist in developing growth strategies to increase value.