Wire Processing: A Growing Industry with Hidden Risks

Introduction: The Wire Processing Industry

The wire processing industry is undergoing rapid transformation, driven by automation in high-growth sectors such as automotive, aerospace, telecommunications, and medical devices. From crimping and cutting to harness assembly and testing—as demand for wire processing precision and reliability increases, so too does the complexity of managing global supply chains, component lifecycles, and regulatory compliance.

Yet, while many manufacturers focus on scaling operations, they often overlook the strategic risks that accompany growth—risks that can erode margins, delay product launches, and compromise long-term competitiveness.

Just-in-time manufacturing, once a competitive advantage, now exposes companies to severe risks when components are discontinued without notice or delayed due to geopolitical tensions, semiconductor shortages, or logistics disruptions. These challenges often force rushed redesigns, missed production targets, and inflated procurement costs.

At the same time, escalating raw material prices (automotive PPI increased by 8.7% between 2020 and 2022) and emergency sourcing inflate costs—sometimes by up to 100x—while manual procurement processes and lack of predictive analytics hinder cost control and operational efficiency. Companies are caught between overstocking, which ties up capital, and under-ordering, which risks catastrophic stock-outs.

Design teams face growing vulnerability as they unknowingly select soon-to-be-obsolete components, triggering costly redesigns and compliance setbacks. In regulated sectors like automotive, aerospace, and medical devices, failure to anticipate part obsolescence or equipment failure can lead to unplanned downtime, safety risks, and regulatory non-compliance.

Moreover, compliance with international standards such as IATF 16949, AS9100, and ISO 13485 is non-negotiable. Yet, many organizations still rely on manual tracking, increasing the risk of audit failures and production delays. As the industry moves toward smarter, connected manufacturing, integrating AI, IoT, and big data into legacy systems remains a slow and costly transformation.

To remain competitive, wire processing companies must address these cracks—supply chain volatility, cost pressures, design vulnerabilities, and compliance gaps—by embracing proactive, data-driven strategies that ensure resilience, efficiency, and regulatory alignment.

Where the Cracks Are Forming: Industry Pain Points

1. Supply Chain Volatility

• 37% of discontinued components are withdrawn without prior notice, leaving no opportunity for Last Time Buys (LTBs).

• Geopolitical instability, export restrictions, and supplier shutdowns introduce unpredictable disruptions.

• Production delays result in contractual penalties, lost revenue, and reputational damage.

2. Cost Pressures and Procurement Risk

• Rising raw material and logistics costs are squeezing margins (PPI 2020 to 2022: + 8.7%).

• Emergency sourcing can multiply procurement costs by up to 100x, while increasing exposure to counterfeit and non-compliant parts.

• Over-ordering due to uncertainty leads to excessive stockpiling, tying up capital and inflating CAPEX.

• Under-ordering risks catastrophic stock-outs and missed delivery commitments.

3. Design Vulnerabilities

• Many companies fail to track component lifecycles, unknowingly selecting high-risk, soon-to-be-obsolete parts.

• R&D teams are forced into reactive redesigns, diverting resources from innovation, causing market share losses up to $100 million.

• Redesign project costs can range from $30,000 to over $7 million, depending on complexity and regulatory impact.

• Supply chain, compliance, and obsolescence risks along with prices are rarely considered in the design phase of a new product—which can be easily done.

4. Compliance Gaps

• Regulatory frameworks such as EU MDR and 21 CFR 820 demand rigorous quality, traceability, and change control. However, many companies still struggle to integrate these with broader ESG and environmental compliance initiatives.

• As companies rush to source replacement components, the risk of counterfeit or non-compliant parts increases—potentially compromising product safety and regulatory standing.

• Without a structured PCN/PDN management system, unnoticed component changes can compromise product reliability and lead to non-conformance during audits or inspections.

Strategic Response: Building Resilience Through Proactive Lifecycle and Supply Chain Intelligence

1. AI-Driven Supply Chain Risk Assessment 

• Predict obsolescence and geopolitical risk using real-time analytics.

• Diversify sourcing strategies to reduce single-supplier dependency.

• Strengthen quality assurance to prevent counterfeit infiltration.

2. Smarter Sourcing and Inventory Planning 

• Use big data to identify cost-effective, reliable suppliers.

• Automate LTB planning to balance continuity and capital efficiency.

• Establish smart safety stock, based on part criticality and S&OP.

• Monitor supplier stability and lead-time volatility via risk dashboards.

3. Lifecycle-Integrated Product Design 

• Predictive Maintenance: Leverage tombstone charts to anticipate End-of-Life (EOL) trends and combine redesigns into single conscious mitigation efforts.

• Embed lifecycle intelligence into cross-functional design processes.

• Reduce redesign frequency and cost through proactive component selection.

4. Compliance-Ready Systems

• Automate documentation for standards like IATF 16949, AS9100, and ISO 13485.

• Use AI to flag high-risk components in the Bill of Materials (BOM).

• Conduct lifecycle cost analysis to ensure long-term design viability.

Conclusion: From Reactive to Resilient

For companies like Komax and others in the wire processing ecosystem, the cost of reactive operations is rising—both financially and strategically. However, with the right tools, data intelligence, cross-organizational strategy, and foresight, manufacturers can shift from firefighting to future-proofing—positioning themselves for success in the era of Industry 4.0.

At Horlebein Consulting, we help organizations implement proactive product risk management strategies that reduce redesign costs, mitigate procurement risk, and ensure long-term compliance and competitiveness.

Is your company ready to take the next step?