The production of electronic components is a capital-intensive venture. Likewise, the industry is also fast-moving, with new product introductions and obsolescence notices a daily, if not hourly, occurrence. Thus, until supply chain AI reaches critical mass, the industry will always be plagued by ‘cycles’ of supply and demand mismatch. In fact, if the cycles are sinusoidal, the amount of time supply and demand are perfectly matched is infinitesimally small.
Naturally, the sector has designed solutions to smooth the waveform, from forward bookings and stock holding to allocation and price flexing. However, every component group (if not every individual component) has its own wave form, all slightly out of sequence. It’s what makes supply chain management such an interesting role.
On this subject, since the beginning of 2024 I’ve received plenty of opinions about how the industry is finally settling down after the pandemic years and entering a ‘new normal’. However, it doesn’t look like the new normal will be the same as the old normal. The consensus is a persistent underswell of unpredictable disruption.
I was wondering how to measure this until I went shopping for some goods, including electronic products. What I discovered was a surprising lack of availability.For example, I needed to upgrade my web cam for Zoom calls. At one large retailer, about half the products listed were available for same day deliver, 25 per cent were available but delayed and the remaining 25 per cent were unavailable. Unusual.
Looks like the soothsayers might be right.
Original source: Jon Barrett: www.electronics-sourcing.com/category/jon-barrett/
