Has It Really Been Survival Mode?

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In the face of an ever-growing electronics demand, our experiences from 2020 onward with rapid constraints in supply, and unexpected demand fluctuations, EMS companies face a more limited ability than we are accustomed to quickly adjust incorrect component mixes and respond to shortened component lifecycles. Add to that the need to carefully approach the addition of very expensive capacity. We end up repeatedly answering the same set of questions, every day, for every job in our queue:

• Which parts are short?
• Where can I find them?
• Is the channel I found “safe?”
• Can I afford to do it?

While things have improved in the past few years, there is no sign we will return to pre-pandemic stability. Component lead times feel much better but are still well beyond pre-pandemic levels. Manufacturers are still building largely to customer orders as opposed to building to stock. This article will examine how these trends from 2020 have matured and stabilized or continue to change and evolve.

Supply Continuity Has Never Been More Critical

Time-to-market and product availability are essential. To meet our own delivery schedules, our suppliers must have a reliable and available supply of the needed components. Disruptions continue to be more frequent than ever before, so a supplier who makes the EMS company’s job easier is likely to receive the first chance at parts orders. Conversely, under these conditions, suppliers can be more selective about which customers receive the most responsive service. These customers are the accounts that exhibit the “best” long-term opportunities for the supplier. So, how do you become the first order they ship?

To read this entire article, which appeared in the June 2024 issue of SMT007 Magazine, click here.