Product category:
Microprocessors, Microcontrollers and DSPs
News Release from: Alpha Micro Components
Edited by the Electronicstalk Editorial
Team on 28 September 2004
How to combat ever increasing lead times
Managing Director Christos Papakyriacou advises on how best to cope with component shortages.
Although the news that there is a definite increase in lead-times for many electronic products and components comes as a breath of fresh air after all the doom and gloom of the recent years, lead-times are beginning to get out of hand Fabrication plants simply cannot keep up with the demand
This article was originally published on Electronicstalk on 7 Jul 2008 at 8.00am (UK)
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On the positive side, fabrication plants have now started to reach similar productivity levels that they were experiencing in the year 2000 boom.
Unfortunately the pendulum swinging back the other way means distributors will have to devise ways to combat the shortage of components.
Manufacturers have even started to reject new orders as requests are beginning to back up, pushing lead-times for products such as microcontrollers and other similar devices up to an all-new high of 20 weeks.
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There are only around half a dozen main fabrication plants in the world, which supply a whole range of components and products.
Large players in the electronics industries can avoid the problem of distribution by having their own plants, but it is the smaller franchised resellers that are being affected; these business' are often at the whim of the manufacturers.
Unfortunately orders are not always fulfilled on a first-come/first-served basis.
Manufacturers who have products in high demand can pick and choose who gets what and as with most in things in life, they will choose to service long-term customers, who have placed large orders over anyone else.
Alpha Micro Components, one of the UK's leading independent franchised distributors, has seen the electronics industry go full circle.
From over-saturation, to recession back up to high demand, and from its experience none of these stages is free from challenges.
The electronics industry is fickle, and Alpha Micro has employed some safety measures, which help us find some stability in the constantly changing industry.
Distributors should form strong relationships with a select number of manufactures.
Let them know that you are loyal to them and hopefully this in turn will secure a steady supply of goods.
Instead of placing lots of small orders with several different manufacturers and suppliers, invest in larger orders with one supplier.
Alpha Micro will place a blanket order for the year and keep a buffer stock, committing to a certain amount of products.
Although this will tie you into a particular supplier, it will also give your orders priority.
By system engineers aligning themselves to one distributor, a unique understanding can be formed.
Timescales can be shared, as well as orders and lead-times taken into account, resulting in products arriving within a reasonable time.
Lead-times and allocation is a positive sign that the electronics industry is not only recovering but going strong, which is good for all.
Planning ahead and developing good supply, distribution and manufacturing relationships is highly recommended in order to keep up with the fast pace of electronics.
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