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www.us-tech.com
September 2023
Sourcing Electronic Components Post-Pandemic
By Del Williams
chain for electronic components in the rear-view mirror, the mar- ket is finally beginning to stabi- lize. For the past three years, manufacturers found many criti- cal electronic components hard to come by, watched as prices skyrocketed and lead times ex- tend to almost a year in tradi- tional distribution channels. Thankfully, much of the
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dust has settled, but the work has only begun. With hard- earned lessons from the pandem- ic, many manufacturers are look- ing to secure their supply chain and prepare for what will be in- evitable disruptions in the fu- ture. At the same time, they want to do so at reduced cost and capital outlay after paying a pre- mium for electronic parts over the past several years. “We just went through one
of the biggest supply chain dis- ruptions in history outside of a world war,” says Mike Thomas,
ith the unprecedented, once-in-a-lifetime dis- ruption of the supply
who is vice president and global general manager of Classic Com- ponents, a premier independent distributor based in Torrance,
ble to present and future disrup- tions.”
Even though it was an un- paralleled event, Covid related
time, 60% of the world’s produc- tion of MLCCs was controlled by three suppliers. Even now, there are components in short supply due to the limited number of sup- pliers, geopolitical trade ten- sions, and ever-changing tech- nology. As a result, manufacturers
are taking steps to secure the supply chain over the long run. One of the key strategies is to be less dependent on China and more diversified in sourcing the electronic components they will need to manufacture their prod- ucts, says Thomas. There will also be a contin-
Independent distributors are stepping in to assist manufacturers, offering creative financial solutions to reduce component costs.
California. “Now, things are starting to settle down. Interest rates have risen sharply, which is having the expected result of slowing the economy and so de- mand is down. However, the sup- ply chain is still highly vulnera-
supply chain shortages are not the only disruption to affect glob- al manufacturers in recent years. In 2018, there was a worldwide shortage of multilayer ceramic capacitors (MLCC) when demand outpaced supply. At the
ued role for independent distribu- tors. When franchised/authorized distributors were not able to sup- ply the required parts, independ- ent distributors stepped in during the pandemic and played a criti- cal role in helping keep many manufacturers’ production lines running. Independent distribu- tors can leverage their extensive expertise and decades of strategic
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