Distribution
Reducing component lead times and liabilities: a comprehensive approach
Paul Bentley, managing director of GD Rectifiers, reflects on the current market, challenges and solutions to help build a resilient supply chain for when demand increases
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n today’s fluctuating industry, the power electronics component market is seeing built-up inventory in the distribution channel and with end customers which has led to a decline in demand whilst this stock is consumed. The industry is renowned for fluctuating from high demand with extended lead times to slow periods with excess stock sitting with distributors and OEMs. However, this article explores what considerations and plans to put into place now to ensure a robust supply chain when demand increases.
With the market set to return to its busy period in the coming months as new projects start to gain momentum, it’s never too early to get ahead and reduce component lead times and liabilities. The current oversupply situation is tempting customers to order
24 April 2025
on the spot and not forward order or place schedule orders. However, no market condition lasts forever, and as tempting as it is to assume that the oversupply will last a long time, the oversupply will quickly be used up in the supply chain resulting in extended lead times again.
Reducing lead times and mitigating the risks associated with component supply is crucial for maintaining production timelines. In this article, we explore the challenges, solutions, and emerging strategies to reduce electronic component lead times and liabilities, with a focus on semiconductors, fuses and capacitors.
The impact of long lead times on the power electronics industry Extended lead times make it difficult to
Components in Electronics
predict demand and manage inventory levels accurately. Excess inventory can result in higher storage costs and tied-up capital, while stockouts can lead to missed sales opportunities and production delays. The need to balance inventory and streamline the supply chain has never been more critical especially in the power electronics industry where a company can go from record-high sales one year, to a slow one the next.
Liabilities associated with extended lead times
Extended lead times don’t just impact timelines—they also come with significant liabilities. These can range from financial losses due to product delays, to reputational damage, and even legal ramifications in cases
where supply contracts are not honoured. 1. Product obsolescence: As technologies evolve rapidly, long lead times can result in the supply of outdated or obsolete components. By the time the component arrives, it may no longer meet the current requirements of the product being manufactured. This is a significant liability for companies that must either absorb the cost of redesigning their products or endure the consequences of delivering outdated technology to customers.
2. Counterfeit components: With extended lead times, the risk of counterfeit parts infiltrating the supply chain increases. Unscrupulous suppliers may take advantage of shortages, providing counterfeit or substandard
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