Front End | Electronic Components Supply Network
that customers are struggling to accurately forecast their future requirements. This is a ‘double-whammy’ for our industry at a time when component manufacturers are desperately seeking to reduce their overall in-house inventory and associated “holding costs”. Historical consumption patterns no longer provide a reliable guide to component manufacturers, and they are holding off from increasing or even maintaining their production output until they receive reliable, real demand data and customers begin to place ‘hard’ orders once again.
Increasing costs
All parties in the electronic components supply network are experiencing sharp hikes in their labour, materials and logistics costs and as a result – and despite weak demand – the price of electronic components is increasing. UK members of ecsn are reporting an increase in customers’ “spot” (very short term) buying activity as their inventories begin to come down and they seek to cover shortages. Given the wider global situation with lead-times currently averaging 12 to 16 weeks across all components, this is a somewhat alarming trend. Customers should be placing
longer-term scheduled orders with their suppliers now to avoid a repeat of the problems they encountered in 2023. May I take this opportunity to encourage ALL procurement professionals in our industry to check and, where required, update their ERP systems with the latest lead-time data for the components their organisation is likely to require in the remaining half of this year and into 2026. Placing longer- term order cover (which can always be rescheduled to meet immediate needs) with their suppliers ultimately provides component manufacturers with a valuable
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www.cieonline.co.uk Components in Electronics July/August 2025 13
insight into likely demand going forward, which helps secure access to inventory when customers need it.
Concluding thoughts
To help mitigate future supply and demand imbalances I urge all organisations to play their part in the future success of our industry by participating and contributing to the collaboration and communication process both up and down their supply network. When well-managed, this industry interaction costs very little but offers great returns for the time invested.
For information
Adam Fletcher is chairman of the Electronic Components Supply Network (ecsn), a business association established in 1970 that today offers support to all organisations with an interest in electronic components throughout their entire lifecycle. He is also chairman of the International Distribution of Electronics Association (IDEA), an association of individual country electronic components associations whose objective is to arrive at and share best industry practice.
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