Front End | Electronic Components Supply Network
requirements and therefore on the quantity of components to be ordered can be exponential. If customers across the electronic components supply network fail to realise the consequences of their (in)actions a vicious circle of supply and demand will result. Played out internationally, this vicious circle has the potential to trigger a huge and ongoing spike in demand for components on suppliers, which reduces their available manufacturing capacity and, in turn, further extends the lead-times for new orders and continues until the manufacturer just cannot accept any more orders. At this point the entire system starts to unravel, with order backlogs being cancelled and lead-times declining further and thus, another vicious circle is created. This situation is compounded by organisations who deliberately ‘double order’ (placing multiple orders on different suppliers) with the express intention of cancelling as soon as one delivers, a practice that totally distorts the demand picture. Organisations right across the electronic components supply network are having to cope with this market situation in 2024 and, by all accounts, are successfully working through it.
Concluding thoughts
It’s a sad fact but counterfeit components remain a signifi cant threat to our industry
both in fi nancial and technical terms and there appears to be little ongoing effort to eradicate it. Customers can however go a long way towards supply security by remembering the mantra ‘Just say no’. Whilst I’m delighted that the weaponizing of trade between Japan and South Korea has been resolved, there are today wider, much larger and more signifi cant geopolitical tensions that appear a long way from resolution. I’m confi dent that stronger underlying ‘real’ growth will return to global electronic components markets in 2025, which leaves ample time for all parties to collaborate on their demand planning initiatives and perhaps apply historical lessons to help mitigate the next, some may say inevitable, demand and supply problem.
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
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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.
…Promoti ng Positi ve Collaborati on Throughout the Electronic Components Supply Network to Benefi t Members and the Economy…
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Components in Electronics
March 2024 13
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