Avnet regional president, Americas electronics parts, Dayna Badhorn, presents Avnet’s perspective on 2023: challenges forward however gentle on the finish of the tunnel
As 2022 attracts to a detailed, Avnet is reflecting on one other yr of shifting sands in international expertise provide chains. With the tumult of 2020-21 behind us, this yr has introduced its personal obstacles to suppliers, prospects and distributors, elevating questions over what’s in retailer for 2023.
Our staff at Avnet is forecasting continued, albeit new, uncertainties into subsequent yr. Whereas some lead instances are retreating, prospects are nonetheless going through a rising checklist of stock that isn’t accessible, whether or not parts are stranded alongside the availability chain or have develop into the proverbial ‘golden screw’. This imbalance within the combine of accessible stock signifies that, whereas many parts are liberating up and the times of 40 to 50-week lead instances are receding, end-products are nonetheless being delayed as a result of a small variety of essential unavailable parts.
To assist our prospects, Avnet has prolonged our pipelines to make sure we’ve got the mandatory stock, and enhanced our collaboration with suppliers and prospects to raised perceive their wants. But one of the crucial beneficial variations we made was, on its face, one of many easiest: common, detailed updates with lead time traits throughout product strains.
This apply of data-sharing is just not one thing new. It escalated within the early days of the Covid-19 pandemic when prospects have been anxious over manufacturing unit shutdowns in East Asia in Q1 2020. Because the market shifted in late 2020 and the primary indicators of shortages emerged, our common updates on lead instances grew to become an important piece of the planning puzzle for buying professionals, serving to them higher perceive what they might count on for stock shifting ahead. In enhancing how we observe this information, Avnet has additionally been capable of achieve better perception into buyer calls for and provider availability.
On the subject of stock, Avnet is now managing an extended pipeline of merchandise than ever earlier than in our 100-plus yr historical past. Meaning our biggest precedence has been planning, notably on high-service components: parts with excessive buyer counts or excessive quote exercise. By establishing an extended pipeline with our suppliers, we’re capable of proactively purchase stock that prospects usually ask us to cite for tasks.
So the place does the trade go within the subsequent 5 years? Our prediction is a provide chain pushed by far better automation and a a lot bigger digital footprint than we noticed pre-pandemic. By making these enhancements in-house, Avnet has made its imaginative and prescient of a provide chain management tower right into a actuality, making a digital twin of all the electronics provide chain for extra visibility, agility and management.
Whereas the trade must be prepared for continued shortages over the approaching years, we’re seeing conversations shifting from present shortages to planning for the subsequent quarter. That requires continued collaboration between Avnet, our suppliers and prospects to grasp manufacturing unit plans and manufacturing wants.
Macroeconomic traits will have an effect as properly. The not too long ago signed Chips Act will undoubtedly drive extra capability, however demand may nonetheless outstrip provide for years to return. That’s notably pushed by fast development within the electrical car and its want for charging, clear power and industrial IoT sectors as international markets shift to embrace these new applied sciences.