The growing complexity of the electronics supply chain is not only impacting distributors and making their job infinitely harder, but it also means that OEMs and CEMs are having to re-think the way they manage their demand for electronics components, according to Alberto Della Chiesa, Vice-President for Supply Chain Solutions at STMicroelectronics. Especially if they are to handle the risks inherent in an increasingly complex supply chain.
Speaking at a conference organised by Future Electronics and looking at ‘Supply Chain Innovation’, Della Chiesa said that as e-commerce retailers such as Amazon had made next-day delivery of almost any electronics device the accepted norm - together with the wide and different product options and flavours now available - extreme day-by-day swings in demand for specific parts was now being experienced.
At the same time, he explained that semiconductor manufacturers typically require between 8 and 12 weeks to produce a finished, packaged IC and added that the increasing complexity of the interactions among semiconductor manufacturers, foundries, packaging facilities, test establishments, OEMs and end users meant that the supply chain’s traditional reliance on inventory management alone was now becoming ineffective.
According to Della Chiesa it will only be by combining demand management, demand propagation and inventory management with an intensified focus on manufacturing excellence that the entire electronics supply chain will be able to handle the increasing volatility in demand that the industry is now facing – something that STMicroelectronics calls flexible networking.
Distributors certainly have a role to play in helping to manage this greater volatility and while many look to differentiate themselves through better management of the supply chain, there’s still an awful lot to do.
