Balancing inventory with real customer demand is crucial warns afdec
1 min read
Consolidated June 2010 figures released by the Association of Franchised Distributors of Electronic Components (afdec) show electronic component distributors in the UK and Ireland reported a 23.8% increase in billings compared to the previous month and a 37.9% improvement over the same period last year.
The trade association's chairman Adam Fletcher (pictured) said he was less comfortable with the 87% bookings growth in the semiconductor product group and the 58% growth in the passive product group compared to the same period last year.
Fletcher warned: "This exceptional level of bookings growth is unsustainable and increases my fears about double ordering by customers, especially when I compare these figures with the 27% growth achieved in the electromechanical components group, because emec products are required in the same ratio to produce the same volume of electronic systems."
According to Fletcher distributors in the Nordic region and elsewhere in Europe are experiencing similar growth trends but the difference between the products sectors is beginning to level out.
"I'm sorry to be the 'party pooper' but the current billings growth trend exhibits all the signs of an 'it'll all end in tears' scenario," cautioned Fletcher. "I reiterate my comments from last month. All ESCN members need to proceed with caution; carefully balancing their inventory with real customer demand and communicating their needs within their supply network. Failing to do this effectively may jeopardise output and result in an unwanted glut of inventory."
