By Bolaji Ojo
What’s at stake?
Companies in the electronics supply chain piled on record inventory-related risks during the last semiconductor shortages. Even normally cautious component distributors joined in a race to meet clients’ needs. But inventories have since ballooned. And now, having tried just-in-time and just-in-case parts management systems, the industry must decide which of the two is optimal now that it has too much inventory.
It was time for bold supply chain actions. Huge profits and market share gains were at stake, so Arrow Electronics Inc., the world’s largest distributor, tossed out its conservative inventory acquisition rule book and racked up billions of dollars in non-cancellable components orders.
It was the new normal for an industry hard pressed to meet surging demand for components. But was it the most efficient solution?
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