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Podcast: First the Gorging, Now the Hangover, plus other Problems

Yesterday's supply chain challenges are becoming history just as new ones are cropping up.
Dale Ford, analyst
Dale Ford, Chief analyst, Electronics Components Industry Association

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By Bolaji Ojo

Guest: Dale Ford, Chief analyst, Electronics Components Industry Association

Electronics manufacturers can’t seem to get a break. 2023 began with quickly realized hopes for an end to the severe supply shortages that disrupted manufacturing for two years. But now the industry is facing a battery of other challenges that similarly pose significant financial problems for OEMs and chip vendors alike.

Dale Ford, chief analyst at Electronics Components Industry Association (ECIA) doled these out in our latest podcast. The industry, Ford says, gorged itself on too much components as manufacturers scrambled for parts during the height of the shortages. Now, it must deal with the aftermath.

Ordering patterns in the industry switched quickly from Just-in-Time (prior to the shortages) to Just-in-Case (during the shortages) and now to Just-too-Much. The channels are overloaded, and companies must now go through an unknown period of “inventory overhang,” according to Ford.

If only that was the sole problem facing the industry now. Issues that were not previously addressed have since cropped up again. The problems of lack of visibility and transparency, “aging workforce” and the scarcity of trained and experienced technical workers have not been resolved.

Neither has the industry overcome its “trust liability” which is disrupting the ability of manufacturers to effectively collaborate amongst themselves.

Geopolitical challenges have not gone away, either. Component suppliers, especially semiconductor vendors, must also wade through a thicket of legislations, rules and directives from governments concerned about the exportation of high-performance chips to certain countries, including China and Russia, he noted.

The last thing any company wants is to “get caught in the crosshairs of a government agency,” added Ford.

So, even as the industry delights in the fact that only pockets of tight supplies remain in the electronics manufacturing sector, any celebrations are taking place in the shadow of other hanging problems.

Listen to the podcast:

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