Shorter lead times—the good and the bad

Nov. 29, 2018

by Caroline Hayes

WISBECH, ENGLAND—As lead times have shortened from six months earlier this year, to 12 to 13 weeks, on chip resistors and passives, Steve Rawlins, CEO, Anglia Components, has warned that while availability has improved, there may be instability in pricing ahead.

Rawlins cited weak demand for iPhones and a softening in the Chinese economy due to sanctions as two factors. “We believe we are in an inventory correction period as many customers have had to purchase in large quantities to secure components. I believe that this build-up of customer inventory could take till the end of Q1 next year to burn off,” he said.Swings in lead times can make it difficult to predict demand. ”We all want growth but in a measured way so everyone can plan material and at the end of the day deliver to the end customer on time,” added Rawlins

Asked if uncertainty over inventory correction portends supply issues post-Brexit, Rawlins said: “We keep all of our inventory here in the UK, and have the lowest stock turn in the business, holding about six months’ supply at any point, so I think we are as well protected as anybody. This is very important to our customers, many of whom are SMEs and are very reliant on continuous, stable supplies. One hopes that ultimately good sense will prevail and the remaining issues are resolved in a pragmatic way, but it’s still hard to be sure where we will end up. Anglia’s long term strategy of maintaining deep inventory onshore in the UK puts us in the best possible position to protect our customers against this and any other form of disruption”.

Electronics Weekly has the complete article

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