It’s still true that forewarned is forearmed, but it’s equally true that seeing further (and responding sooner) is always better.
“In hindsight, having a big customer base and buying in volume are the best ways to avoid overstocking after shortages. However, in the present dynamic market, it helps to use demand-planning software because ever-changing economic conditions can again cause supply-chain shifts,” says Uma Pingali, global president of sales at Farnell, which includes regional brands Newark and element14. “The algorithms in these demand-planning tools will support modifying purchase volumes to ballast market changes swiftly. With sufficient supply-chain data, demand-planning software can quickly indicate the appropriate inventories to address even rapidly changing conditions.”
Accommodating newbies
Pingali adds that suppliers and distributors used to enjoy longtime customers, who could be counted on for consistent requirements and steady ordering. However, digitalization, rapid shifts in solution design trends involving hardware enabled by software, compounded by COVID-19, upended previously stable supply chains, and beset Farnell and its divisions with many new and unfamiliar customers with unusual requirements and practices, and often smaller-volume orders.
“Supplier lead times for most products are presently at eight to 12 weeks, which is much better than the nine months we experienced during the pandemic. Overall conditions have improved, of course, but better demand-and-fulfillment planning deserves a lot of credit, too,” explains Pingali. “It lets us see demand trends further into the future. If demand is likely to be up, we can order and stock sooner. The demand-planning tools also alert us if we have excess supply planned, or if our consumption will likely result in shortages.”
Automate BoMs for flexible features
Likewise, Pingali adds that Newark uses an automated its bill of materials (BoM) tool, so when customers input their product lines, they’ll not only get matching products, but will also receive a quote that provides them with stock availability of those products, side-by-side comparisons, and lead times for them.
“The trend of buying board-level or module products will be a big help for customers because devices such as Raspberry Pi or other system on chip (SOC) modules already have 80-90 onboard components that offer various features and functions. They can just add additional sensors and I/Os to implement full solutions for rapid time to market,” says Pingali. “Users will benefit because they can buy a single module, thus reducing the number of components in their BoM with a few additional components to enable capabilities they want. This is more efficient and less costly than the old way of having to buy multiple components to get desired functions. Plus, using a common, standardized module also makes supply chains more robust for users.”
