Seeing is believing, and nowhere is this truer and more necessary than among the suppliers, distributors and users strung along today’s stretched and often frayed supply chains.
“The post-pandemic has been going on for a year and a half or two, but we still saw some severe supply chain disruptions as recently as two quarters ago. As a result, many suppliers have been shifting to manufacturers that may not be leading companies, but are more willing and transparent,” says Uma Pingali, global president of sales for Farnell, which includes regional brands Newark and element14. “About 5% of our SKUs still have long lead times. Some are 40-60 weeks, which means they and their distributors and customers have to plan for 12-18-month production cycles. This makes it very rocky for users waiting for orders from stock. So, we’ve also been collaborating more closely with our suppliers, and expanding our abilities to serve as a buffer between our suppliers and customers.”
Pingali reports that Farnell implemented supply planning software from Logility Inc. to normalize its planning and find ways to shorten stretched lead times. “This software helps us expand our supply chains, place stocking orders, and manage distribution to our customers,” says Pingali. “Many supply chain conditions have eased lately, and there are more items on the shelves, but now we’re also dealing with over-inventory as the market continues to correct itself. Excess supply and inventory are a problem, but they pale in comparison to COVID-19, when there was often no inventory and huge lead times.”
Going forward, even if inventory is held longer and in larger volumes for a wider customer base, Pingali adds there’s no way to repair and go back to the full visibility that used to exist between suppliers, distributors and customers. “As distributors, we’re obligated to help users navigate and deal with shortages, but methods like just-in-time (JIT) manufacturing and delivery at volume is a thing of the past,” he says. “This is why suppliers, distributor and customers need greater visibility into each other’s production processes, so they can forecast what they need to do more accurately. If they don’t have this visibility, then they won’t be ready when the next glitch hits, and they’ll be ignored and fail. Suppliers, distributors and customers must also be more willing to collaborate, schedule buffer stocking, and even share some liability. One side of the triangle can’t bear all the liability and frustrations. The mindset of one individual winning at all costs and at the expense of everyone else is also gone.”