ECS plots trends in the frequency control space, offers advice on avoiding counterfeits and explains how it has managed to maintain supply during the pandemic.
Q) Focusing on crystals and oscillators, what supply chain trends has ECS witnessed over recent years and what predictions can you share with electronics purchasing professionals for coming years?
In the global frequency control space, we have seen some consolidation and even manufactures completely drop out of the industry. Due to the tariff issues beginning in late 2018 and almost all of 2019, we experienced a market softness due to an abundance of inventory in distribution. This forced a few manufactures to drop their expansion plans completely or to push them back. The market has rebounded in 2020 and there are discussions about expanding factory capacities.
This is an interesting question as it relates to what electronic purchasing professionals need to be aware of when it comes to frequency control products. Our main targeted audience is the electronic engineering design community, and our engagement with design teams is paramount to our success. Once awarded a design win, it is handed off to a procurement team within the customer’s organization.
Q) Counterfeit and obsolete components are ESNA’s readers’ biggest supply chain threat. How are frequency component suppliers responding to this challenge?
Many times the procurement community tries to maximize margins by finding a low-cost source without ensuring that they buy products through an authorized distributor. This sometimes is when issues surface that can create havoc for all, referring to counterfeit product. The issue is growing and is problematic for everyone in the electronic component world. It’s unfortunate that there are operations that will claim to have our products in inventory and for sale. Typically, these parts are at a reduced cost, when in fact someone has forged our name on product that was not produced by us.
The lesson here is that the procurement teams must buy from our authorized distributors to eliminate counterfeit product. These counterfeit products have a high probability of being inferior and will cause product quality issues. When issues arise engineers will need to revert to ECS. Solving issues caused by counterfeit products can be complex and very expensive.
The issue with counterfeit products will continue for the foreseeable future because it’s virtually impossible to find a solution. Procurement professionals also need to partner with their frequency control supplier of choice to ensure they are getting the quality component that was designed in by their engineering team.
Over the next decade there will be fewer frequency control sources due to consolidation and others exiting or closing their business. The buyers of these products need to perform their due diligence to ensure that they are working with companies such as ECS that have been around for over 40-years and will be around for another 40-plus years.
Q) How has ECS adapted during Covid-19 to ensure a stable supply chain?
In the time of global pandemics and shutdowns, we have seen the supply of raw materials and finished goods slip out significantly. What was once <10 weeks is now over 16-weeks for build to order products. When managing inventories in the supply chain, it is vital to understand how and where products are used and keep an eye on product inventory trends. Following these market indicators and reacting to internal lead times and the manufacturing process times, allows us to maintain a constant flow of products to the market. Lead times are also mitigated by keeping significant quantities of product in our distribution sales channel.