Component prices have risen dramatically over the last 12-months. Increasing demand and lack of availability has led many distributors to increase prices accordingly, knowing many manufacturers have no choice but to pay.
But how honest are these distributors being? A new trend is emerging, where advertised stock levels are often false or massively inflated. These distributors seemingly have no intention in keeping stock levels accurate on their online portals. Instead, they’re continuing to advertise non-existent stock to help drive traffic and enquiries.
As manufacturers, we’re also finding distributors are consistently asking us to commit to higher, longer-term scheduled orders to release quantities of existing stock to satisfy (sometimes only partially) short-term supply issues.
The underhand tactics used by some distributors merely highlight the lack of loyalty shown to existing customers. We’re seeing distributors claim all current stock is reserved for existing customer demand. However, they’re prepared to release some of that stock if we commit to longer-term schedules. If true, this means the stock reserved for their existing customers is being used to fulfil our demand, leaving the original customer short.
Do we want to engage in this kind of activity when we’re all working hard to ensure the UK electronic manufacturing industry gets back on its feet after 18-months of uncertainty?
Adding to this, distributors rarely update customers when stock availability or delivery dates against an existing order change, leaving many businesses expecting delivery and planning manufacture around phantom delivery dates. This creates a knock-on effect for their customers, who are let down when stock doesn’t appear.
The only people benefitting from these tactics are distributors and their finances.
So, what can we do as an industry? How can we support one another to ensure stock availability without effectively pinching it from someone else’s order?
FermionX has always been proud of its supply chain management, employing a dedicated team which works hard to manage customer expectations. We don’t want to see that slip and we don’t want to let anyone down. Thus, the company is diverting requirements to more trustworthy sources where possible and working closely with customers to forward plan. We’re also looking at our business model to reduce the burden of cost on our customers.
Now is a time for CEMs to work collaboratively by sharing information on excess stock which may benefit other manufacturers. Let’s unite around this rather than falling for distributor tactics which leave us all fighting in the dirt.
Dan invites CEMs to discuss working collaboratively by calling on 01903 524600 or email firstname.lastname@example.org.