Supply Chains Reach Turning Point With Chip Availability

Engineers have reached a turning point when it comes to dealing with supply chain disruptions, a new study from Avnet has found.

The report comes as the manufacturing industry has seen a spate of disruptions due to geopolitical issues and changes to production output, and surveyed 319 industry members from the U.S., EMEA, Asia and Japan. 

The 2023 survey said that, while there is a sense of optimism around “acute issues” such as component availability, the outlook for what’s next remains uncertain. 

Findings from the survey show the issue of component shortage has steadily improved, with 73% of respondents saying it has gotten “better or somewhat better.” This is a significantly different landscape from the 2022 survey when 59% said the severity of the shortages had gotten worse year-over-year.

Market conditions are, however, becoming a bigger concern. More than a quarter (29%) of respondents said they are more concerned about market conditions vs. component availability, up from 18% in 2022. 

Finally, the report found hesitation remains around adopting AI strategies. Avnet found only 4% of engineers are currently using AI in their work today and only 14% have plans to implement it into their work this year. More than half (56%) said they are not using it and have no plans to.

While overall, general sentiment about availability has improved, supply chain disruptions seen over the past few years have led to a change in how engineers approach supply chains.

According to the report, when it comes to responses to navigate the lack of component availability, the top three tactics for 2023 were seeking alternative sources for parts (32%), increasing buffer inventory (19%) and increasing the timetable of demand forecasts (17%). 

Last year, improving relationships with distributors was the third most popular supply chain strategy for managing the chip shortage, while the 2023 survey placed it at number one.

“Our third annual Avnet Insights survey underscored that while many may be feeling more positively about getting access to the necessary components, there is a trepidation about the future,” said Rebeca Obregon-Jimenez, Avnet’s senior vice president of strategic business engagements. “As such, many are looking at what they can do to set themselves up for greater success.

“One thing has become certain, and that is the desire to implement long-term strategies that will help ease the impact of any unforeseen disruptions and ensure flexibility in both sourcing and design. The key to this is access to actionable data, which distributors such as Avnet are using today to help OEMs gain more visibility and control in their supply chains.”