Susan Mucha

Be quick with customer forecast review meetings when orders slow.

I believe 2022 will be a pivotal year for most electronics manufacturing services (EMS) providers. Material lead-time and availability issues are slightly improving, and supply-chain executives are cautiously optimistic about a return to normal in mid-year as demand levels out and additional chip manufacturing capacity comes online. That said, a return to normal brings its own set of challenges, if past cycles of this nature are considered. It is particularly important for EMS program managers to start considering the issues likely to come with a mid-year pivot:

  • Forecasts on some products may drop substantially. While component manufacturers, distributors and EMS companies typically have checks and balances to identify situations where customers have increased forecasts as a hedge against allocation, uncharacteristic demand spikes make those controls iffy at best. Most EMS companies have orders into 2022 and exceptionally high levels of inventory in-house. Any downward trend in forecasts should trigger a forecast review meeting with the customer to determine how rapidly orders and inventory levels need to be adjusted.

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