Engineers have reached a sense of optimism around acute issues such as the shortages of available components caused by supply chain disruptions, but the long term outlook remains uncertain as they plan for 2024, according to an industry survey from Avnet, a global electronic components distributor based in Arizona.
The firm’s third annual “Avnet Insights” survey found that despite feeling better about availability, engineers are reevaluating how they approach the supply chain following the disruptions of the past few years.
When it comes to supply chain tactics utilized to navigate lack of component availability, the top three tactics for 2023 respondents were: seeking alternative sources for parts (32%), increasing buffer inventory (19%), and increasing the timetable of demand forecasts (17%).
That shows a shift from the 2022 survey, when “seeking alternative sources” remained the top solution, but the second go-to tactic was to go beyond the current approved manufacturer list. The decrease in those going “off list” in favor of adapting inventory or forecasts suggests engineers are now looking for longer-term solutions to navigate disruption, Avnet said.
Further, distributor relationships are proving of greater importance. While last year, improving relationships with distributors came in as the third most popular supply chain strategy for managing the chip shortage, 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. As such, many are looking at what they can do to set themselves up for greater success,” Rebeca Obregon-Jimenez, Avnet’s Senior Vice President of Strategic Business Engagements and Supplier Management, said in a release. “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.”
Other takeaways from the 2023 survey showed that:
- Nearly three-fourths of global respondents believe the severity of the component shortage has improved year-over-year: 73% say the shortage has gotten much better or somewhat better. What’s more, this marks a significant shift in engineers who feel there have been improvement compared to 2022, when 59% said the severity of the shortages had gotten worse year-over-year.
- However, market conditions are becoming a bigger concern. More than a quarter (29%) of respondents are more concerned about market conditions vs. component availability, up from 18% in 2022. Still, component availability remains top concern for the majority (69%).
- Overall, respondents are experiencing improvements in their access to a number of components – most notably passives (66%). However, respondents are still feeling some strain with MCUs (20%) and analog (19%) components.
- Hesitation remains around adoption of Artificial Intelligence (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. And despite a small selection who are currently using AI or have plans to use it, a majority of respondents appear to be resistant: more than half said they are not using it and have no plans to (56%).
The Avnet Insights survey was conducted in September among 316 global respondents based in the Americas, EMEA, Asia, and Japan.
