Electronic Design News (EDN) featured a rather interesting interview with Roy Vallee, the chairmen and CEO of Avenet Inc., a long-time recognized veteran of high volume distribution.  In this interview, Vallee shared an industry outlook for 2010 from the context of the demand-side of high tech and consumer electronics industry.  If you reside in the high-tech, consumer electronics or distribution-related industry, this interview is worthy of a read.

He notes, as other industry observers have also noted, that earlier predictions of disastrous revenue decline made in the first quarter were somewhat less painful for the overall industry by year-end.   He additionally notes that high tech supply chains reacted more dramatically than he had seen in his entire 37 year career in the industry, which is a rather noteworthy comment. “By the time the industry saw a drop in demand, there was a very accelerated and aggressive movement to reduce inventories and cut-back supply chains.” As the year played out, high tech companies tended to align their inventories, even with end demand being below where it was a year ago. He admits that distributors may have cut too dramatically with orders to suppliers causing lots of disappointment with order and cash flow.

Looking ahead to 2010, Vallee believes that the high tech industry will enter the year in pretty good shape in relationship to inventories and capacities, and expects the industry to lead in the U.S. recovery through a gradual increase in end-demand.  Vallee also reflects on positive optimism for growth in China concerning various high tech electronics-related segments.

 A final commentary from my lens would be that readers keep in mind that it was the high-tech sector, both OEM’s, suppliers and contract manufacturers, that not so many years ago initially led the charge for investing in technology that provided broader supply chain resource  and execution visibility through web-based applications.  It would seem that those investments may have paid dividends in navigating the supply chain minefields of 2009.

 Bob Ferrari