Supply Chain Matters provides readers another industry example of efforts underway to reexamine supply network strategies in the light of two years of disruptive impacts, with the goal of augmenting needed agility and more direct control.

 

Background

Among the Ferrari Consulting and Research Group’s Predictions for Industry and Global Supply Chains for the current year, is our firm belief that businesses and their supply management teams taking more direct control in strategic and tactical sourcing of materials sourcing will be a driving force in the coming months. After two years of global wide pandemic driven disruptions uncovering a lot of vulnerabilities in supplier focused lead time, service level and added cost risks, many businesses will initiate moves directed at augmenting both agility and resiliency areas of their supply networks.

The Supply Chain Matters blog has been updating readers on significant developments related to this prediction. As an example, in February we updated readers to an announcement from paint and coatings producer AkzoNobel NV that elected to shift sourcing of more of the required resins needed in paint production to in-house production. Active in over 150 countries, and the custodian of a host of 60 plus global branded products, this company reflects a producer managing a significant global supply network. Labor shortages and the escalating cost of transporting materials exacerbated needs for filling customer orders, leading to a significant backlog of orders. The producer has plans to increase its in-house production of needed resins, used in the production of paints and resins, from a current level of 40 percent to a reported level of 55 percent by the end of 2023.

We have another example to share with readers.

 

High Tech and Consumer Electronics Move

Open market electronics and semiconductor device distributors continue to rely on a small universe of offshore testing partners to achieve extensive quality standards that multi-industry manufacturers require. Increased demand for electronic components combined with stringent quality standards have lend to unprecedented extension of lead times to have devices tested by external services providers.

Fusion Worldwide, a global open market sourcing distributor for electronic products and semiconductor devices announced in late February the acquisition of Prosemi Mfg Pte Ltd, a large-scale electronic component test house in Singapore.

Noted is that with the supply chain experiencing historic constraints leading to lengthy turnaround times, this addition will further a mission to provide world class sourcing and fulfillment, while enhancing its ability to sustain the highest levels of quality standards.

Headquartered in Boston, Massachusetts, this electronics distributor operates 22 locations across four continents. This provider’s mission is to partner with customers by leveraging a vast supplier network to help address and overcome electronic supply shocks such as increased supplier lead times, geopolitical factors or product obsolescence. This services provider’s sourcing teams constantly monitor the electronic component and finished product markets leveraging proprietary software to be able to identify and secure for clients sources of supply.

The announcement indicates that over its 22-year history, Prosemi has become a provider for testing electronic components reportedly among some of the world’s largest high tech CEMs and OEMs.

Sources indicate that since the acquisition, Fusion Worldwide has managed to already achieve meaningful reduction in component lead times for its customers.

 

As outlined in our prediction, we anticipate further such moves as businesses and their supply and product management team continue to reexamine areas providing for more direct control of the supply network along with bolstering agility or resiliency of key component supply

 

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