Buyers, distributors both report longer part leadtimes

Staff -- Purchasing, 3/16/2006

Respondents to Purchasing's monthly business survey say electronic components are becoming more difficult to find lately and it appears like the distributors are getting caught in the middle.

"We're seeing more supplier delivery issues in electronics," says the purchasing manager at a Midwest auto parts supplier. And a buyer/planner at a Northeast telecom firm says semiconductors are his biggest delivery headache.

The problem appears to be in between the supplier and distributors. Buyers report late deliveries from distributors, but distributors tell Purchasing suppliers are slow and pricey these days.

Rick Paris, purchasing manager at electronics distributor Parts Express in Ohio says, "We have backorders piling up for various electronic components." Paris reports supply from component suppliers is fluctuating and pricing is even worse.

"The price increases are mainly a result of copper prices, energy costs and fluctuations in the exchange rates," he says.

Red Fleinder, a materials manager at Surface Mount Technology in Appleton, Wis. says distributors are ordering minimal quantities from manufacturers to increase their turns.

"Distributors are depending on manufacturers' excess capacity to keep them out of trouble," he says. "And manufacturers moved out the leadtime. In checking with the manufacturers we find that orders were placed exactly at leadtime and any variation in demand or slight hiccup in delivery affects the end customer.

Nate Harris, a buyer at contract manufacturer dataCon, also says some of the distributors he's used in the past are not coming through on their stated leadtimes for parts, but he puts most of the blame on the component makers. Some distributors are up front about their concerns with a given manufacturer, whereas others are truly caught off guard.

"One manufacturer had the order for two months and when we inquired on the progress of the order, they had not even started it, " Harris says.