During the Covid procurement bottlenecks, many companies placed large orders for components and increased their stock levels. These excess requirements are being reduced during the current economic slowdown and demand for LCDs, among other things, is falling. Manufacturers are reacting accordingly and reducing their production capacities.
While delivery times and prices fell significantly a few months ago, both figures have now stabilized or are even rising again. In some regions or sectors, demand is picking up again.
There has therefore been speculation for some time about the possibility of a whip effect. The peak in demand during the coronavirus period is followed by a sustained phase of inventory reduction. However, if many companies are faced with empty warehouses at the same time and then need goods at short notice, the effect can turn in the other direction again, as with a whip: a sudden increase in demand and urgency in procurement.
We would therefore like to point out that you should plan your requirements for the long term and place orders as early as possible.
If there really is a backlash, manufacturers will need time to adjust their production to the increased production volumes.
Contact us, we will be happy to support you with long-term framework agreements, risk orders or buffer stocks.
