Distributors Plan for Supply Disruption in Japan

A number of US-based distributors have operations in Japan, and virtually all resellers carry Japanese suppliers on their line cards. {complink 453|Arrow Electronics Inc.} and {complink 12888|TTI Inc.} are among distributors providing updates on the status of their employees and facilities in the region, and on their expectations for the component supply chain in the coming weeks. Suppliers with operations in Japan generally expect to see transportation delays.

Arrow Electronics Inc. has reported that its staff in the affected regions are confirmed safe. Arrow has a sales office in Tokyo and numerous facilities in the Asia-Pacific region.

Arrow is continuing to take safety precautions and is inspecting its facilities and buildings in the region. “We are also in ongoing contact with our suppliers located in the region to gauge any impact to their businesses,” the company said in a press release. “We have put contingency plans in place in the event that any of our suppliers have experienced disruptions to their business.”

At TTI, Vice President for Corporate Marketing and Product Management Michael Knight said, in a press release:

    Many of the suppliers we distribute for are Japanese companies and/or have manufacturing and logistics operations in Japan. The recent natural catastrophe in Japan is affecting the lives of everyone there, and in the short term, virtually all Japanese businesses. We are in close communication with our suppliers and will provide regular updates on our website regarding their ability to manufacture and ship product.

At this stage, it appears that damage to TTI's suppliers' factories is minimal and that none of the direct employees of suppliers have been injured:

    As most of our Japanese suppliers with manufacturing operations in Japan have those operations located south of Tokyo, they seem to have been spared the worst of the earthquake and ensuing tsunami. The more immediate concern appears to be that electric power and water supply services are down throughout many areas, which could delay plant openings and hamper efforts to ship product out of the country.

As a result of the falling lead times the channel has been experiencing since the end of last year, TTI has a healthy inventory of Japanese-made products, which should “shield our customers from any near-term supply disruption,” said Knight…

    As is our habit during times like these, we will make every effort to allocate sales of these parts to those customers with whom we have open orders or an ongoing supply chain agreement. We will also do our best to help support our suppliers’ direct customers in the event that they should need some inventory coverage to see them through any short term supply disruption they might experience.

Element14 has created a dedicated online space at Suppliers are posting the latest updates on the anticipated impact of the disaster by product family and device type, including likely changes to lead-times. There are also discussion threads building on the community’s many forums as customers ask questions and seek answers from suppliers and other industry representatives, in this dynamic and rapidly changing situation. (See: Element14 Provides Real-Time Updates on Japan.)

{complink 577|Avnet Inc.}, {complink 2164|Future Electronics}, and other distributors have issued press releases on how they are responding to the crisis:

The following official supplier updates are available at TTI:

  • 3M Interconnects Update
  • AVX Update
  • Bourns Update
  • KOA Speer Update
  • Littelfuse Update on Japan Earthquake
  • Murata Official Update
  • Panasonic Electric Works Update
  • Panasonic's Response to Japanese Earthquake
  • United Chemi-Con Update.

1 comment on “Distributors Plan for Supply Disruption in Japan

  1. Mydesign
    March 18, 2011

       Japan, is the world's fifth largest manufacturer of semiconductor products, has seen factories making everything from chips to car parts closed following Friday's earthquake, threatening supplies to manufacturers across the globe. Top mobile telecom equipment makers joined automakers in warning of a damaging supply squeeze as the impact of Japan's devastating earthquake spreads, adding to fears in a sector hampered by shortages. Most are making contingency plans, scrambling to source key components elsewhere while working out how much inventory they have available to keep production going.

       Ericsson, Alcatel-Lucent and chipmaker STMicroelectronics all warned of a likely impact on supplies on Wednesday, echoing fears raised in the auto industry, where the closure of major Japanese car and parts plants could affect U.S. carmakers in as little as two weeks.

       Analysts have said if the supply chain were broken for even a few weeks, the impact could be felt in higher prices or shortages of gadgets such as Apple Inc's iPad and other tablets, smartphones and computers for months to come. The threat of disruption has already impacted prices for chips since even if damage to production facilities is limited, power and transport outages could result in significant shortages of electronic parts.

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