April 2014 GPI Panel Member of the Month

April 2014 GPI Panel Member of the Month

GPI Panel Member of the Month, Fabrinet’s S Somasundram Ravendran Sinniah, offers an industry outlook through the eyes of this provider of advanced optical packaging and precision optical, electro-mechanical, and electronic manufacturing services to optics OEMs. 

S Somasundram Ravendran Sinniah
Director, Supply Chain Engineering
fabrinet

S Somasundram Ravendran Sinniah

How would you describe current business conditions in your industry?

The products we manufacture are Optical Communications, Industrial Lasers, and Auto/ Sensors. Current business conditions look stable and show potential growth. In our industry, growth will be due to increasing demand for bandwidth, continued traffic growth in telecom networks, and datacom growth driven by demand for 10, 40, and 100 Gbps and for parallel optics in support of connectivity needs within and between data centers.

What are your greatest concerns about the electronic components market?

Currently, with growth in smart phone demand, one of the greatest concerns is that of support. Component manufacturers’ production cycle times are increasing due to high foundry utilization. Lead times are stretching. Concern is that long lead time parts are going into or poised into an allocation mode and delinquency will creep in with supplier commits being pushed out. Thus, we are consistently ensuring that there are sufficient proactive mitigation strategies being put in place to ensure there is assurance of supply.

What are some of the supply chain issues that “keep you up at night?”

The big challenge is to consistently ensure that the continuous pull in/uptick demand that our customers request from us are duly met, and this calls for a consistent and vigilant management of the supply line to meet all these pull in demand/uptick demand requests, as some component manufacturer product lines are constrained and thus we may get into situations where there is limited flexibility to support new demand inside production lead times. We need to be in consistent touch with the dynamics of the electronic components market place to be able to eradicate threats so as to meet the on-time shipment requests from our customers.

Do you think the overall economy is improving? Why or why not?

Yes, the overall economy looks to be improving. Last year we saw a capacity correction exercise being carried out by the electronic component manufacturers and currently we are seeing pull in/uptick demand from our customers. We notice some positive indications as the GDP of major economies and overall global GDP are either showing some stability or some growth. We are also made aware of capacity expansion projects being carried out by various sub-contractors of the electronic components manufacturers and this is expected to ease the lead time constrain in the second half of the year and thus help to be providing flexibility in a growth situation.

How would you assess your business confidence over the next month?

Currently for next month demand looks stable, constantly watching for requests to support pull in of demand, and we are getting poised to manage this.


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