There’s no place like home
by Chuck Tanzola, CPMR
In June of 2020, I wrote an article for The Representor entitled, “I Have a Feeling We’re not in Kansas Anymore” in which I chronicled the three periods I thought we would go through as the world faced an unprecedented, life-changing, abnormal, uncomfortable, unfamiliar, strange and once-in-a-century situation. (I suspect you know what I am referring to.)
Imagine my shock and surprise when some two years later, while reporting at the October 2022 ERA Board of Directors meeting regarding the ERA website’s Google Analytics metrics, Clare Kluck, ERA’s director of communications, noted that: “Side note and fun fact: Chuck Tanzola’s column ‘I Have a Feeling We’re not in Kansas Anymore’ continues to get a large number of clicks and visits and is consistently one of our top visited pages each month!”
I vowed to myself that I was done writing about the pandemic, but since I always struggle determining what to write about, I thought “Why not write a sequel article?” So naturally, I went back and read my prior work. I will not repeat everything that I wrote before – you can check it out at www.era.org. (Yes, I know this is an obvious and shameless strategy to keep the click visit count up.) However, I did find one section that struck me as appropriate for discussion today. In it, I described what I thought the emergence from the pandemic would look like, when I wrote:
“Period 3 – Stability | Beyond COVID-19 (BC19)
If today we are searching, then tomorrow we will move towards a new equilibrium beyond Covid-19: I have named that period “stability.” When that will be seems to be a moving target, but I have no doubt that a) it will happen; b) it will encompass a combination of the best of the familiar enhanced with lessons learned during this pandemic; and c) by definition it will be different.”
A few observations: 1) I think this is the period we are in – it feels like we are moving on and moving beyond COVID-19, or we are at least trying hard to do so (though I recognize that some would debate this based on the latest variants); 2) The observation that this period “will encompass a combination of the best of the familiar enhanced with lessons learned” is pretty accurate, though the mix is still evolving and probably will continue to do so for some time; and 3) When I wrote this, while I recognized the “moving target” nature of the situation, I honestly thought we would reach this period much sooner than we have.
I do find it ironic, though, that I labeled the period “stability.” As I think about the industry in early 2023, whether you agree we are past the pandemic or not, I am pretty confident that “stable” is not the first word I would use to describe where we are. Consider the following:
• Analyst reports seem to indicate fundamental changes in the business climate in at least the first half of 2023. The sales growth we have seen over the past two years looks like it is now slowing significantly. (I just finished listening to one report that predicted single-digit declines in sales of all commodities essentially.)
• Lead times are anything but stable. Over the last two years, we have seen lead times for components extend continuously. Today, however, we are hearing of both reduced and extended lead times depending upon manufacturer and product.
• Reports from the channel are that book-to-bill ratios have been steadily declining as a normal adjustment to unsustainable demands placed on factories over the past two years; while at the same time, I have manufacturers advising customers to place backlog in place through 2024.
• While talent acquisition continues to be an ongoing challenge, and unemployment remains at low levels, recent news of layoffs at major companies across various industries have permeated the news.
• Air travel is largely returning to or exceeding pre-pandemic levels – assuming the planes will fly. Air carriers are reporting that 2023 revenues will exceed 2019, and yet we also cannot avoid reading about major cancellations due to weather, pilot shortages and overall system failures.
These and other factors make a pretty convincing argument that “stability” is indeed not the correct short-term definition of where we are today. I would say that while the long-term prognosis for the electronics industry is certainly still stable (and growing), the correct short-term description would be “uncertainty.” From day to day and specific situation to specific situation, it seems we don’t know which side of the dichotomy we will find ourselves having to react to.
Two years ago in paraphrasing John Wooden, I wrote that “Flexibility is the key to stability!” Today, I would write that “Understanding, discipline, strategy and execution are critical to working through uncertainty!” That’s what I’ll be looking for in Austin at the upcoming ERA Conference – “Moving On, Moving Beyond!” Will I see you there?
Click your heels three times and repeat after me…“There’s no place like Austin in February!”