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APRIL 2024 I SMT007 MAGAZINE 91 highlighted the need to increase production efficiency as a key reason for digitization. Is Supply Chain Really an Issue in the Electronics Industry? In today's business world, the supply chain is critical to the success of any company, but especially so in the electronics industry, which is extremely globalized. A company's supply chain is the network of suppliers, manufactur- ers, warehouses, and distribution centers that are involved in getting a product from the raw material stage to the finished product stage. In the electronics industry, the supply chain is especially complex and globally disparate, with components typically originating from multi- ple countries and being assembled in a differ- ent country. A single finished product can con- tain hundreds of individual parts and numer- ous subsystems or modules, each of which may itself be made up of dozens or even hundreds of parts. An efficient supply chain is also crucial to manage and minimize time to market. As pre- viously noted, in the electronics industry, new products are constantly being introduced and the competition is fierce. Companies that can get their products to market quickly have a major advantage. Semiconductor shortages account for a large part of the supply chain discussions. Pan- demic-era lockdowns are widely thought to be the cause of semiconductor shortages. How- ever, while the pandemic was certainly a fac- tor in 2020 and 2021, the further we get from that extended period of closures, the clearer it becomes that the main issue is fast-growing demand that is outstripping supply. With more and more products requiring electronic com- ponents, such as toys and cars, and even cloth- ing, semiconductor producers have not been able to keep up with demand 4 . e path forward looks equally dire, indi- cating that in the near future supply chain issues will only continue to grow. Returning to our automobile industry as an example, the growth in electronic vehicles will further exac- erbate demand for semiconductors. It is pre- dicted that in the U.S. alone more than 7 mil- lion electric vehicles will be in production by 2028, each of them requiring numerous chips 5 . Supply Chain Intellectual Security is a Hidden Issue That Makes Procurement Even More Challenging e electronics industry is built on a global supply chain that is oen complex and opaque. Components and finished goods are sourced Figure 1: Key reasons for digitizing factories 3 .