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Executive Interviews Reveal Weak Spots in Supply-chain Management

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IAN SHEPPARD, GIST, Aldershot, UK. DOUGLAS KENT, PRTM, Abingdon, UK

ABSTRACT 

Dataquest forecast in October of last year that the most likely scenario for the global semi-conductor market was a 35% decline in sales revenue from 2000 to 2001, making the total market for 2001 worth an estimated $147 billion, down from $227 billion in 2000. In addition, they expected a slight year-on-year increase in 2002 of 3%, and strong growth in 2003 of approximately 30%. In May 2001, iSuppli Corp. estimated a global $13 billion of excess semiconductor inventory. There is little doubt that the semiconductor industry suffered its worst ever ‘bullwhip’ effect in 2001, driven only in part by the cyclical nature of the industry. Other identified contributory factors included poor product forecasting, lax inventory management, as well as record drops in demand by the PC and telecommunications industries. As a consequence, many today are asking, “What’s the outlook for 2002? What can we do now to better prepare for the months ahead?” 

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