CHICAGO Expect large end users to outsource more manufacturing as they attempt to hold inventories down and survive volatile swings in demand for their products, a group of executives told Cahners Business Information editors.

Some of the top executives in electronics distribution and supply chain collaboration software gathered in June for "Supply Chain Movers and Shakers of 2001," a roundtable dinner celebration. Industry leaders like Avnet president Brian Hilton and Arrow Electronics CEO Francis Sirrico exchanged views on recent trends and what lies ahead.

The group discussed trends such as whether the quality of information among supply chain partners will improve, or if wild swings in production cycles that the computer chip makers and other manufacturers have seen recently will continue. Another topic was the growth of contract manufacturing beyond electronics and high-tech industries, and what that means for tier-one suppliers and distributors who may need to invest heavily in information technology to stay in the game.

"In 20 years our pricing mechanism hasn't changed," said Sirrico. "We charge a markup on components but we should charge for services. We now have 500 engineers around the world ... the mechanism has to be: are we creating value? If so, we must get paid for it."

Some other participants included Bob Schroeder, CEO of Pacific Bearing; Ken Spencer, CEO of Entivity; and Stephen Sasser, CEO of Frontstep.