Steve Rawlins from Anglia talks to Electronics Weekly in series of exclusive interviews where CEOs give their impressions of the last 12 months and point to the challenges and opportunities which lie ahead for the industry.
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In today’s market confidence is low, and it is no surprise that we’re seeing an increase in back to back ordering. Those who had kept a good stock profile are reaping the rewards but to maintain that success in the upturn, distributors need to raise their game to a completely new level.
Stock is king in today’s market.
Customers have cut their own inventory to the bone, and aren’t willing to restock. Since most big distributors are now holding their stock outside the UK, this is driving an increased desire for vendor managed inventory held at the customer’s premises.
As the market recovers, it is unlikely that customers will invest in inventory to the extent that they were before the downturn, and a stock-light model will prevail. The small-medium CEMs that form the bread and butter of UK distribution business are seeing particular pressure in consequence.
Their customers are ordering as they identify demand, and the well-known financial constraints of this business normally preclude speculative inventory of either components or finished goods.
By working in partnership with a distributor that holds its stock in the UK, customers can have their inventory cake and eat it. With or without a buffer stock at the point of use, we can give them the flexibility of their own inventory without the associated financial commitment.
Any component that is in our warehouse can be Fedex’ed and with them without fail the next day.
Design-in rules tomorrow.
Distributors that step up to the plate and maintain a well-managed stock profile in the UK will succeed today, but as the market recovers, it will take more than this to maintain the market share gained.
Suppliers have reduced their FAE and marketing resources in Europe, and in the future will need distributors to find the markets as well as the opportunities. Those markets are much more diverse than ever before.
Five years ago, I’d never have dreamt that Anglia’s customers would range from architects to manufacturers of skin care products. It is up to us, as distributors, to find those customers as well as to service them.
Fundamentally, distribution has always been about understanding and supporting our customers and our suppliers. Their needs today are different, and tomorrow they will change again, but that principle will never change.
Author is Steve Rawlins, CEO of Anglia Components