Chris Shipway, country director of Avnet Memec UK, talks to Electronics Weekly about active markets in the UK and Europe, the biggest challenges facing the industry, and how the Internet is changing the business...
1. Have you seen any evidence of increasing demand rather than inventory replenishment in the supply chain?
At Avnet Memec UK we have seen a significant increase in demand for our products, especially in the Consumer, Storage and Mil / Aero market sectors. This also appears to be genuine demand rather than inventory correction as the product is being consumed as soon as it is delivered.
Further evidence of immediate consumption is highlighted by the fact that even though the Semiconductor Suppliers lead-times have extended, in some case’s to 20 weeks, customers are still placing and expediting orders well within this lead-time to ensure their own production demands for end product are fulfilled in a timely fashion. In addition “monthly turns”, another good indicator of increased demand, have remained at a consistent level all year.
2. Which are the most active markets in the UK / Europe at present?
As I mentioned in my previous answer, in the UK we have a number of market sectors that are particularly active at the moment. Storage, Consumer and the Mil / Aero sectors are very busy from both a design and production standpoint.
We have deliberately worked hard to ensure that we’ve correctly aligned our product offerings into these active markets to enable our business to grow this year and beyond. We are also now looking at other market sectors that we believe offer continued growth opportunities for us, such as the Medical, Renewable/Green Energy, Fire/Security and Smart Metering and are already working with excellent supplier partners to help us with this objective.
3. Has the last 18 months changed the way you run the business or your approach to the market in anyway?
Most definitely - the market has changed considerably over the last four or five years, but over the last eighteen months it has changed beyond all recognition. With the continued consolidation in distribution channels it was inevitable that we would have to change our approach to the way we market our demand creation products.
To that end, we have very recently moved to a vertical market approach to our selling strategy which has meant a shift in our thought process’s and a change for a number of our employee’s and suppliers to enable better penetration in the market sectors that we have identified. We have seen very positive results from this subtle change already, but realize that this strategy is still evolving.
4. What is the biggest challenge in FY2010
First and foremost, like all businesses, the priority is to ensure not only business survival, but to ensure that the company meets or exceeds the expectations placed upon it by its senior management and shareholders. Continued growth and returning a profit are always the key metrics that need to be met first.
After that, further development to allow for efficient management of the supply chain is vital. Following on from this it’s important to enhance our own and our supplier’s administration systems to ensure accurate information flow between our technical sales team and key suppliers. The challenges do change slightly each year; however the fundamentals always remain the same.
5. How is the Internet changing the business?
As we all know, the Internet has revolutionized the way the entire world works, especially in the sales environment. Instant access to product data, inventory and world wide pricing has meant a massive reduction in time for engineers to receive detailed product data on new and exciting technologies and for procurement personnel to obtain competitive pricing and delivery data for these products.
This has enabled a massive reduction in the time to market for new OEM products which has therefore empowered people all over the world to benefit from the exciting world of information technology.
See also: Q5 - Interviews with electronics industry leaders
Read all the Electronics Weekly Q5 interviews. From ARM's chairman, Sir Robin Saxby, to touchscreen technology firm Zytronic's MD, Mark Cambridge, the business leaders share their particular insights on the UK electronics industry.