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The changing face of the distribution market
Tuesday, September 26, 2017

Steve Rawlins, CEO, Anglia Components


Steve Rawlins, CEO, Anglia Components

Steve Rawlins, CEO,
Anglia Components

It’s a very interesting time in the components industry.  Consolidation is reducing the choice for buyers.  At the same time, there are many pressures on the supply chain, such as the automotive Industry which is sucking up available component supplies, limiting availability for the industrial market.

Despite this, the UK electronics industry is growing strongly. Figures just released by the ecsn show that UK electronic components sales revenue grew by 24% in May 2017 (when compared to the same period last year).  It shows that the UK market is in great health, with SMEs taking full advantage of the low value of the pound to boost their export sales.  We find ourselves in something of a ‘perfect storm’ situation; increasing demand meets limitations in supply chain. Distributors need to streamline their operations to help customers overcome these limitations and support the demand that they are seeing.

Too often, they do the opposite: streamlining their operations at the expense of the supply chain. For example, many regional and global distributors have replaced UK warehouses with central European warehouses. Although most still offer same day shipment, delivery now can take longer, making the cut-off time for a next day delivery earlier and the arrival of the shipment later in the day.  Airfreight can also be less reliable, as it is more weather-dependent than overland delivery.  UK warehousing remains a benefit to UK customers who need a swift and reliable service.

To ensure the market continues its growth, it’s the responsibility of distributors to invest in the UK’s vibrant small and medium sized electronics manufacturers and find a flexible, instantly accessible inventory of commodity components on an invoice at usage basis, thus allowing the customers to grow.  On some occasions, customers need instant accessibility and want stock of their regularly used components on site, but many entrepreneurial businesses lack the inventory management experience and rely on the distributor to manage this stock to avoid costly excess and expensive line stops due to shortages.

A web based system can step in and provide a solution whereby component usage is tracked in real time, leaving manual usage reports and spreadsheets a thing of the past.  With a real time, web based system, consumption can be tracked and replenishment adjusted in accordance with changing demand patterns.  Distributors and customers can work together to establish a formula for replenishment and agree daily, weekly or monthly shipment cycles with consolidated invoicing to suit both parties.  The booking in of shipments should also be automated to ensure quick and simple replenishments; hand-held scanners and the like can be issued to minimise the risk of errors.

At Anglia we have seen two initiatives that have really supported our small and medium sized customers; Anglia Sigma and Anglia 80/20.  The former is a comprehensive, free dashboard that provides analysis of forward, current and historical orders and enquiries, as well as a vendor rating feature that shows Anglia’s delivery performance.  Our aim with Anglia Sigma is to give customers complete transparency in their trading relationship with us.  We believe we are the first and only electronics distributor to offer this level of information absolutely free of charge to all our customers, through an instantly accessible online portal.

Anglia 80/20 offers a new level of flexibility in the supply chain, which was previously only available to large volume users through consignment/Vendor Managed Inventory (VMI).  There is no start-up cost.  Customers receive an agreed level of inventory on their regularly used commodity components that are held on their site providing instant accessibility.  The level of inventory is scaled according to the customer’s forecast demand and is only invoiced as it used.

In conclusion, it’s a great time to be part of the UK electronic components industry with both challenges and opportunities to overcome.  Through solid business relationships, easy to manage stock control and a hunger to succeed, the best will continue to strive in this growing market.

The key factor in distribution still remains the relationship with the customer and having the technical knowledge to help with design-in support as well as managing stock inventory in a very transparent real-time way.

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