Top industry executives set aside their holiday shopping as the Disti Blog questions landed on their desks so we can all learn about their views on just how bad it was in 2009 and whether there are any portents for fairer climes in 2010. I'll keep these on top of the posts right through the holiday until the New Year so you can dip in and out if you don't fancy reading them all in one go.
Brian McNally, President, Arrow EMEA Components
Q1. Review 2009 – As awful as it looked or not as bad as painted?
Over the past year the distribution market in
We rolled out a new European ‘Go to Market’ model, giving our customers access to more streamlined services and the full breadth of our portfolio – all via a single Arrow point of contact. Harnessing the collective commercial expertise, asset management and engineering skills of our existing operations under the Arrow brand has enabled us to further enhance our market offering. At the same time we have continued to develop marketing and technical support that is differentiated by technology and selected end market vertical sectors, such as lighting and automotive, and application level. We are focussed on supporting both the component and solution needs of these segments. For example, we launched the TestDrive programme, which gives engineers free access to development tools for evaluation and we have established the successful Embedded Platform Concept, which gives customers access to dozens of practical solutions to their application challenges.
Q2. How do you view prospects for 2010? Do you see any hurdles to the potential growth next year, e.g. a double dip recession, lengthening lead times?
It is very early to make a prediction given that many of our customers have poor visibility of their end market demand. Inventory levels and manufacturing capacity have been reduced significantly during the last 12 months and, in these circumstances, it is likely that any increase in end demand will lead to spot shortages. This combination of limited visibility and tight capacity will represent a significant challenge to the supply chain. Arrow’s investment in supply chain solutions and breadth of offerings mean we are well placed to mitigate these effects on behalf of our customers. With respect to my view of the market in 2010, I am pleased to see the rate of year-on-year decline in EMEA shipments as represented by SIA and DMASS decrease. History would say that this should continue and lead us to positive year-on-year growth in early to mid 2010.
Q3. What would make life easier in 2010?
A heightened awareness by customers of the presence and dangers of counterfeit components. Counterfeiting is a very serious issue for the whole industry and, in our experience, the presence of counterfeits tends to grow as lead times for legitimate products increase. For customers, inadvertent use of counterfeit products carries genuine technical, commercial and safety risks and it is important that all necessary steps are taken to mitigate these risks. All elements of the supply chain from supplier to the end customer have a role to play. Suppliers must take a robust stance against companies found selling counterfeit goods and customers should ensure that quality control procedures are in place to detect such goods. The best risk mitigation, however, comes from engaging with official, franchised distribution organisations that can ensure the supply of high-quality original technologies backed up by warranties and guarantees directly from the manufacturer.
Another item that would make life easier is a better understanding of the total cost of doing business around the globe. Many customers work to reduce their total cost of ownership by moving production to low cost regions or outsourcing different aspects of their supply chain. Without careful analysis supported by accurate cost estimates customers can be disappointed by their results. As a global distributor Arrow is able to ascertain the total cost of ownership and recommend the most efficient supply chain solution for our customers.
Q4. What will make 2010 exciting for your company?
It will be serving customers and suppliers well with our new ‘Go to Market’ strategy. A challenging environment really highlights the value of distribution. Supporting our customers out of this difficult downturn is really exciting. We have the opportunity to ensure continuity of supply in a difficult time. We can support the start up of the many new designs that have been completed while the market was slow.
In addition to the sectors served by our established specialist teams – including LED lighting, automotive and embedded – we also expect to see opportunities in areas such as aerospace and medical equipment. The trend for applications in these sectors to use commercial off-the-shelf (COTS) components opens up various new avenues and the requirement for long product life spans fits well with Arrow’s expertise. We have a lot of experience managing component end-of-life programmes and dealing with obsolescence.And, finally, 2010 will see the return of a number of European exhibitions, including Electronica, which is always exciting.
Couldn't agree more, Dave. It's a blight on the industry, and I'll be returning to the topic in the New Year
Posted by: mick | December 23, 2009 at 07:44 PM
Great perspective as always. Brian's comments about the counterfeit issue are very real, everyone should take these as serious.
Posted by: Dave Esto | December 21, 2009 at 11:18 PM