Independent Distribution
Independent dIstrIbutors: the trouble shooters
In this article James Carbone looks at the driving forces behind the growth of independent distribution over recent years, plus their new relationships with original equipment manufacturers
Fusion Trade’s generalmanager, BillMasterson, opened the discussion: "Equipmentmanufacturers come to us for hard-to-find parts. Semiconductors were in short supply with long lead times. Business is still up significantly so far this year. Lead times aren't as long, but there are still pockets of shortages out there"
Fusion’s CEO Paul Romano added: “Components at the lower
end of the technology spectrumwere in short supply last year and some continue to be an issue in 2011. There were shortages of capacitors, resistors, transistors,MOSFETS and diodes in 2010.
“It was kind of like rolling blackouts. As soon as one problem
area was put to bed, another one cropped up. Shortages have somewhat abated, but there are still fairly significant issues across the board with powerMOSFETs continuing to be a nagging problem and relays are becoming a problem.”
Fusion’s vice
"OEMS are communicating with each othermore. Purchasing and quality people are asking their colleagues at other OEMs who do you use for independent distributors," said Carleton Dufoe, vice president of trade for Fusion
26 | April 2011
president of trade, Carleton Dufoe, said: “Suppliers are now adding capacity, but they are doing it so slowly because they want to be profitable. Some are running lean because they
don't know where things are going to shake out for
them.Memory suppliers such as Samsung are increasing their capacity. Some have EOL'd [end of life] a lot of product lines and are retooling their capacity to lines that will be profitable.”
"Shortages led to a significant increase in business across the board," said BillMasterson, general manager at Fusion Trade
In addition, during 2010 independent distributors have
attracted new customers due to component
shortages.Masterson explained: “These are buyers that did not go to independent distributors in the past. They came to us for shortages and we have been able to retain those new customers.”
Executive vice president of America II, ChuckMagee, takes up
the story, explaining that growth for independent distributors was driven by production cutbacks by componentmanufacturers in 2009: “The supply chain was in flux. Decisions weremade to cut capacities and there was an unanticipated spike in demand.
“We had a 15 to 16month period where eachmonth was
better than the previous.With employee layoffs and capacity reductions at suppliers, lead times stretched to 30 ormore weeks for some parts andmany parts were on allocation.”
However, the scenario has now
changed.Magee said:
“Through January we have not seen the same robust market. The market is receding and has been for a few months. The fourth quarter of 2010 was good, but not at the same level as Q2 and Q3. That trend continued in January. Lead times have eased back. Semiconductor lead times are about eight to ten
p28
www.electronics-sourcing.co.uk
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