Top 50 Survey Results
big issues cited by distributors include counterfeiting, inventory control/planning,manufacturing lead times and commodity prices. Others continue to be concerned about outsourcing to lowcost countries, price increases fromsuppliers, and government regulations. Distributors expect several sectors to drive growth this year,
including industrial (28 respondents),medical (26 respondents) and energy (25 respondents). This nearlymatches last year's expectations when distributors ranked energy,medical and industrial, in that order, to drive growth. Other growth drivers this year include lighting (15 respondents),military/aerospace (14 respondents), and transportation (14 respondents). Confidence remains low for computers, communications, telecommunications andmobile communications.
NEWPRODUCTS TO DRIVE GROWTH IN 2013
Nearly all of the top distributors expect new products to help drive growth in 2013. Forty survey respondents think new products will be the biggest growth driver this year, followed by newmarkets, according to 30 respondents. Compared to last year, distributors are less optimistic about
emergingmarkets driving growth in 2013. Only 13 respondents expect smart grid/smartmeters to fuel growth and 10 said energyefficient lightingwill drive growth in 2013. Only 7 respondents expect solar to be a big growth driver, and four believewindwill power growth. In comparison, nearly half of the survey respondents expected emerging markets to be key drivers in 2012 led by smart grid/smartmeters (19 respondents), and energyefficient lighting (19 respondents). Twentyeight survey respondents expect valueadded services to
help grow sales in 2013, up from26 respondents last year. The survey shows that 12 distributors derive 50 percent ormore of their sales fromtraditional valueadded services such as cable and harness assemblies, switch assemblies, connector assemblies, device programming, enclosuremodifications, and terminal block assemblies. Other services include barcode labeling, kitting, tape & reeling, lead forming,marking, special packaging, and testing. Fourteen distributors say 20 percent to 49 percent of their sales
are derived fromvalueadded services. The remaining 15 distributors that responded to the survey question say valueadded services account for 19 percent or less of their sales. Valueadded sales tallied $1.5 billion, or nearly 5 percent of NA revenues. Caveat: Only 41 of the top distributors responded to the question, and five of the top ten distributors did not respond. There is a trend that shows that interconnect and battery pack
specialists derive a higher percentage of their sales fromvalueadded services. Connector specialists buildmilitary connectors, fiberoptic and copper cable assemblies, and connector assemblies. They also cut terminal boards to size and provide kitting services. Interestingly,
30 |May/June 2013
Rank Company Top distributors by VA sales
1 2 3 4 5 6
TTI, Inc. Digi-Key Corp.
Newark element14 PEI-Genesis
Sager Electronics Electro Enterprises Inc.
7 Mouser Electronics 8 9
Hughes-Peters Powell Electronics 10
Astrex Electronics Inc. (1) FY2/12 to 1/13
($millions) $591.5
243.6 129.4 122.0 52.1 46.0 30.2 23.9 22.0 19.4
sales VA %
total sales
65% 25 23 71 24 65 8
38 20 53
($millions) $910.0
974.3 562.5 171.9 217.0 70.7
377.0 63.0
110.0 36.6
Source: ESNA (1) sales
2012 NA
Semiconductor sales grow21% (annual, $billions)
Source: ESNA
several connector specialists including Astrex Electronics, CDM Electronics, andWaldomElectronics posted the largest gains this year. Supply chain services includematerials planning, vendormanaged
inventory (VMI), automated inventorymanagement, bonded inventory, scheduled orders, JIT delivery, consignment,MRP planning, and forecast management. Some also provide life cyclemanagement, reverse logistics, electronics asset disposition, and counterfeitmitigation. Design services are also a source of revenue. Twentyseven of the
top 50 distributors say they provide design services, which are supported by one to 36 field application engineers on staff. Quality remains a top requirement for distributors.Of the Top 50
distributors, 35 of themhave received ISOcertification.Of the remaining 15 distributorswho are not certified, two are in the process of registration, two have plans to be certified and five distributors have no plans for certification. The remainder did not respond.
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www.electronics-sourcing.com
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