MANUFACTURING
limited number of suppliers, geopolitical trade tensions, and ever-changing technology.
As a result, manufacturers are taking steps to secure the supply chain over the long run. One of the key strategies is to be less sourcing the electronic components they will need to manufacture their products. There will also be a continued role for independent distributors. When franchised/ authorised distributors were not able to supply the required parts, independent distributors stepped in during the pandemic and played a critical role in helping keep many manufacturers’ production lines running.
Independent distributors can leverage their extensive expertise and decades of strategic through regional authorised/franchised distribution, manufacturer direct, or surplus/ excess inventories.
Many manufacturers are sitting on excess inventory due to stockpiling parts and ordering from multiple sources to ensure delivery. After having to pay exorbitant prices over the past three years to secure parts, many manufacturers are also looking for ways to reduce costs further, even as prices drop. Some are looking to take advantage distributors provide to minimise cash outlay while ensuring access to inventory. These are traditional services that independent distributors, like Classic Components, have been offering for almost four decades.
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Thankfully, much of the dust has settled, but the work has only begun. With hard-earned lessons from the pandemic, many manufacturers are looking to secure their supply chain and prepare for what will be inevitable disruptions in the future.
Reducing excess inventory When manufacturers faced tremendous lead times on parts, many double, triple, or quadruple ordered since they did not that all these parts were delivered, some manufacturers have excess inventory and aren’t sure what to do with it. If it is true dead stock, an independent distributor like Classic Components can help liquidate the electronic components and get them off the books through various types of arrangements. The company has provided this type of service since 1985, and it can be initiated with a simple email list of surplus items with the original price paid. Classic Components then searches its extensive database to see if any other customers use those parts and can broker a deal between the parties.
We have a global customer base and lots of information about the materials they use. So, if a manufacturer has excess inventory, to one of our other customers.
Classic Components can also list and sell surplus inventory on consignment with, or without, taking physical possession of the inventory.
Essentially, after coming to a consignment agreement, the list of items is uploaded to
our website. We offer complete transparency throughout the consignment process. As we receive inquiries, we share the information so you can decide whether to sell (your surplus) at the offered rate.
Classic Components may even opt to purchase the inventory outright to resell it later.
We buy excess inventory every day and can make purchases on a line-item basis.
Reducing costs
control, manufacturers are also looking to reduce the expense of procuring parts. Some independent distributors have found ways to lower the cost of parts by leveraging their global relationships.
For example, Classic Components procures material in all the local markets where they so is not bound by regional price constraints. With a comprehensive global network, the independent distributor can make purchases in local markets that currently offer the lowest prices and pass the savings to their customers.
Besides its 60,000 square foot facility in Torrance, California, Classic Components has locations throughout the world to support its global distribution business. The company
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MAY 2022 | ELECTRONICS TODAY 13
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