Market Review


Trends and developments in distribution


CIE magazine discusses the recent past, present and future of the electronic components distribution market with Mark Burr-Lonnon, senior vice president of global service & EMEA and APAC business at Mouser Electronics


CIE: How has the electronic components distribution market fared this year compared to 2020? Mark Burr-Lonnon: It has been an unbelievably busy year. We were up globally by just over 8 per cent in 2020, but this year every region and every country is dramatically up, with the major countries being up by between 44 per cent to 91 per cent, as well as all industry sectors. I have never known anything like it. In a market as buoyant as this, you’d usually fear that a crash was coming. But there are no signs from our customers of a downturn on the way. Instead, many suppliers are already booked up for 2022, and customers are placing orders well into 2023. Our wide selection, as well as depth of inventory, continues to set us apart.


We had more than 620,000 unique customers last year placing small to medium-sized orders; so even if there is a market inflexion at some point in the future, we feel well positioned to handle it. With such a wide product offering, we won’t have the big dip that some distributors might see. Overall, 2021 will be remembered as a very strong year for the electronic component distribution market, and all the signs are that this momentum will keep going well into and probably through 2022.


What have been the most significant challenges, in your opinion, and why?


There are still supply challenges in the industry caused by global factors. We have worked hard to keep inventory at high levels, but it is an ongoing challenge because some suppliers have been quoting lead times of 50-plus weeks. We have been making tremendous efforts to accurately forecast and pick the components that we need.


Inflationary pressures are the other 46 December/January 2022


issue, and some suppliers have been raising prices due to factors such as rising raw material and transport costs. Prices within the industry will start to flatten out though, as production capacities increase — not just for commodity items but also for semiconductors, discretes and other components. In the meantime, Mouser is working to mitigate any impact on our customer base. Supply chain problems and rising prices are certainly anticipated when the market is this buoyant. Like all industries, hiring staff is also a challenge in just about all of our global locations.


What impact is Covid still having, if any?


There are ongoing impacts in two primary areas: internally, in how we operate our business operations, and externally, in that it has changed how engineers buy and use electronic components. We continue to operate a hybrid model which has


Components in Electronics


been working well, with a mix of at-home and in-office working. In terms of our customers, there is no doubt that engineers are returning to the office because some parts of the job cannot be done remotely. Our business model allows engineers to easily engage and collaborate wherever they are located. Our website is easy to navigate, and we have pretty much any electronic product they might need to find. Whether it is engineers working from home and setting up personal accounts to buy small quantities of parts and development tools, or those back in the office, we want to provide an experience that makes customers return to us. The return of the full workforce after pandemic lockdowns has been slow, and we face a challenge given our growth and staffing needs. But as always, we are working harder and smarter, and learning a lot about our people and processes, and constantly improving what we do.


Has Brexit hampered your business in any way?


We knew that we would have to change the route of supply into Europe from the United States. Typically, before Brexit, everything went to Paris Charles De Gaulle airport and then out again to all European countries. Now we have two routes: one still to Paris, and one to Stansted airport. There were some initial delays in the early days in the UK when the switch first took place, but we are over that now, and it has all been relatively smooth.


What new opportunities have arisen?


The shift to digital commerce has undoubtedly picked up pace, not just in terms of engineers but also consumers at large. As an online electronic component distributor, this shift fits our strengths, and we are at the front of the curve. There are other online distributors, but they often lack the inventory


www.cieonline.co.uk


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