COVER STORY Beware of complacency in 2024 By Steve Rawlins, CEO, Anglia Components PLC
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s we look to the year ahead, the supply chain looks healthier than it has for some time, with good levels of inventory overall, and shorter lead times than we’ve seen for some time. Customers should beware of complacency though, as the economic headwinds that are already visible will mean that this situation won’t last. Inflation continues to have a sustained impact on the economy. Although there is likely to be limited growth in the industrial sector, we expect other markets including those driven primarily by consumer spending to decline.
The market situation
The build-up of inventory in the distribution channel and at end customers is a consequence of these economic factors, which has led to a decline in demand as this stock is consumed. Our current expectation is for this situation to
continue until the second half of 2024, at which point we are planning to review our sales budget when hopefully we have a clearer view of the market.
Therefore, it is important not to be complacent. The current oversupply situation is tempting some customers to source on the spot market, and not place forward orders or schedules. No market condition lasts for ever, and tempting though it is to assume that the current oversupply situation will be with us for a while, the current oversupply situation will correct itself as inventory in the supply chain is used up. There is an increasing risk that lead-times on some components may start to extend again as soon as the second half of 2024 which could catch purchasing teams out if they are not planning for it correctly. Prudent customers should create their best forecast based on their own demand and plan accordingly. Services like Anglia 80/20 can help by taking the risk out of holding inventory from the customer’s perspective,
allowing them to have inventory dedicated to them instantly accessible, but not pay for it until they use it. It is backed by Anglia’s exceptionally strong inventory position. As a privately owned business, Anglia maintains high levels of inventory as a proportion to the size of its business.
Importance of people
Work-life balance has always been important and has come under the spotlight in the last few years, in an ever-tighter labour market we are acutely aware of the need to look after our people so that they can continue to look after you, our customers. In 2023 we brought in a series of measures which included reducing working hours and closing at 1pm on Friday along with increasing holiday allowances. Other new benefits now extended include a comprehensive health plan, with a range of features to assist with the health and well-being needs of our employees and dependents. Anglia is also now offering company life insurance, additional flexible leave for important family events and the opportunity to access pay early in times of financial need. Employees have responded very positively, and these changes, including the early closure have been implemented with little or no impact on our customer service.
Importance of the environment As the effects of climate change become more apparent every day, businesses can no longer stick their heads in the sand and leave the problem to regulators and the government. It is up to everyone to take these issues which affect our planet seriously. Those that implement good practice at a time of their choosing will enjoy a competitive advantage when regulations are brought into force, as they surely will be. During 2023 Anglia worked in partnership with ClimatePartner to measure the carbon footprint and climate impact of our business. As part of this scheme, we are now offsetting the carbon emissions due to our business operations and have committed to a robust forward-looking plan to reduce our emissions in the future. We already maintain an effective Environmental Management System (EMS) that meets ISO 14001.
This commitment enjoys enthusiastic backing at all levels 10 December/January 2024 Components in Electronics
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