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“You don’t have to panic buy if you partner well”
CIE talks to Umasankar Pingali, president, global sales at Farnell
CIE: With the rapid pace of technological advancements and market velocity in 2023, how is Farnell ensuring that it stays up to date with the latest trends and innovations to provide relevant solutions for engineers and businesses? Umasankar Pingali: Farnell is a high-end service distributor. Our business model has evolved over time to adapt to fluctuations in market conditions and the result that we have today is what we believe is a better and more scalable business model than the average industrial distributor.
A lot of what differentiates us has to do with the investment we’ve made in the tools and technologies that give us the ability to offer the widest range of technologies and products to a wide variety of customers - small, medium and large, irrespective of the actual volumes they purchase. Because all customers are treated equally, regardless of size or purchase volume, small- or medium- size customers have just as much opportunity to scale up rapidly and be quick to market as any of their counterparts. A lot of that is down to our unique business model, which is what differentiates us.
Market cycles come and go of course, but the key for Farnell is to stay invested and be part of the solution. There will be times when everything is in shortage, but the most recent period of shortage has now passed and 99.5 per cent of the products we carry are readily available.
CIE: The ongoing global chip shortage has meant sales have slowed, and many distributors have been impacted; how does Farnell plan to bounce back from this market-wide trend? Umasankar Pingali: The genesis for the chip supply shortage problem was due to a confluence of external forces that were largely beyond anyone’s ability to control. However,
26 February 2024
it would be fair to say that a lot of businesses did not plan well for such eventualities and, as a result, engaged in what I would call “unhealthy practices” such as overordering and panic buying.
That is in large part what led to the current state of global inventory saturation. Although the supply/demand situation is gradually reaching a comfortable equilibrium, it will take time.
We were not immune to the recent disruption, but avoided the worst of it due to our use of sophisticated inventory profiling and planning tools that ensure our stock levels remain in line with projected demand. It’s crucial for us and our customers, irrespective of the prevailing supply cycle, to maintain a robust inventory at any point in time. We supply hundreds of thousands of customers and need to be ready to service them all, irrespective of company or order size. From our standpoint, it’s important to stay invested, and when I say stay invested, I’m not talking about maintaining what we have, but continuing to expand our portfolio, which we have done carefully, thoughtfully, and with great success.
Components in Electronics
CIE: There is a growing push for sustainability within the electronics supply chain. How does Farnell address these sustainability aspects Umasankar Pingali: Sustainability is hugely important. I believe there are three components to it. One is the product offering. The second involves retrofit opportunities for the overall market. And the third is compliance. Farnell plays a central role in all three areas. As I mentioned earlier, we are continuing to expand and remain fully committed to adding energy saving solutions across the board to support everything from energy efficient lighting to automation and robotic solutions. That includes wind, solar and other emerging green energy solutions, all of which are areas that are growing very fast. Our commitment is to enhance our customers’ journey to a sustainable ecosystem by enabling them to use the technologies they need to get there. In terms of retrofitting for sustainability, traditional factories tend to include a lot of equipment and components that are not sustainable and tend to leave a large carbon footprint. We, of course, are more than happy
to support the innovation required to retrofit such facilities with new technologies and techniques that bring those facilities up to more modern, energy-efficient standards with the depth of knowledge, experience, and technology we have.
Lastly, compliance is a big one, and it’s also the one that’s a little more complex, mostly because what constitutes “compliance” varies from country to country, continent to continent. But our intent is to be part of the solution by fully explaining what compliance means to each of the players and how we can ensure they are not only compliant but can exceed compliance requirements in certain geographies. From our point of view, even if local legislation doesn’t call for it, safety compliance is still the right thing to do, and if you’re doing the right thing in the first place, you’re already way ahead of the game, possibly for many years to come.
CIE: Technology has made enormous progress in terms of the quality of logistics or automation. Can we expect further advances at Farnell? Umasankar Pingali: Suppliers are doing
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