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Distribution


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Another strong year for electronic component distribution


2022 is proving to be a good year for the electronic distribution industry, despite tight supply from component manufacturers and continued supply chain disruptions. In this Q&A, Ian Wallace, Digi-Key’s vice president, Americas and EMEA business development, provides an update on how the company is faring in 2022, what he is looking forward to and new developments that Digi-Key is working on to better serve customers


How has 2022 been for Digi-Key? Ian Wallace: It has been a very busy year, as busy as last year, and currently all regions globally are up year-to-date over last year. We wrapped up 2021 growing faster than Digi-Key has ever grown in its history – we had a 65 per cent growth rate last year. While we can’t expect that pace to keep up forever, 2022 is still looking extremely strong, even as we’re seeing some softening of the market overall.


Through the first half of the year, every single transaction driver of the business for Digi-Key is high. Our bookings are up more than 25 per cent over last year, as is quote activity, shipments going out the door and customers searching the website. By every measure we look at, we are just as busy, if not busier, than last year.


What are your observations and predictions for the rest of the year? Our key observations are that customer demand remains extremely strong across all industries and verticals, and we expect that to continue throughout this year and into 2023 as customers catch up, and then perhaps build some safety stock. Specific components still remain a big challenge, however. Gradually, we’re seeing some lead time


dependent on the parts that we stock. We feel very fortunate to be at the centre of the innovation that’s happening around some of these emerging technologies!


What is new with Digi-Key? We’ve recently opened the doors to our brand-new, 204,400 square metre Product Distribution Centre expansion (PDCe), which will dramatically increase the amount of space we have to store product, and it’s highly automated to decrease turnaround time and increase same day order fulfilment to customers.


trends improve from some suppliers, however, within semiconductors, lead times for many components remain at 40+ weeks. While keeping inventory in stock is still a challenge, it has stabilised and is improving. Q1 2022 was the highest receiving quarter we’ve ever had, and we continue to build our inventory.


What challenges are you anticipating and addressing this year?


We’re very fortunate to have suppliers that


What industry trends are you most enthusiastic about at present? Digi-Key’s mission is to enable the world’s ideas, and that comes from the innovations that engineers and makers are dreaming up every day. Sometimes we get to see what they’re working on months or years before it even hits the market. That’s what I’m most excited about.


Our customers design all types of products, and here in EMEA some hot areas we’re seeing right now are in climate mitigation (e.g. renewable energy and electric vehicles), automation & control, healthcare, robotics, smart devices and IoT. All those things are not only inspirational, but they’re heavily


24 September 2022 Components in Electronics


understand the importance of getting product to the engineers and the makers that Digi-Key serves. Inventory flow is the biggest challenge for us, and there are a lot of commitments we’re doing our best to keep.


We’re trying to keep commitments to our customers that we’ll expedite and get product from suppliers as quickly as possible. We’re also trying to keep commitments to our suppliers that our forecasts are accurate, and customers will purchase the inventory and not cancel orders.


Right now, we’re in what we call our soft launch, and we expect it to be fully operational in the coming months. Since Digi- Key stocks millions of parts, we’ll be spending the next 18 months repopulating the inventory to the new PDCe, which is right across the street from our existing facility in Thief River Falls, Minnesota.


What are you most excited about right now?


I’m enjoying having a greater ability to travel and meeting more people in person – meeting with fellow colleagues at Digi-Key at our offices in Munich and Enschede, spending time with customers, spending time with our suppliers and attending trade shows and events. You just gain so much more when you’re together in person.


As long as COVID cases remain relatively low, Digi-Key will continue returning to in- person events taking place across Europe like Embedded World and Electronica so we’re looking forward to being very active in the events throughout our industry. Overall, it’s the return toward a sense of normality, having an increased amount of inventory from our suppliers and therefore having more product in stock for our customers and attending the in-person events.


www.digikey.co.uk www.cieonline.co.uk


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