Smith Market Blog

Live at Electronica 2014: Global feeling dominant this year; inventory and risk management key issues for OEMs


The energy and excitement is palpable here in Munich, Germany at the 50th year of electronica. The popularity of the show and the estimated 70,000 people in attendance is certainly marked by to the noise level coming from the bustle as attendees share ideas, new designs, collaborate on overcoming challenges and share in the growing industry optimism. Electronica has definitely taken on a very global feeling this year with Europe hosting the world; underscoring the global networks that are the lifeblood of today's semiconductor and electronics industry. Electronica has truly become a major, global event for our industry.

Inventory services on the rise

Perhaps the clearest message we are hearing on the trade floor on day one, and especially from longer conversations at the Smith Booth 412 in Hall A4, is the growing demand for inventory and risk management. In speaking with numerous OEMs, the need for creative solutions for inventory management to tackle the rapidly changing market demands is topping the list of challenges. Inventory management is not a new topic, certainly, but new, creative solutions that add agility and customized solutions are critical to maintaining leading positions in today's truly global marketplace. OEMs need the flexibility to respond quickly to volatile market shifts, either sudden increases or decreases in demand, the ability to have customized hubbing and streamlined, integrated solutions for managing inventory and staying ahead of pricing and demand trends. All these challenges are compounded by the regional diversities and logistics complexities as markets are truly global and dispersed.

To address the global challenges, outsourcing is again on the rise in the industry, especially for electronics manufacturers, where core competencies are the focus both within the company and as they turn to partners to improve market agility. As we've already confirmed on the first day at electronica, this year in particular demand is high for customized, global services around deep logistical capabilities, PPV programs, and various inventory solutions (see the recent article by Kirk Wehby, COO, in Electronics Purchasing Strategies for more details).

Quality is always prime

Beyond market expertise and agility, we are hearing on the trade show floor that quality is still essential. Customers demand that the highest industry standards be upheld and demand that partners hold industry recognized accreditation. With more services being outsourced, quality and transparency are all the more critical today when choosing a service provider and distributor for component purchasing, testing, handling, repackaging, remarketing hubbing and related services. Transparency and quality must be part and parcel of the global services provided, particularly because the expanding supply chain introduces more vulnerability points that can be opportunities for counterfeiters. The best risk management is expertise in navigating the complex industry channels coupled with accredited, quality experts operating in sophisticated ISO 17025 testing laboratories. Smith exemplifies these capabilities and provides these best-in-class, global services to our customers while attending to individual customer needs and goals.

While there is considerable focus on the new wave of products and the components supporting them as the IoT expands and devices proliferate for a widening set of markets, quality, agility, and customized services are among the top reasons we are hearing that people favor Smith & Associates as their leading independent distributor. We look forward to speaking with many more people over the next couple of days as we report daily with more details from the many events and insights.

Mark Bollinger
Written on Tuesday, 11 November 2014 14:38 by Mark Bollinger

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