Distributors Expand Supply Chain Services

Oct. 6, 2011
Distributors look online—and off—for better ways to help customers manage their electronic components purchases.


Purchasing professionals and design engineers have long turned to distributors to help them reduce costs, improve efficiency, and take waste out of their electronic components supply process. Distributors say the ability to provide such services is often their trump card when it comes to adding value and securing their place in the supply channel. And in challenging economic times such as these, both parties tend to put a spotlight on supply chain management efforts as everyone seeks to do more with less and squeeze even greater efficiency out of the supply chain.

A late summer announcement from Avnet Express serves as a pointed example of how distributors are expanding their array of supply chain services to help existing customers achieve those goals. Avnet Express is the e-commerce engine for Avnet Electronics Marketing. New enhancements to the site include the ability to view and manage bonded inventory and a custom reporting function that gives customers greater control over product shipments.

Avnet Express vice president Beth Ely explains that the new features aim to make Avnet and its customers more efficient while playing into the multi-channel approach to supply chain management so many customers are adopting today.

“Some activities and transaction types are more appropriately conducted via our traditional support channels,” Ely explains. “But in working with our customers we are finding new ways in which these transactions can be more efficiently done via a Web interface.”

Customize The Supply Chain

Getting business done “your way” is a common theme across most industries today, as businesses of all types seek new ways to cater to customers’ growing needs and demands. The Internet offers a convenient way to meet those goals, many business leaders agree.

For example, AvnetExpress.com’s new bonded inventory function allows customers to view and manage the products Avnet is holding for them in a user-friendly Web interface. Avnet provides the bonded inventory service for customers who share demand forecasts, allowing the distributor to hold inventories in reserve. The new Web option gives customers the flexibility to view product inventory, make adjustments, and see their entire supply pipeline.

“In an environment where you need to be flexible in making schedule changes in order to fulfill perishable demand, access to this information can be key,” says Ely.

With the site’s new custom reports function, customers can view and share with peers what’s in their supply pipeline based on forecast data. For instance, they can customize reports to reflect orders that are scheduled to ship within the next seven days, as well as tailor reports based on pending orders, order status, and other forecasting information.

What’s more, customers can access the customized supply chain “dashboard” around the clock.

“Getting real-time access to information is a great first step, but being able to extract it in a manner that can be shared with others and manipulated for specific purposes is equally important, which is why we designed the offering to allow for both,” Ely adds.

At the end of the day, the enhancements to Avnet Express are designed to give customers greater access to inventory and increased control over their own shipments, essentially allowing them to create a supply chain that works for them.

Ely adds that such efforts are especially important in today’s economic climate.

“As a solution provider, [we] view making our customers more efficient a big part of what we do,” she explains. “Although this is our goal all of the time, when resources become more limited due to their overall business levels, we do see customers seeking efficiencies gains even more ardently. All of these enhancements are focused on saving them time.”

Achieve Balance

In addition to saving time and increasing efficiency, distributors are also focused on providing “balance.” Helping customers balance their inventory is one of a distributor’s greatest challenges, especially given the amount of excess inventory and waste generated in the electronics supply channel each year.

Distributors play a vital role in reducing that waste, says Future Electronics executive vice president Lindsley Ruth, who estimates that anywhere from $12 billion to $20 billion in electronic components inventory goes to waste each year worldwide.

“We view that as an opportunity to move the inventory from customers that don’t need it to customers that do need it,” explains Ruth, pointing to yet another supply chain service need. “We’re trying to play a role to reduce the amount of excess inventory that goes wasted every year.”

Future does so by helping customers achieve an optimal inventory balance so they don’t create excess inventory in the channel. If they do, the distributor will then try to match the excess inventory with customers who need it—even on competing lines from other distributors.

“Our goal and our role, from a supply chain standpoint, is to help them get it just right,” Ruth adds. “The one thing that doesn’t change is forecast accuracy. Forecasts today are as good or as bad as they were 10 years ago. It’s not a predictable science. That puts a lot of pressure on the supply chain organization to make sure there is an availability of supply. It’s a very challenging balance.”

Ruth adds that market intelligence plays a crucial role in the distributor-customer relationship. Without it, trying to tailor such supply chain services to an increasingly diverse customer base is a nearly impossible task.

“Trying to balance the inventory in combination with receiving pressure to drive the prices or costs down is quite challenging,” Ruth explains. “Market intelligence becomes absolutely critical. It’s a critical piece that we have with our customers.”

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About the Author

Victoria Fraza Kickham | Distribution Editor

Victoria Kickham is the distribution editor for Electronic Design magazine, SourceESB and GlobalPurchasing.com, where she covers issues related to the electronics supply chain. Victoria started out as a general assignment reporter for several Boston-area newspapers before joining Industrial Distribution magazine, where she spent 14 years covering industrial markets. She served as ID’s managing editor from 2000 to 2010. Victoria has a bachelor’s degree in English from the University of New Hampshire and a master’s degree in English from Northeastern University.