Sager

Sager Electronics

Feb. 15, 2022
Q&A with Faris Aruri, Senior VP of Marketing at Sager Electronics

1. What has been the impact of the supply chain shortages and other pandemic-related issues on SAGER ELECTRONICS’ revenue growth in 2021?

The supply chain shortages have caused our customers to open up their buying horizons, which has increased our backlog over 50% during 2021 and led to 20% revenue growth. These customers are protecting their businesses by taking product as soon as it is available or making sure to get in the queue early with orders that cover the extending lead times.

2. What part of the business was most impacted by these challenges in 2021?

It is tough to single out one part of the business as all of it is intertwined. Certainly it has created challenges for our buying team who are dealing with constantly extending and largely inaccurate supplier lead times. It has forced us to change our own buying triggers and horizons. Our sales team is seeing an increase in customer expediting activity. The multiple supplier price increases has affected both the buying and selling teams as we attempt to introduce these increases two or three times a year with very short notice. Our warehousing team has done a phenomenal job of managing the increase in receipts, shipments and the amount of product that needs to be stored.

3. What do you expect in terms of SAGER ELECTRONICS’ revenue growth in 2022?

Sager Electronics is conservatively planning for 8% growth largely based on a strong first half already fortified with backlog. The second half is still a question mark, but with lead times not improving one could easily see this business atmosphere continuing for another twelve months. Price increases alone may account for 4-5% growth while demand could far outpace that and leave us with strong double-digit growth in 2022.

4. Is SAGER ELECTRONICS considering retaining any business practices that were implemented in 2020 and 2021? If so, please name them.

Sager expects to retain video conferencing where appropriate and has heavily invested in technology at its facilities and with its people. The company is also including a remote work policy in its reentry to office model. Other valuable business practices include tools that provide electronic workflow and signature approvals used in such things as hiring, contracts and proposals.

5. What is SAGER ELECTRONICS’ capital investment priority in 2022? (e.g., inventory expansion, digital marketplace, new product categories, new end markets, etc.)

Sager Electronics has invested in inventory across all commodities as well as expanded its battery and battery pack business by adding lines and through acquisition. The company has also invested in the development of a new website built on the Oracle Commerce Cloud platform. The new site is designed to provide a best-in-class user experience for both the engineering and purchasing communities. In addition to enhanced keyword search, parametric faceting, improved product attributes and a friendly check-out process, the new environment is designed to better support our customers who prefer to use an online self-service model.

6. What is the most significant risk SAGER ELECTRONICS faces in 2022?

The risks are two-fold and conflicting. On one hand, further extending lead times will cause more pressure on the business in the areas previously described while any economic slowdown whether caused by a resurgence in the pandemic, a drop in demand or other events that lead to over inventoried products. Another risk is the ongoing time spent getting responses to issues caused by lack of availability, raw material shortages, components, capacity, logistics, and transportation.

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