RS market development manager for electronics, Richard Eden, talks about the prospects for 2009 The Association of Franchised Distributors of Electronic Components recent revision of its 2008 forecast for the UK market from two per cent growth to a one to three per cent decline indicates the credit crunch has hit the electronics industry. The outlook for 2009 might be described as challenging but, with over 70-years experience, RS has witnessed many market rises and falls. For this reason, we will continue to plan for long-term outcomes through the introduction of new services and the latest technologies.
For a business to survive in the current climate, let alone grow and prosper, its customers needs should play a major role in its decision-making processes. Companies who flourish will do far more than simply design, produce and sell products: they must exceed the customers expectations for product performance, cost and speed-to-market. This places increasing demands on the supply chain to be dynamic, flexible and innovative.
Value for money
When times are hard, customers demand value for money. This may mean prices of finished goods and components dropping, but it can also mean total cost of ownership. The challenge is extracting greater value from the supply chain by using suppliers who offer improved services and efficiency.
With this in mind, RS continues to invest in value-added services. Our current theme of Bringing Design Together is about supporting design projects from concept to production. Our breadth of product range, packaging solutions, stock availability and low prices provide an ideal source for the latest technologies for development prototypes. When designs move into production, we can handle larger quantities and scheduled orders with reliable on-time delivery from stock.
To ensure competitive pricing on larger quantities, we have reduced thousands of prices by up to 35 per cent. Recognising that electronics customers have distinctly different needs to industry in general, we established the RS Electronics Sales Division in 2007. A team of electronics industry specialists has been assembled to cross-reference, negotiate and quote on bill-of-material requests and accept scheduled orders. We can also supply difficult to source items outside our standard range using our global purchasing network.
Our Production Packaging service lets customers order electronic components in the highest quality industry-standard packaging (reels, tubes, trays, continuous tape etc) for automated assembly, in bespoke quantities, with fast, reliable next-day delivery. This freedom to order the exact component quantity for production, with no cost penalty, is particularly useful when ordering sub-MPQ numbers. It also frees up capital that would be tied up in unused stock. We are already seeing customers taking advantage of this by increasing their order frequency but for smaller volumes per order.
At a time when several distributors are de-stocking warehouses and closing local sales offices, RS are doing the opposite. We are consciously increasing stock levels of Production Packaging items and have just opened a third local electronics sales office at St Neots, Cambridgeshire, for South East-based customers.
The internet is an invaluable business tool for finding information and ordering products. RS started trading over the internet in 1997 and the share of sales of electronic components through this channel reached over 50 per cent in June 2008. Even so, we are continually up-grading our website. The improved search and navigation engine, realtime stock checking and e-procurement solutions, save time, reduce costs and prevent errors when selecting and ordering products.
These services are tailored to electronics customers small batch production needs. Delivering a wide choice of technologies and manufacturers, in the quantities they want, when they need them, they eliminate the need to hold excessive levels of stock.
With next year set to be a challenging time, the most innovative and dynamic companies who offer high performance products and value for money will be successful. RS has worked through difficult economic conditions before and by listening and working with our customers are confident that we have the experience to adapt to changing market conditions.