Valuing UK-Centric Distribution

ESUK Sep13 p22 Charcroft 2Despite the trend towards global distributors, some component manufacturers still look to an independent specialist UK distributor, because one-size distribution definitely does not suit all buyers

Essentially, distribution is a numbers game, so globalisation is the key for distributors to boost their numbers by increasing their share of the distribution total available market (DTAM). It is perhaps surprising then, that some of the industry’s leading passive component manufacturers make space in their distribution network for an independent specialist UK distributor: Charcroft Electronics.

As one of the few UK specialist distributors to remain independent, Charcroft has been franchised by global manufacturers such as Kemet, TT electronics and Vishay for ten years or more. Throughout this time, the supply chain has become increasingly global. Initially, this was driven by the largest distributors establishing economies of scale and global reach by acquiring other local distributors. More recently, the internet has introduced global online stock checks and ordering.

Despite this, some large passives manufacturers continue to franchise a UK specialist distributor. The reason is simple: one size of distributor does not fit all customers. When buyers talk about their ‘distributor of choice’, that choice should not be between two distributors with identical go-to-market strategies. Customers want a real choice to find a distribution model with the best fit to their commercial and technical needs.

Certainly, the broadliners satisfy the demands of customers who are buying high-volume, commodity product, which can be shipped from a small number of warehouse hubs, strategically located in Europe, Asia-Pacific and the Americas.

 UK inventory

Unlike a local branch of a global distributor, Charcroft’s business model is UK-centric: inventory is held in the UK; and each field application engineer covers a handful of UK counties, rather than an entire country. Charcroft’s manufacturing facility is also based in the UK and approved as the UK’s only on-shore Vishay precision centre, in addition to manufacturing legacy and custom passives.

For customers, a UK-centric business model can translate into a willingness to help them solve problems, even when the return is measured in hundreds of units rather than millions. For component manufacturers, it means access to the kind of knowledge and experience that can help to identify those customers who will benefit most from designing-in the latest components.

Having a UK focus does not mean that resources are limited. Charcroft still aims to offer advanced logistics and specialist resources, as well as online stock checks and ordering for a growing number of product lines. A UK-based help-desk also provides alternatives for obsolete or hard-to-find passives and technical support for engineers, by phone or via instant online chat.

Responsive service

In fact, it is considerably easier and faster to roll-out new resources or customer-specific programmes in the UK alone, than it is to roll-out across multiple geographies and languages. This is said to provide a faster and more responsive distribution model, which can react quickly to changes within the industry, or to requests from individual customers.

Ultimately, global component manufacturers want to offer customers a choice. They want customers to have the freedom to choose between doing business with a global organisation, or with an independent specialist whose entire business is based in the UK. That is why Charcroft’s UK-centric business model is still valued by some of the industry’s largest passives manufacturers.