Digitised purchasing: it’s a game changer

Farnell’s regional sales director of UK, Ireland and Benelux, Mathew Thorpe, explains how a crisis became an opportunity for greater productivity and growth.

While the world was reeling from the Coronavirus pandemic, Daletech Electronics, a mid-sized UK-based electronics subcontract manufacturer, saw the crisis as a catalyst for an extensive review of its operations. The company assessed its business model and pressed the ‘pause’ button. A strategic decision was made to upgrade the company’s processes and embrace digitisation to ensure Daletech could procure electronic components and products with greater productivity and efficiency. It did this with the support of longstanding partner and distributor, Farnell.

Daletech’s managing director, Tracey Dawson, said: “To achieve our goal of being not just world-class but also the best at what we do, we had to have world-class systems and processes in place. Yes, Covid-19 created an incredibly intense environment, but that meant we had the time to look at every single process, from the very beginning to the very end, and see how we could improve them through digitisation.”

Daletech has had a longstanding strategic partnership with Farnell, sourcing products including semiconductors, passive components, onboard electronic components and connectors. The partnership has worked well because Farnell gives Daletech access to an extensive and resilient distribution network. Global procurement through Farnell is a key factor in Daletech guaranteeing a reliable supply chain.

Tracey continued: “Farnell has been our preferred supplier for a good number of years. We absolutely need a partner like Farnell who can support us in the way that they do. When the unexpected happens, you need to be working with suppliers and customers that you trust and that can help you. We cannot survive unless our customers are successful, and we cannot support them properly unless we are fully supported in turn by our suppliers.”

Daletech chose to work even closer with Farnell, developing a robust working relationship to secure their product supply chain and integrate a new software system with a live application programming interface (API) link. By embracing digitisation this way, Daletech overcame a major challenge many contract manufacturers face: checking product availability in real-time while efficiently costing, quoting and invoicing components.

Farnell’s ePass API reduces the time and costs associated with sourcing products by letting customers access condensed data for every product. The system lets customers understand instantaneously what is available, how much an item costs and when it can be delivered. It also helps Daletech manage delays or order cancellations more efficiently by updating scheduled orders. Connected to this, Farnell’s eInvoicing secure online portal offers companies rapid access to invoices and related documents. This removes a big headache associated with processing supplier invoices.

Tracey described the API system as game-changing: “Now that we have a direct digital link to the Farnell catalogue, we can be far more efficient when quoting because we have instant access to live prices and real-time stock availability. The system also tracks everything from end-to-end and manages all purchase orders and invoices more accurately than was possible before. Downloading and checking invoices is now a straightforward process which means we can concentrate our resources on manufacturing.”

Tracey added: “It was incredibly reassuring to us that we were able to use Farnell’s expertise in this way, with live links and live data that we can rely on coming straight into our system. That’s really important to us. At the same time, we didn’t have any problems with delivery because Farnell didn’t have any problems.

Knowing that our supply chain was solid became very important to us. Not only are Farnell’s orders the easiest to book in than any other, but with this system we can now get a same day delivery when we’ve got a product shortage or when a customer wants something manufactured at very short notice. That’s perfect for us because when we are producing prototypes we are in the realms of long-term manufacturing.”

The API’s efficiency and direct access to a first-class distribution and supplier network proved beneficial when another Leeds-based manufacturer asked Daletech to help rework an existing product required for a demonstration.Responding to a change in LED specification, Daletech ordered a replacement and completed the rework in 24-hours. As a result, Daletech is now a preferred supplier to this customer and has completed three new rework orders since the initial contract.

Tracey continued: “The longstanding partnership that we have developed with Farnell gives us greater reassurance in these challenging times as we move forward. Even now, our company is on a high growth trajectory and we’re looking at ways we can diversify and increase our offering to customers. We need to work with suppliers who are on the same trajectory, so it is extremely important that we not only maintain the relationship we have with Farnell but also that we develop it further.

“As an SME, we don’t have the knowledge or the breath of distribution that Farnell has. We need to be partners with suppliers that can deliver product to us on time. Distributors that we work with have to be totally synchronised with our own vision because we don’t have the time to be dealing with problems that are created by suppliers.”

‘Adapt to survive’ is a mantra that Daletech and Farnell have followed before, during and after the initial Covid outbreak and they are determined to help other companies better prepare for the future. Daletech has learnt lessons it wants to pass on to customers who have also been affected by global lockdowns and restrictions. Tracey believes it is important to look at and understand what happened to customers due to Covid and how Daletech can improve the quality of its services to better support them.

Through a combination of maintaining strategic partnerships and embracing digitisation in product procurement and supply, Daletech Electronics and Farnell have shown SMEs they can face the future with confidence. Forging robust strategic partnerships and working collaboratively are essential if businesses are to grow alongside their suppliers and customers. More specifically, this partnership has shown that crises such as the pandemic don’t represent a setback, but an opportunity to do things differently, including taking a new, flexible and more efficient approach to supply chain management.