Squeezing out costs is a never ending task
Article Abstract:
A recent study suggests it is not always easy for distributors and wholesalers in the electronics market to identify and remove redundant activities. A recent report from Arthur Andersen & Co estimates redundancy between channel suppliers and distributors close to 30%. According to the report, distributors and wholesalers believe 20% of product costs are generated by redundant activities in the supplier/reseller/customer chain. The 20% consists of 11% in costs duplicated between resellers and manufacturers and 9% in costs duplicated between distributors and customers. However, suppliers contend that only 17% of the costs are accountable by redundancy, consisting of 10% in costs duplicated between suppliers and distributors and 7% in costs duplicated between distributors and customers. Per the report, sales force activities and inventory management are the most common areas of duplication in the distribution chain.
Publication Name: Electronic Business Today
Subject: Electronics and electrical industries
ISSN: 1085-8288
Year: 1996
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How the mighty (growth) has fallen
Article Abstract:
Cahners Economics forecasts growth among distributors to be in the range of 11.7% for 1997 while industry insiders place the figure at 8% to 17%. The depressed growth rate follows three years of extraordinary growth, a trend that ended in 1996 due to the end of the shortage of DRAMs and tantalum capacitors and the abundance of components that were previously hard to find. For 1996, Cahners estimates growth for North American distributors at 11.6%, significantly down from the previous years' 25% growth average. Despite slower growth rates, however, analysts predict that distributors will perform better than component makers because of value-added services, such as integrated circuit programming and auto-replenishment systems. As long as interest rates are favorable, 1997 will also be marked by consolidation in the distribution industry.
Publication Name: Electronic Business Today
Subject: Electronics and electrical industries
ISSN: 1085-8288
Year: 1997
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Keeping customers content
Article Abstract:
Electronics and semiconductor companies are increasingly demanding that their various suppliers and distributors work in conjunction with each other to provide seamless value-added services and minimize supply cycles. Some large manufacturers are able to house numerous distributor facilities directly on their premises, giving the suppliers a more active role in daily operations and product component planning. This system helps reduce inventory levels for both the supplier and manufacturer and increases the ability of both parties to respond to sudden product-development fluctuations. Industry executives laud the trend towards enhanced value-added services and consolidated distributor operations, suggesting that such an arrangement is in the suppliers best long-term interests.
Publication Name: Electronic Business Today
Subject: Electronics and electrical industries
ISSN: 1085-8288
Year: 1997
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