During a time when the electronics sector is experiencing unprecedented component shortages, the independent electronics distribution channel becomes a critical strategy for many OEMs. The key to real success, though, is building those relationships before the hard times start.
We sat down with two executives from Fusion Worldwide, which sources, stocks and delivers electronic components and finished goods to a variety of customers to talk about the current shortages, as well as how the independent distribution market is evolving and changing. Fusion Worldwide specializes in sourcing obsolete, hard to find and allocated product, but also offers inventory management and other supply chain services. Last fiscal year, the company pulled in $525 million in revenues, making it the largest independent distributor in the EBN/EPSNews 2018 Top Global Distributor Report. The distributor projects that revenues will grow substantially to $750 million in the 2018 fiscal year which ends in September. The company employees 150 people worldwide.
We sat down with Fusion’s Paul Romano, chief operating officer, and Tobey Gonnerman, executive vice president.. Romano joined as the first employee at the company in 2001. He has also held similar roles at Real World Electronics and Converge. Gonnerman is responsible for global sales. He joined Fusion in 2005 and held various leadership positions in purchasing before assuming his current role overseeing the company’s trading operations.
EBN: How does your company differentiate itself from the competition?
Romano: We differentiate ourselves in a variety of ways. The first is technology. Our Scout system helps us stay ahead of what’s happening in the market. We can quickly look and assess what’s happening, keeping everyone in the organization around the world on the same page. Our second differentiation is quality. Customers want to ensure that components are authentic. We’ve taken a leadership role in creating processes to ensure quality. A third differentiator is our people and our ability to communicate globally. Many think it’s important to have many offices around the world, but it’s really about all being on the same page and working with the same information. We have developed the ability to communicate globally and that benefits both our customers and ourselves.
Gonnerman: The globalization piece is the foundation of our success. We understood from the beginning that we are, at heart, a service organization. We make sure that we have seamless real time communication and we realized early on that collaboration around the regions, regardless of how large our customer base grows. We have a belief system and a culture to go along with the technology to make sure that customer communication as a first priority remains consistent. =
EBN: What are your customers looking for in terms of support from your company?
Gonnerman: Open market distribution has evolved a lot from being the necessary evil of twenty or more years ago to becoming an instrumental part of supply chain strategy. Customers, especially large fragmented global OEMs, utilize the open market as part of their total supply chain answer. If they aren’t then they are costing themselves opportunity and exposing themselves to unnecessary risks. In times of shortages and instability, supplemental suppliers are mission critical to keeping lines up and running and also to mitigating against inevitable, unforeseen circumstances. It used to be that OEMs would approach independent distributors cautiously and as a last resort, but over the course of time we’ve been able to show the value we can provide, in finding product they can’t find themselves and offering competitive alternatives in terms of pricing that they might not be able to access. We’ve learned a lot over time and shaped our entire system and methodology to be responsive to our customers. We’ve inserted ourselves into their supply chain process in a way where we are now playing a critical role as a complimentary supplier.