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Challenges & Goals for Distributors in 2011

The year is starting out strong for the electronics distribution channel as many forecasts show signs of economic recovery despite the continued challenges of unemployment and high energy and commodity costs.

A reason for optimism is the recent Consumer Electronics Show that had its best turnout in three years with more than 150,000 in attendance. Wireless connectivity was a big deal at this year’s show, and hopes are that some of the new products related to this technology will usher in more consumer demand with increased electronics and technology sales.

We at Bourns believe the distribution sales focus in 2011 will begin to transition from one that is product-oriented to a more direct vertical market and application-centric approach. This new approach will help both customers and the distribution sales channel wade through the vast amount of products to help OEMs select the best component solution set for a particular application. Matching products to applications will also help streamline the design process, which can greatly enhance sales relationships and significantly build market share. This change in strategy and the results it brings is what every manufacturer and distributor ultimately needs to succeed in today’s market.

A challenging aspect to this strategy is that unified and consistent definitions of targeted vertical markets must be applied within the manufacturer and distribution channels. The benefit of the channels using a common terminology related to vertical markets is immense. Setting a common vertical platform will lead to continued improvements in customer and market support. But the big question is: Who will take the lead to manage the consensus of development and adherence to these definitions? Bourns is working with other constituencies to drive these market definitions.

We have aligned key vertical markets with our business units to better serve and address the needs of our customers. With this new vertical market focus, Bourns is positioning itself to grow faster than the market. It is our desire to work with our authorized distribution channel partners in concert with the Electronic Components Industry Association's (ECIA, formerly NEDA) Components Council to better define these differences.

As a member of the ECIA’s Components Council, I plan to submit a project for acceptance to the Council’s agenda repository. Once a committee is assigned, it will be their charter to make recommendations to the Components Council on the use of industry vertical market definitions. The Council will have the task of ironing out these differences to achieve standard definitions that work for the entire industry. Once complete, the Council will then submit a final recommendation to the ECIA board members.

This process could take six or more months, and I promise to report back with the approved and agreed-upon ECIA definitions. The stage has been set for change, and I hope 2011 will be the year that a common vertical platform will be defined for the benefit of the electronic components industry and its customers.

3 comments on “Challenges & Goals for Distributors in 2011

  1. Barbara Jorgensen
    February 16, 2011

    Great points, Dick, and best of luck in creating those definitions. Part of the problem in the electronics supply chain is over-specialization–instead of being in the “memory market” you make flash or SRAM or DRAM or PROM or EEPROM or… Then there's “computers”…and servers, PCs, dektops, laptops, tablets and now “mobile computing” which includes smart phones. But in order for measurements to be meaningful or standards to be useful, you have to narrow things down and define them in some way–such as verticals. Trade associations have been instrumental in doing this and have come up with some real good guidelines. Thanks for your efforts.

  2. elctrnx_lyf
    February 19, 2011

    It seems to make lot of sense to create such a similar terminology for both manufacturers and distributors to better serve the OEM's. But I couldn't really understand what does the vertical products mean, is it some thing related different domains such as medical, defense and consumer, or is it something related to the component types such as actives, passives, rf and LCD etc. 

  3. itguyphil
    February 19, 2011

    Based ont he context, I think it is more related to the components since most end-product devices are identical across industries.

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