Thanks to their focused approach, independent distributors can be more flexible when solving procurement challenges, says Charcroft Electronics director, Debbie Rowland.
The biggest difference between buying from the local branch of a global distributor and an independent UK distributor is flexibility. For a buyer, this flexibility means the independent distributor can be more customer-centric when it comes to solving procurement challenges. It can also give low- to mid-volume OEMs a greater influence on strategic decisions made by their supplier.
Customer-centric inventory
Inventory planning is one of these strategic decisions. The inventory profile for the European hub of a global distributor is typically based on the overall run-rate from all its customers throughout Europe. The emphasis is on the fastest-selling lines that achieve the highest number of stock turns. This means customers who buy more specialised devices, in lower volumes, will have less influence. Lower-volume OEMs are also more likely to face higher minimum-order quantities and longer lead-times, instead of ex-stock availability.
In comparison, customers placing relatively low-volume orders can have much higher influence on the inventory holding of an independent distributor. This is not only because of the independent’s smaller customer-base, it’s because the independent distributor usually has a different relationship with its customers.
Charcroft, for example, has been supplying mil-aero OEMs since the 1970s and has developed an encyclopaedic knowledge of each customer’s purchasing profile. At the quotation stage, we always consider the customer’s projected annual usage so we can achieve the best price for the immediate order. It is then the responsibility of the customer’s dedicated salesperson to assess whether the part is likely to be re-ordered. If a subsequent order is likely, the salesperson can ask the purchasing team to buy-in additional inventory. Even a relatively low-volume order can therefore have a direct influence on the inventory holding.
This customer-centric approach not only provides customers with ex-stock availability for subsequent orders, it also allows customers to minimise their own inventory liability without incurring risk.
Creative procurement solutions
An in-house production facility, and the ability to source and work with third-party suppliers, provide further flexibility to solve even tough procurement challenges.
Some of the more unusual solutions have included producing and applying custom QR-code labels to power supplies to ensure traceability in the field, as well as designing and manufacturing custom passive assemblies. Charcroft has even arranged for the body of a capacitor to be shrink-wrapped in an OEM’s corporate colours. Sourcing and liaising with external suppliers, such as metalwork companies, has also delivered custom base-plates for upgrades to legacy devices and helped a defence OEM to protect aluminium housings from corrosion.
As the industry continues to move towards greater globalisation, Charcroft believes there are still many low- and mid-volume OEMs and CEMs who will benefit from the more flexible and customer-centric partnership offered by an independent UK distributor.