EDS 2014 is a joint effort by the Electronic Components Industry Association (ECIA) and the Electronic Representatives Association (ERA), two of the industry’s top member organizations. As the industry descended upon Las Vegas for the annual deluge of meetings, ECIA President and CEO John Denslinger and ERA President Paul Nielsen discussed the critical issues affecting membership, expectations for EDS 2014, and the current state of the electronic distribution industry.
ECN: How would you describe the current state of the electronic distribution industry?
John Denslinger: Manufacturers continue introducing technologically-advanced products at an unprecedented rate. While our distribution members reported modest growth year-to-date, the pipeline of new product introduction (NPI) seems full of growth stimulating opportunities.
Paul Nielsen: I can’t address the state of the electronic distribution industry specifically, but I would say the state of the electronics component industry as a whole is thoroughly mediocre. Our industry had one good year out of the last five or six, and I don’t see much happening to change that.
ECN: What are some of the critical issues currently affecting ECIA and ERA members?
Denslinger: ECIA has several councils and committees working on industry driven issues, including rampant counterfeiting at many levels of the supply chain; instability of sales management; consolidation impact on the supply chain; over-regulation creating business obstacles and uncertainty (conflict minerals); contract manufacturers pushing to be the customer’s complete supply chain; and making America’s supply chain more globally competitive.
Nielsen: The biggest challenge reps are facing is the same challenge that confronts everyone today, doing more, for less, faster. The demands for more (and better) rep services as commissions are being reduced, requires us to constantly question and change our standard operating procedure. For instance, even though our commission rates have been reduced throughout the last year, we hired a business development individual whose sole responsibility is to use all resources and methods available in order to generate new, actionable sales opportunities for our salespeople and distributors. It’s an investment that’s not quite supported by the balance sheet, but you have to try different things.
ECN: What are your predictions for the next 12 months?
Denslinger: ECIA started a confidence survey at the beginning of 2014, published quarterly. The consensus viewpoint of participants indicates modest growth, adequate availability, and steady lead times.
Nielsen: Our business is ahead of last year and I expect that we will end this year, like last year, with high single-digit growth. The growth is primarily due to the fact that many of the programs our OEMs have been dragging their feet on, or postponing, are finally happening. It’s program-by-program growth, not a ground swell caused by any economic upswing or technological innovation, which is not very exciting.