Electronica celebrated its 50th anniversary this year in Munich, Germany and the attendance hit a record-breaking 73,000+ attendees from over 80 countries. This year especially, Electronica had an even more pronounced global feeling and with that came the repeated requests and recognition that manufacturers need flexible services along the supply chain. Globalization and diversification of markets are positives, to be sure, but they carry challenges to manufacturers and OEMs and put demand for new services on distributors.
Growth and momentum palpable
Coming on the heels of positive industry data for the global semiconductor and electronics industry from SIA, ESIA, and financial analysts, the growth seen in 2014 was evident and gaining steam at Electronica 2014. The conference themes certainly focused on IoT, wearables, automotive and security issues, particularly in the face of the growth of ubiquitous computing and cloud dependency for IoT success. At the device and component level, there was a healthy set of solutions presented that support the demands of lower-power, smaller form factor, multitasking, always-on, features and that showed the applicability of these component solutions for a widening market.
Along the trade show floor there were many new solutions on display, from components to devices and the applications to support them. The IoT theme highlights the many avenues for new growth opportunities in the global market. One way IoT was embodied at Electronica was through SmartLife solutions – an important blend of IoT, smart devices, and improvements in efficiency (from individual to municipal levels of energy, water, and other resources). These solutions opens many doors for new CE devices and multifunctional applications for smartphones to govern home appliances, HVAC, security, and other systems, for example.
We also saw increased demand from automation, automotive and industrial manufacturers seeking both off-the-shelf and high tolerance components for a number of end-device solutions for various markets. This demand reflects the diversifying uses for electronic components that is promoting growth and strengthening returns for manufacturers. These are healthy underpinnings and will continue to promote wider adoption of electronic solutions (devices or component sets) in a wider range of markets such as wearable consumer electronics (CE), medical, automotive, industrial, to name a few.
Supply chain strategies in high demand
To meet the new growth and the diversification opportunities, we heard continuously from visitors to our booth as well as in seminars, round tables and on-the-floor conversations, that manufacturers need more flexible services along the supply chain. Extending reach into new markets means extending into new locations and having partners with that reach and local knowledge is a critical component to not only realizing first market opportunities, but also to succeeding without overextending in additional facility investments. Exposure to new customers and new markets goes hand-in-hand with the need for flexible solutions and local knowledge and contacts.
Leveraging the global supply chain opens the doors to significant choices and alternative solutions, but having the expertise and knowledge to navigate the globe is a key force behind the increase in outsourcing of such services. Importantly for manufacturers is the security found through leading distributors' state-of-the-art functional and anti-counterfeiting labs and the vertical integration to extend customized services, as discussed last month by Smith & Associates' Kirk Wehby in EPS. As Kirk discussed in September, "Electronics manufacturers have been going through a period of focused outsourcing; simplifying supply chains to make them leaner, more transparent, and more fluid." At Electronica, this theme was ever-present. The issue of global visibility and having a real-time global view into the market and into the semiconductor supply chain was key.
Throughout our days at Electonica, we fielded repeated inquiries from customers about how to see and leverage more of the global supply chain and how to expose their products to more global buyers. Flexibility, agility and security were critical aspects of the global exposure and visibility. Demand for inventory management services for both purchasing and selling during opportune market events is rising as market volatility and shorter cycles for components increases. Customers and the trade floor buzz underscore the excitement and anticipation of continued, sustainable growth in the industry, but with the need for closer, customized service solutions to increase supply chain agility through improved inventory management at a global level.
Mark Bollinger is vice president of marketing for Smith & Associates