Procurement Faces More Challenges Than Ever: Exclusive Report
by 
Arrow's Darryl Shaper
When the Internet first enabled b2b e-commerce, companies that wanted to buy and sell electronics components tried a lot of different models. Marketplaces similar to Amazon.com appeared that displayed parts for sale (called OPI—other peoples’ inventory) no matter where the parts were located. Auction sites posted inventory (the eBay model) and allowed buyers to bid. Trading sites evolved that matched companies that had components with buyers that were looking for them (for a fee). These dot.com sites have a few things in common: they started with an e-commerce model and adapted it to sell electronics components. They are also, with very few exceptions, gone.
It’s fair to say that online marketplaces created a host of problems for electronics companies. Anonymity allowed fly-by-night companies to set up shop; post inventory; collect payment and disappear. “Blind” trading led to counterfeits more easily entering the supply chain. The ability to monitor global component prices—similar to commodities exchanges—disrupted pricing models. Most importantly, electronics procurement professionals weren’t able to get the mix of products and services that they needed from these dot.com distributors.
The distribution channel is still working on the best mix of e-commerce products, services and functionality for the electronics supply chain. The industry’s two largest distributors have both within recent weeks announced initiatives geared toward their “digital transformation.” At Arrow Electronics Inc. one of the more recent efforts is the upgrade of Arrow’s Verical.com website. Verical, which was acquired by Arrow in 2010, aims to bridge the gap between distribution’s forecast-dependent fulfillment model that pipelines inventory—some of it not built yet—into the supply chain; and the ready-to-sell inventory model of catalog distributors and independents.
Verical’s general manager, Darryl Shaper, recently joined Arrow from e-commerce business hibu, formerly Yell Group. Hibu delivered print and digital marketing solutions to small and medium businesses in the UK, USA, Spain, Chile, Argentina, and Peru, helping them grow, attract new customers, sell online and offline, and to be more efficient at running their business. Shaper emphasizes that one of Verical’s strengths is the depth of the inventory that’s immediately available for shipment – in volume.
This article was first published on Verical Connect; to read the rest of the post please link here.
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