Brian Ellison is very passionate about his company. He wants the customers, suppliers and employees of America II Electronics to see and understand the dramatic changes the components distributor has engineered in only a few years to reposition itself in the electronics supply chain. In the last weeks Ellison has crisscrossed North America to educate the company’s varied audiences about how the distributor is evolving in response to market needs and what this would mean for their relationship.
He will also be hitting the international market soon with the new branding message of a company that is responsive to an evolving industry and one which refuses to “become irrelevant”. The electronics market is changing rapidly and all players in the design chain and supply chain must re-evaluate their offerings, partnerships and strategic direction to ensure they are optimally serving customers, said Ellison, president of America II.
“We’ve taken critical steps to ensure we do not become irrelevant and to be well positioned to continue serving customers and suppliers,” Ellison said. “We’ve invested a lot of money in infrastructure and people over the years, we’re managing inventory over RFID and we’ve started down the line to e-commerce. Distribution is changing and you have to be a total solutions provider to survive.”
The changes at America II outlined by Ellison during a recent interview with Electronics Purchasing Strategies are quite deep, necessary for its future growth and underpinned by the evolving needs of the global electronics industry, he said. The company was once known as an independent distributor, then a “hybrid or blended” distributor but it has since moved out of the ambiguous player role. America II, he said, has transitioned into a full-service electronics component distributor with a roster of franchise agreement with suppliers and a global player serving customers in North and South America, Europe and Asia. (See: America II: From Independent to Blended to Global Distributor).
This isn’t mere talk. America II is backing up its ongoing transition into a full-fledged franchise distributor with strategic distribution contracts with suppliers and serving notice to the industry that it is ready, willing and able to fight for the rights to sit at the same table with long-established market leaders. It recently terminated its membership of the Independent Distributors of Electronics Association, IDEA, the trade association representing non-franchised distributors.
America II is now looking to join the better known Electronics Components Industry Association, (ECIA), which inherited the mantle of the now defunct National Electronics Distributors Association and the Electronic Components Association as the primary group representing component distributors as well as suppliers. Ellison who was a prominent member of IDEA said he pulled America II out of the organization as part of the company’s efforts to legitimize its operations as a franchised distributor.
“We parted ways with the IDEA and resigned from the board of directors on July 16,” Ellison said. “It is a great organization but our goals just simply don’t cross paths anymore. We are looking to join the ECIA and hope to complete the process soon.”
America II is making more than surface deep changes to its operations, however. It is adding to its roster of component suppliers and notifying vendors of its readiness to not only gain their trust and business but also optimally represent them with all of the offerings they have come to expect from the leading global distributors, according to Ellison.
“What did we do to make this transition and what are we offering our franchised suppliers that these companies would want to come to America II? We offer them the same design creation services they expect at other distributors,” Ellison said. “It was easier than we thought it would be because many of our senior sales team have demand-creation background. We have a base of people who have lived by demand creation and know the franchise model. They have worked for components manufacturers, other distributors or at manufacturing rep firms. We also went out to identify demand-creation opportunities for our customers and developed a training program for this in cooperation with many of the manufacturers.”
This week, America II fired off the latest salvo in its battle for recognition as a major component distributor with an announcement that it had signed an agreement to represent Orion Fans worldwide. The Orion deal is the latest in a lengthening line of distribution agreements with electronics component suppliers that the company has inked in the last year. It brings to more than 50 the number of component suppliers that America II now supports as a franchise distributor, according to Ellison.
Orion Fans represents a major win for America II and stands as a validation of the company’s continuing penetration into critical segments of the electronics components distribution industry. Although a relatively small components manufacturer, Orion Fans has an outsized presence in the electronics industry due to the fact its products are designed into a wide range of products. The industries served by Orion Fans include automotive, industrial, medical, information technology and telecommunications, according to John Knight, president of Orion Fans, a division of Knight Electronics.
“Adding America II as a franchised stocking distributor will be positive for both of our organizations. America II will open up new market areas for us that are underserved in addition to our other established business by offering fast response, short lead times and better inventory management programs that result in lower inventory carrying costs for OEMs,” Knight said in a statement. “America II will also benefit from our broad line of fans and accessory products giving them another arrow in their quiver of outstanding product offerings.”
One week earlier, America II had announced similar agreements to distribute components manufactured by Exar Corp. and Gold Peak Industries. These contracts send a clear message to the electronics industry that America II is a completely new company focused on serving customers with the wider range of offerings expected of franchised distributors, Ellison said.
The group of companies America II represents is likely to keep growing due to other actions the company has been taking. It has added to its technical expertise and is building up the deep engineering expertise some customers and component suppliers need. This year, for example, the company hired an electronics engineer and complemented this in Asia with additional human resource investments, including supply chain management professionals.
“In addition to the 53 suppliers we currently have we are in discussion with about 200 others,” Ellison said. “We are exploring multiple service and supplier options in the various countries where we have a presence and we are expanding into new industry verticals.”
The changes being made at America II were inevitable if the company wants to remain a critical player in the electronics supply chain, concedes Ellison. The market has evolved over the course of the last decade with the number of component distributors shrinking dramatically as the leading players embarked upon a consolidation of the industry.
Ellison said America II has been responding to the changing industry profile over the last several years with initiatives that would keep it nimble and able to meet customers’ needs anywhere globally. The industry needs to “see us progressing in that direction” and the America II message for component suppliers, OEMs and contract manufacturers is simple he said.
“We don’t pretend to be Arrow or Avnet,” he said. “But we can identify your pain points. We want to know what products you have, help you sell them and pull the supply chain together to market your products. We know we have a fit with your customer or supplier and there’s a place for America II in your business.”