Q&A with Mouser: Market challenges & opportunities
Author : Mark Burr-Lonnon | Senior Vice President of Global Service & EMEA/APAC Business | Mouser Electronics
01 July 2022
Mouser Distribution Q&A July 2022
In this Q&A, EPDT talks to Mark Burr-Lonnon, Mouser Electronics’ Senior Vice President of Global Service and EMEA & APAC Business, who provides an update on electronics industry market challenges & opportunities that component distributor, Mouser Electronics has observed – including his thoughts on COVID, Brexit & ongoing supply chain turbulence…
This Q&A was originally featured in EPDT's H2 2022 Electronics Distribution supplement, included in the July 2022 issue of EPDT magazine [read the digital issue]. And sign up to receive your own copy each month.
Q: COVID-19 has had lasting effects on most businesses worldwide. How is COVID still impacting your business in 2022?
A: Our business, like many others, has been changed permanently by the pandemic. It continues to affect both our internal and external business. The changes to our internal business operations are still in place: we continue to offer hybrid working arrangements for our office staff, which gives them the flexibility to work from home or the office as necessary. Externally, we see engineers, by necessity, are returning to the office in large numbers to perform tasks that they simply cannot do at home.
Thankfully for Mouser, we have modelled our business in a way that enables customers to interact with us irrespective of their location, and we continually expand our huge product portfolio available online. As a result, our business revenue has not been negatively impacted by the pandemic. Instead, we saw a spike in sales in 2021, with most regions growing significantly. However, this increase is not related solely to the pandemic; it is also a sign of the tidal wave of innovation that has been felt across the electronics industry.
In addition, component shortages have driven more new customers to Mouser, and with our breadth of inventory, we’re glad to be able to help supply new customers who may have been struggling to obtain certain products over the last 12 months.
Q: What effect has Brexit had on your business?
A: Brexit required us to change the logistical arrangements for products we import from the US. Previously, everything came through Paris Charles de Gaulle airport for onward distribution to all European countries. We now also use Stansted airport for products intended for the UK market. Despite some initial problems immediately after Brexit, everything is now flowing smoothly.
Q: What are the other main challenges facing electronics distributors?
A: The availability of stock due to ongoing global issues continues to present a challenge for distributors. Maintaining inventories at a level sufficient to meet ongoing demand has been difficult, especially with the 50-week (and more) lead times that some manufacturers are quoting. Matching stock levels to forecasted customer demand is an ongoing and delicate balancing act.
Price inflation by suppliers also presents a challenge to our business. Manufacturers are passing on increases in the price of raw materials and transport of goods that they are experiencing. However, we anticipate that prices will plateau as supply catches up with demand across all component types.
Q: Compared to 2020, how would you summarise the 2021 electronics distribution market?
A: 2020 was very busy, with our global revenues increasing by more than 8%, plus growth across all industry segments. In 2021 however, business really boomed, with our performance in some of the larger countries seeing increases ranging from 44% to 91% compared with 2020. ‘Unprecedented’ would be a good description of our overall performance in 2021. I think it’s safe to say that electronics distributors will certainly remember 2021 as being an exceptional year. As a result, our indicators for 2022 remain positive.
Q: Do you see any major concerns on the horizon and do you have any plans in place for any future downturn?
A: Encouragingly, there are no indicators of an imminent market slow-down, with many of our suppliers fully booked until the end of 2022. We also see strong demand from customers well into the middle of 2023. We have a wide portfolio of products, and our diversified base of over 630,000 customers tend to place small- to medium-sized orders. We feel that these factors will help to buffer us if the market does turn down at some point in the future.
Q: Did the challenging business environment in 2021 present any new opportunities for your business?
A: Across our full customer base, the transition to e-business is accelerating, and we are now reaping the reward for our decision to adopt the online business model at an early stage. We’re not the only electronics distributor with this business model, but we maintain sufficient quantities of stock, and the widest range of both new and legacy products, so that it works for our customers. Our ability to provide stock on time and in sufficient quantities to satisfy customer orders has also opened new opportunities for us.
To further inform and support our online customers, we also have an extensive technical resource centre consisting of application notes, blogs, eBooks and technical articles, which are useful for purchasers and design engineers.
Q: Looking ahead this year, how do you predict the market will evolve?
A: While industrial continues to be our best-performing sector, we see rapid growth in many areas which we anticipate will continue into next year. The ongoing transition to electric vehicles is driving increased innovation by OEMs, as well as by second- and third-tier suppliers to the automotive market. These innovative technologies will increasingly transfer to other vehicle designs, including agricultural vehicles and boats. Next year, we also expect to see significant growth in healthcare, which is a low-volume, but high-value-add sector, where quality and brand reputation are paramount. We expect the move towards remote healthcare provision to also continue.
Mark Burr-Lonnon, Senior Vice President of Global Service and EMEA & APAC Business, Mouser Electronics
Q: Are there any other general observations that you wish to share?
A: Recent unprecedented events have created many difficulties for people globally, but throughout this time the electronics industry has shown its resilience and fortitude. The ability of our customers to continuously innovate in the face of these difficulties has been remarkable. They are designing and developing new products, devices and systems that are smarter, smaller and more robust. These all require increasing numbers of electronic components. The electronics sector is moving at an incredibly fast pace – and it is currently an inspiring place to be!
About the author:
Mark Burr-Lonnon is Senior Vice President of Global Service and EMEA & APAC Business for Mouser Electronics. Focused on serving the needs of design engineers and buyers worldwide, he helps guide Mouser’s global service strategy, as well as its day-to-day international operations.
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