In some ways, Skipworth could be seen as having invented demand creation; Memec specialised in finding new components from start up companies – predominantly on the US West Coast – and selling them aggressively into Europe. Previously, distribution was more about fulfilment. Such was the company’s success that, when it went public in 1980, the offer was oversubscribed by more than 50 times.
In 1991, Skipworth sold Memec to German company Veba, buying the business back in 2000, then selling it to Avnet in 2005. Now, what was Avnet Memec has merged with Avnet’s Silica organisation, with the Memec name being consigned to history.
Coincidentally, another long time name in the electronics distribution industry has announced his retirement. Chris McAneny, director of strategic business development with Future Electronics, has called time on a 40 year career.
Talking exclusively to New Electronics, McAneny said: “We’ve all changed over that time, including the distribution sector. Famous names – including Abacus, Macro, Jermyn and ITT – have all gone and are now part of other organisations.”
McAneny was talking as the news of Premier Farnell’s acquisition by Swiss company Dätwyler broke. “It reminds me of one of Pasquale Pistorio’s famous sayings,” McAneny recalled. “Some companies are too big to be small and too small to be big. And that’s what’s happened in the distribution sector over the last few years.” Pistorio was CEO of STMicroelectronics until 2005.
It would be hard to include Memec in that description: at one point, Memec was amongst the five largest distributors of electronics in the world. But recent times in distribution have been typified by consolidation within two large blocks – the broadliners on one side and the so called ‘high service’ companies on the other. In between these two blocks were companies which fall into Pistorio’s description and have been acquired by one of those blocks. “Those remaining are effectively stuck in the middle,” McAneny continued, “don’t have the scale and business will be difficult for them in the future.”
Although a broadliner, Future sees itself as different from its competitors. “Robert Miller founded Future in 1968 with the view of helping the electronics industry – and the principles he applied then still hold,” McAneny claimed. “Holding inventory to support customer requirements, providing technical resources and value added services.
“Since then,” he continued, “different companies have followed different routes; companies like Memec would have been strong on technology.”
In McAneny’s view, it’s important to support customers through the life cycle of a product, rather than simply shipping components. “We have always wanted to be relevant to our customers, covering everything from new product introduction onwards. For example, Future has a chain of system design centres, where our engineers can work on the challenges faced by customers. Our customers are often short of time and short of resources; we can help them to deliver.
“There’s also obsolescence management,” he continued. “How can we help companies deal with longer product life times, but shorter product cycles?”
Lazlo Mudriczki, who is taking over McAneny’s role, noted: “Our FAEs don’t go into customers with datasheets any longer; we’re now looking to help them solve problems and the System Design Centre network is a significant unit.”
One thing which Future is unlikely to do is to take on the two big high service companies. McAneny: “Future has pretty much the right number of products on its shelves and we don’t want to stock every available semiconductor. We need enough product lines to give us scale, but not so many that we become overloaded.”
However, demand creation remains important. Mudriczki noted: “While Future has put in place a new management team over the last couple of years, the core principles remain the same; the turns model hasn’t changed significantly and the company remains driven by demand creation.”
Looking to the future, McAneny sees Future continuing to invest. “Although the market is expected to show low growth in the next five years, Future is investing heavily.”
McAneny sees three tiers of company in the UK. “There are global companies with UK design operations and these are important because they bring global partnerships. Then there a good mid range UK companies. Then there is a level of companies with good ideas and we are looking to reach those in order to help them grow.”
Mudriczki added: “It’s all about partnerships with those companies, helping them to develop solutions.”
How does McAneny see the state of UK electronics? “You can look back with nostalgia or forward with optimism,” he said. “Today, there are more apprenticeships becoming available and companies are looking for engineers.
“In the past, people started out working for big companies. Today, many people are looking to set up their own business. As long as we can encourage the development of engineering and electronics, we will continue to see the UK creating world beating companies with good products.”