© America II Components | February 08, 2012
'Europe is still a growth opportunity'
What is Europe to an independent distributor like America II? A growth opportunity of course.
A lot of manufacturing has moved east, especially in consumer mass production. If you are talking mobile phones, TVs or Brown Goods... then manufacturing is found less often in Europe. But when it comes to high-tech parts that are highly complex in their manufacturing the picture looks quite different. Much of this is still in Europe and will most likely stay. “Mass manufacturing will not be serviced by distribution in any event”, says Andy Groom, Managing Director for America II Europe. “The DTAM - the available market for distribution - is over EUR 8 billion in Western Europe alone. This is a substantial amount of money and America II would want to have a piece of that. The opportunities available for distribution in Europe are very substantial and often high tech. This is very interesting to America II because we sell mostly high tech semiconductors. And we will continue to develop and expand our presence.”
The DTAM - the available market for distribution - is over EUR 8 billion in Western Europe alone. This is a substantial amount of money and America II would want to have a piece of that.Europe its available market is currently largely in the hands of Avnet and Arrow. Not all of it, but a large proportion of it. The rest is divided between a multitude of other players. Opportunities have a way of presenting themselves to those that are ready to take advantage. America II's presence in Europe is currently relatively small, which in itself presents a huge advantage and growth opportunity if you take Andy's word for it: “Because we have such a small presence here, the only way is up.” The financial turmoil within the Euro zone is certainly an issue, both for distributors and other players alike. “Consumer confidence is the key to all business. People lose their jobs, unemployment across Europe is very high, taxation is increasing. Under these circumstances of course we spend less. If we spend less a ripple effect goes through the entire supply chain.” Europe is a tough market right now and will get tougher in 2012. As an independent distributor, America II's business strategy differs decidedly from that of franchised players. “Our own stock is now worth over USD 1 billion. That is one of the highest inventories in the distribution industry. We have 1'900 different manufacturers listed and currently over 3.4 billion components. We have a skill set that maybe the big franchised distributors do not have.” Many customers rely on America II to complement their supply chain. Andy believes that his customers are happy with the service America II provides. “We concentrate on what we are good at; demand fulfillment, not demand creation.” One of the company's core competencies is obsolescence management. The ever decreasing lifecycle of components is a problem for many designers. Just because a component has been made obsolete by a supplier does not necessarily mean the same is true for the design process. “If a part becomes obsolete we will continue to stock it. This is one of the things we do and it is actually one of our core competencies.” One thing that the American distributor is very proud of? Scrupulous checks on quality. I had to ask how they make sure that false components are not an issue for their customers. “There is no denying; there are a lot of bad parts out there. America II will only buy from approved vendors. We are very scrupulous when it comes to checking them. Only when we are absolutely satisfied with their integrity will we do business with them.” America II actually 'puts their money where their mouth is' – to use Andy's words. “A 10 year guarantee. That is not marketing. It is a fact.”
Andy Groom, Managing Director for America II Europe.
Anton Wurr, Marketing Director at America II Electronics explains:Products – on delivery - will go through a very rigorous inspection routine. For this purpose, America II has engaged a third party test house: Premier Semiconductor Services. A test facility in North America is located in America II's distribution campus. “Why we have done that? Because we want to have excellence. The test facility is within the America II campus in North America. When we receive a product it has to measure up in over 50 criteria. To make sure the part is good. If we have any doubts, then that component will go back to the manufacturer or it will be sent for further testing.” America II does suspend vendors – 4'932 as to date. The distributor has – over the past few year – looked through their vendor database and implemented a more stringent set of vendor requirements. Anton Wurr, Marketing Director at America II Electronics explains: “Some of them did no longer fulfill the new requirements. Others – the majority in fact – were suspended not because there were concerns about the quality they provided. Rather that we did too little business with them. We did not know them well enough.” But back to Europe and the growth opportunities here. The main European location for America II is the UK. A town called Letchworth 50km north of London. It is also the main warehouse location here in Europe. Add to that a sales office in Germany – Mönchengladbach – field based representatives across Europe and you have a complete footprint picture. But Andy, Anton and the rest of the roughly 600 employees worldwide see 'interesting and exciting times' ahead. “We are just initiating a global expansion program. And that also touched Europe. From my perspective, Europe is a geographical opportunity. There are several countries to be explored. That means we have the opportunity for quite a substantial growth. For example, we do not have a great presence in France.” Whether or not the expansion will be sales and /or footprint relates is not yet decided. Andy sees exciting times for America II. And for the Southern part of Europe. Headcount increases are also on the horizon. Exciting times indeed. All images © America II
“Some of them did no longer fulfill the new requirements. Others – the majority in fact – were suspended not because there were concerns about the quality they provided. Rather that we did too little business with them. We did not know them well enough.”
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