7 minute read
Supply Chain
Mouser beats supply chain issues
The global supply chain was hit hard by the pandemic and worldwide shortages and long lead times still prevail. Electronic components and semiconductors were among the most pressured product types, affecting almost every sphere of our lives.
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Industry Update talked to Mark Burr-Lonnon, Senior Vice President of Global Service & EMEA and APAC Business, Mouser Electronics, about the company’s approach to countering supply chain issues. Part of the Berkshire Hathaway family of companies, Mouser is a leading global authorised distributor of semiconductors and electronic components.
IU: What’s the state of the supply chain for these products now, and how does Mouser work around issues to ensure it has stock to distribute?
Mark Burr-Lonnon: Many sectors, including the electronics industry and its supply chains, have been affected by the impacts of the pandemic, causing delays and disruptions. Manufacturing contractions, rising demand and unavoidable market fluctuations have made on-time sourcing a challenge for the electronics supply chain. With the widest selection of components in the industry, Mouser Electronics is a leading global distributor for more than 1,200 manufacturer brands, offering the most choices for buyers’ BOMs. We work closely with these manufacturer partners to monitor and replenish products, maintaining vast inventory levels.
During the past two years, Mouser teams have been monitoring shortages and working closely with manufacturers to replenish products as quickly as possible and ensure that on-order inventory becomes available to ship out. Our strategy to invest in inventory regardless of business conditions has enabled us to aggregate supply and demand, helping customers tide over supply chain instabilities. Customers can rely on us because of our large inventory and ability to offer the widest product selection in the industry, with 1 million unique part numbers in stock. Although we are not immune to long lead times from manufacturers, our customers know that we are well positioned to help mitigate supply deficits.
Mouser also offers tools and resources to give the design engineer a “best-in-class” buying experience, making it easy to find the newest products for their designs. Mouser’s core value proposition is specializing in the rapid introduction of new products and technologies regardless of market challenges. As the New Product Introduction (NPI) leader, we continue to add more inventory and bring in more NPIs, striving to give the design engineer the latest technologies for their designs.
IU: Global semiconductor revenue is down from 2021 but still expected to grow 7.4% percent in 2022. Have you seen related growth in your business? Where are you seeing demand from for your new components?
Mark Burr-Lonnon: There is a strong demand for electronic components worldwide, and we are shipping hundreds of thousands of components weekly. This escalating demand is being driven by emerging technologies such as electric mobility, 5G, data centres, the Internet of Things, AI, robotics and industrial automation. Home automation, wearables and introduction of other new technologies will continue to influence markets well into the next decade.
Now more than ever, the role of distributors has become pivotal in guaranteeing regular supplies of critical components. Mouser has always been at the forefront of adapting to market challenges. Over the past several years our inventory levels have grown to well over 1 billion USD, with over 1 billion USD of inventory on order. Our business has grown across every region.
IU: Have chip manufacturers been able to keep up with demand?
Mark Burr-Lonnon: Manufacturers are still facing a challenge keeping up with the increased demand for parts, but we work closely with our partners to help improve supply assurance. As the fastest-growing distributor in our industry, we added a record 113 manufacturers to our product line card last in 2021 and 40 in 2022 so far. We continue to invest in our website and have implemented many digital processes to produce an industry-leading e-commerce website to transact business in 27 currencies across the globe. We are committed to delivering 100% certified, genuine products to our customers that can be fully traced to each of our manufacturer partners.
IU: How does Mouser support the design engineer community in the face of supply shortages?
Mark Burr-Lonnon: Mouser is a design engineer-focused company. Our commitment is towards introducing the newest products, along with added technical support and resources for the global electronic design engineer and buyer communities. We enable innovation by being a conduit between the manufacturer and the design engineer, making available the newest products and technical resources for creating new design.
We provide design engineers the fastest and easiest online access to the widest selection of product lines for their designs, including flagging products not recommended for new design (NRND). We collaborate with our manufacturer partners
Mouser beats supply chain issues
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and constantly update customers on expected delivery timetables. Customers can register for notifications, so that they can be informed of a part’s availability in real time. Our online resources, such as order automation and our FORTE Intelligent BOM Tool, simplify the buying process by mapping customers’ requirements while creating a new BOM. Our website is enhanced with search tools and guides for buyers and engineers.
We work with customers to better understand their project needs and forecast component needs. As the industry’s leading NPI distributor, manufacturers rely on us to introduce their newest products into the global marketplace. In turn, we help engineers and designers innovate with the latest components for their upcoming prototypes, instead of having to rely on older parts that are NRND.
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IU: What does Australia’s semiconductor distribution ecosystem look like? How strong is the Australian market for Mouser products and where do you see growth opportunities?
Mark Burr-Lonnon: Australia is a mature market, driven by B2B demand from manufacturing, health, defence, and telecommunications. Amongst the developed countries, Australia has the 15th largest market size for electronic components, with total demand reaching more than 5 billion USD. Nearly 60% of this demand is fulfilled by imports. So, the industry must rely largely on international suppliers, despite a healthy and largely profitable domestic production. There have been calls for increasing self-reliance, and policies may lead to greater internal production. We see a role that Mouser could play to drive innovation in critical sectors.
IU: Mouser recently expanded its global headquarters and distribution centre to meet the growing needs of the company into the next decade. Where are you anticipating strong growth?
Mark Burr-Lonnon: We already ship products to over 650,000 customers across the world from our 93,000-square-metre Global Distribution Centre and facilities in Texas, United States. We stock more than 1 million components, with no minimum order quantities on most parts. Innovators can order even a single part for a prototype — and we will deliver. Orders can be processed, no matter how diverse or complex, usually within 15 minutes — sealed, labelled, and ready to ship. Our Global Distribution Centre uses advanced automation technologies for storage, stacking, picking, and sealing of shipments, enabling processing up to 14 orders per minute.
Mouser has installed 120 vertical lift modules, the largest such installation in the world. Vertical Lift Modules, or VLMS in short, are essentially giant shelves with automated extractors that bring the parts to the employee’s workstation. This increases efficiency and floor space and reduces an employee’s walking time by 45% or more. Mouser will continue to invest heavily in state-ofthe-art automation that can improve working efficiency and increase accuracy and speed of order processing, helping customers reduce time-tomarket and gain competitive edge.
We’ve just broken ground on a new expansion, which will add another almost 93,000 square metres of warehouse and automation space to further expand our capabilities. This automation allows employees to work smarter while improving accuracy and speed, as well as improving efficiencies.
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