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PCB007-May2019

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MAY 2019 I PCB007 MAGAZINE 37 Senese: It used to be, "You have to talk to us." Now, it's, "We have to hear what you have to say. We need to know what you want." Our supply chain has that one down, but our audi- ence needs to listen, work with that, and be aware of the trade-offs you're making. In other words, communicate. Johnson: Where do you see distributors in this conversation? Senese: Distributors are becoming a larger part of the communication, especially in import where most of the communication can be done by someone who doesn't ever touch the prod- uct. They need to know how to talk to both their fabricator's customers and the OEMs to get that information. The distributors have had to become smarter, more aggressive, and they cover more ground than ever before. There was a time when all you needed to be a distribu- tor was a warehouse, some shelving, and a big truck or a good contract with a local trucking company. While that still exists, now you have to have a higher level of interaction with all the customers. That's because the bandwidth of each of these manufacturers is different. Even Panasonic, who has put a lot of money into en- couraging people to have these conversations, still runs out of bandwidth when things get re- ally big. Johnson: It would seem like the distributors could be in a place to be a reliable source of forecasting information. Senese: True. We do forecasting in two dif- ferent ways. One is forward-looking, long- term materials-related forecasting. The other one is related to what we're going to sell next month. The best distributors have incorporat- ed some form of an ERP/MRP closed-loop sys- tem where the customers are either ordering online or with knowledge of what's sitting in the warehouse when they order it. That step up from old-fashioned verbal customer service allows distributors to see what's happening in the markets every month or week and report it to their principals because it's so dynamic. Every year, and over a period of many years, they can predict what they think is happening, at least for their geography. Things disrupt that all the time. Customers don't always survive, and you have to adjust for what's going to happen, but those big things aren't as hard to deal with as fluctuations in the yearly/monthly trends. For them to survive and make money, they have to manage that well. Johnson: I'm sure you can guess what I'm go- ing to ask next. What is the fabricator's role in this? Senese: The fabricator has the hardest job of any of us logistically and otherwise. They end up holding a lot of financial responsibility. Successful fabricators have to do what I would think of as faux vertical integration. They treat their suppliers and customers as if they're part of their company. In other words, they have constant interaction and contact, ask a lot of questions, and provide a lot of information so that people are not in an adversarial situation when something happens. As a material sup- plier, what I want is open communication and to work on making things better instead of the traditional reactive firefighting. We've done pretty well with that with our biggest custom- ers; in Tier 2 and 3 shops, we're all still learn- ing the hard way. Johnson: Tony, do you have any closing thoughts to wrap up our conversation on ma- terials trends? Senese: Materials will continue to change, im- prove, and grow, but keep in mind that they're just materials—not miracles. Everybody in the electronics supply chain has to work together to get to where we need to be. Material sup- pliers are working in the direction we need to, but we need help from everybody else in terms of making this a business that works, which has to do with communication. Johnson: Tony, thanks so much. Senese: Thank you. PCB007

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