Hybrid technologies are emerging all the time and in reflection of an evolving industry, business models are also adapting to fit the market place, as Michelle Winny, Editor of Electronics finds out in an interview with David Mellor, Director of Cyntech Components; a 'DistRep' with a difference!
Electronic components are the backbone of many modern industries with electronic devices infiltrating most applications, spirited by a constant demand for new innovations.
Solutions ranging from the practical tried and tested to the farfetched and at times not-yet-invented make the lives of all involved, from design and manufacture to supply and distribution and the end user, just that bit more interesting, not to mention the all important potential for commercial impetus.
Cyntech Components, which specialises in the supply of standard, modified standard or custom electro-mechanical components and power supplies, are no stranger to taking up the challenges presented by customers with some very specialist demands.
The company models itself on being a 'design-in partner' working closely with select 'niche/quality suppliers' and with this, help develop and supply a variety of standard and specialist solutions for a broad range of applications.
David Mellor, Director of Cyntech Components who has over 20 years of experience in the electronics industry, describes the company as a “DistRep (or Reptor!).” This is a mixed model of distributor and commissioned rep.
Mellor advises: “Around 40 percent of European design is undergone in the UK and although a lot of production goes offshore it still makes us very important for a foreign supplier.
“A traditional distributor would buy and sell and lose the design-in if they could not make a good return. We are different, we buy and sell but if we cannot add value to the customer by keeping stock, or if there is a very low margin expectation due to volume etc. then we will still make sure the design-in (the suppliers part is on the BOM) is made and then put the end customer and our supplier together and we then take a commission. This ensures the design-in is complete and both supplier and customer are happy.”
The company was recently tasked with adapting a package LED solution for the tropical marine industry. Unbeknown to the company, and perhaps to most people, the tropical fish industry attracts the interest of some 10,000 people and was an unexpected market for potentially high-demand.
The use of high-power LED components offers both retail and consumer markets the ability to greatly enhance the appearance of their fish tanks, where LED matrices can be configured to showcase multi coloured fish, corals and crustaceans to the best effect, when compared to traditional fluorescent lighting for fish tanks and the solution proved vastly popular.
With winning business acumen and stellar design-in strategies like this it is no wonder that the company is soundly confident about expectations for the year ahead. In general, Mellor expressed belief that there is: “more confidence in the market this year.”
As the company supplies to major distributors such as RS Components, gauging by the fact that the company's supply levels to the distributor have picked up, Mellor advises: “this is a good barometer to measure market conditions.”
A contributing factor that goes a long way to ensuring success for the company is the personable approach of “being easy to do business with” and to “do simple things to make business easier”. This is something that Mellor holds in close regard and, teamed with the company's supply and distribution services, is key to the success the company is currently experiencing with a reported turnover of £1.1 million in 2011.
Other key market areas for the company include solar connectors, which the company is currently experiencing significant growth in.
According to a new report from IMS Research it is forecast that there could be a: “20GW opportunity for the PV market with opportunity for the upgrade or replacement of existing capacity over the next four years.”
The research report goes on to say: “Aging equipment requiring upgrade or complete replacement represents the biggest opportunity currently and this is where the majority of equipment revenues will come from in 2012.”
The report found that this could provide a: “20GW opportunity for equipment suppliers, generating some £15.5 billion in revenues over the next four years.”
For companies such as Cyntech these are compelling statistics for markets such as solar, which are driving demand for supplying existing and developing next-generation devices to update old equipment.
When asked of the expectations for the supply and distribution market across the industry over the next five years Mellor concluded: “The larger companies will look to buy smaller companies to improve their profit and loss and give a return to the investors.
“The market won't help them grow in the short/medium term so in order to achieve growth they will need to do it via acquisition.”
Mellor anticipates: “some return of medium to high-end technology products back to Europe due to cost escalation in the Far East. Due to acquisition activity there will be more of a need for specialists perhaps not as a function of customer pressure but from suppliers as they see themselves pushed further and further down the linecard of the broadliners.”
Ensuring that the right parts are specified for each application is critical to the reliability and operating life of the end products. That's where the new breed of specialist distrep adds real value to UK electronics manufacturing.
So there is opportunity out there but as so often is the case in the electronics industry, the ability to adapt to market needs remains key to unlocking market potential and is certainly good practice for a way forward.