21 January 2010

Patrick Zammit, president, Avnet Electronics Marketing EMEA

Patrick Zammit, president, Avnet Electronics Marketing EMEA, talks with Chris Shaw.

CS: What have been the biggest distribution hurdles to overcome since the onslaught of the economic downturn?
PZ: To manage a downturn of nearly 30% in a very short time is never easy, specifically with high levels of customer service and demand creation support in mind. Our challenges were to balance the drop in sales and the price pressure while keeping the organisation stable and still earning money.

CS: And how were these challenges addressed?
PZ: We anticipated the downturn and started to prepare ourselves by soft saving and a hiring freeze long before the fall. At the same time we invested in structural changes to support customers in vertical market segments and we improved our service levels in supply chain management.

And, as you probably know, we acquired Abacus to complement our product offerings in interconnect, passive, electromechanical components, power supplies, batteries and embedded systems products. Today, after the crisis we are better positioned to serve customers across all technology fields.

CS: Which sectors remained relatively stable throughout the downturn and which suffered most?
PZ: The suffering was across the board, very few areas were spared. From an industry segment perspective, automotive was certainly hit hardest, followed by the equipment manufacturers and the contract manufacturing business. Certain fields within industrial technologies - like renewable energy technologies or medical - remained stable or even grew.

CS: Has the last year seen a change in the demands of customers and suppliers?
PZ: No real new trends, but an acceleration in existing ones – price pressure, more service and improved service concepts (in supply chain management), more emphasis on innovation, especially in growth areas where Europe still plays a global role (environment, lighting, metering, medical, embedded, security etc.).

And finally, more and more business processes are being automated. Frictions in the supply chain are taken away on customer and supplier request, but driven many by the people in between – distributors.

CS: Will the technology supply chain emerge from the downturn as a different beast?
PZ: As we see, even in 2010 the components industry remains a cyclical business. It has improved over time in planning terms but does not overcome some basic issues of manufacturing high tech and financing high tech manufacturing. But with every cycle, the emphasis will shift a bit. We expect Europe to become less strategic from a manufacturing perspective but remaining active from a design standpoint. Our support needs to take into account more global interaction.

CS: Where next for Avnet Inc?
PZ: I cannot speak for Avnet Inc. but from an EMEA perspective, the structure we have with operating groups around computers (TS) and components (EM) with Avnet Logistics as a logistical and warehouse service backbone is excellent and will serve the customers and us for the years to come.

Chris Shaw

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