Veba's demise makes Memec a major player
Staff -- Purchasing, 5/17/2001 2:00:00 AM
Becoming a major player in the global semiconductor market is on the mind of Memec's CEO and President David Ashworth.
"There's a big push this year to get the right to represent our suppliers on a global basis, says Ashworth. For the past two years, Memec has been on a quest to earn global franchises for its top 20 suppliers and now is targeting the next 20 suppliers.
"What has driven a lot of our organic growth over the past two years is our ability to move these lines on a global basis where we might have previously only had them locally or regionally," he says.
But clearly the big news for U.K.-based Memec last year was its independence from the VEBA Electronics Group. The biggest deal in North American distribution consisted of the equity firm Schroder Ventures purchase of Memec, which includes U.S.-based semiconductor specialists Impact Technologies, Insight Electronics and Unique Technologies.
Schroder's acquisition gives Memec its independence, a new shareholder that understands the distribution business far better than the VEBA parent company, and access to research data and market information through Schroder's network to help manage the business better, according to Ashworth.
Although the sale of VEBA Electronics dissolves the Atlas Services business division, Memec didn't lose its logistics expertise. The distributor retained the Reno, Nev., facility, which primarily served Memec's group of companies—Impact, Insight and Unique.
In October, the logistics, supply chain and account sales capabilities of Atlas Services were launched under a new subsidiary called Memec United. It provides a single point of contact across all Memec companies all around the world, says Ashworth.
Memec's chief executive is focused on global expansion of its specialized group of semiconductor distributors into Asia and Japan, and improving communications among regional departments.
Ashworth says there is good communication among the divisional CEOs for Impact, Insight and Unique. But now it's time to take a look at sharing information across regional departments. "We tend to reinvent the wheel or do things slightly differently in each of the regions," he says." But the best thing to do if you have a successful program is to share it with the other regions as well," he says. In general, much of the material is common among the regions; it just has to be updated for local practices and policies.
While Memec is not ignoring e-business capabilities, Ashworth doesn't believe that distributors are doing a significant amount of business through the Internet. "We're building up our capability to provide information over the Internet to help our customers make smarter decisions, help them get to market quicker, choose the right products for their new projects, and to give them technical support," he says.
Since Memec's U.S.-based semiconductor specialists derive about 60% of its sales from the top-tier manufacturers in the telecom market, the inventory glut and slowdown in the telecom market have hit them hard.
Ashworth is still very optimistic about growth from the global telecom sector. "Don't be under the impression that there isn't growth in the telecom business," he says. It's just not as dramatic as everyone reported last year.
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05/17/2001
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