Farnell Invests On Back Of Record Sales

Farnell finished its financial year on a high, posting record annual sales of $1.8 billion, a 20.2 % increase year on year.

Simultaneously the high service distributor has also enhanced its logistics capability.

“Our new distribution centre in Leeds is fully operational,” reveals Rob Rospedzihowski (pictured), President of EMEA Sales for Farnell. “At a total are of 40,000 square feet, it adds capacity as we build our inventory over the coming months.”

“It becomes our primary global distribution centre for onboard components, supplying EMEA, the Americas and Asia-Pacific,” adds Rospedzihowski, although the company will continue to use an Avnet facility in Tongeren, just north of Liege in Belgium to offset post-Brexit challenges, and supply parts in particular to the Irish market.

A Singapore facility will also be used to satisfy local demand predominantly for maintenance, repair and operations (MRO) stock in Asia-Pacific.

“They are bulkier products, more localised and more specific to meet local demand,” explains Rospedzihowski.

The extra inventory encompasses onboard components and Farnell is strengthening its position in the industrial automation market.

“We have not been as strong in that market as we would have liked,” explains Rospedzihowski, “it is a different kind of customer profile. Recent signings Schneider and Omega have benefited our profile and we will further strengthen our position with new signings.”

He anticipates Farnell will add close to $400 million worth of inventory over the next 12 to 24 months. “The investment demonstrates our intent to meet customer needs.”

To enable customers to locate these products, money is being spent on the search and functionality of the Farnell website.

That investment was referenced by Avnet CEO in the company’s Q4 call with analysts.

“With demand indicators remaining fairly consistent, we continue to make investments in Farnell, adding over 18,000 new inventory SKUs in the quarter. Our investment in Farnell’s e-commerce platform and improving the user experience continues to yield meaningful results. Nearly 56% of Farnell’s total sales and 72% of total orders transacted were placed through Farnell’s e-commerce platform this quarter,” said Gallagher.

He added, “We expect to continue to see increased traffic and new customer acquisitions in quarters to come. As we continue to improve our digital capabilities, we expect Farnell’s value proposition to increase and enhance the synergistic collaboration between Farnell and Electronic Components. This collaboration allows us to serve our customers from new product introduction to mass production, and is a key differentiator for Avnet.”

The collaboration is a two-way street. Avnet acquired Farnell to help identify customers that having developed a product for mass production could then move to Avnet for its volume component supplies.

“We can do the reverse for Avnet,” says Rob Rospedzihowski. “Big companies all have design facilities that need small quantities to support that design phase before production.”

“Let’s say you are designing a new phone, it could go through 100 concepts that never make it, but you still need to build the pcb to test it, then drop it and move on to the next solution. So we support Avnet in sampling that small volume type of demand.”

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