The power electronics industry is worth £135 billion with the global market growing on average at 10 per cent per annum
Today, power electronics plays a critical role in most aspects of our daily lives, from renewable energy, transportation, aviation, automotive, medical, industrial and electronic devices.
On average semiconductors account for 10 per cent of all total power electronic sales and today our homes are proliferated with power electronic devices: TVs, computers, mobile phones, washing machines, fridges, freezers, cookers, hoovers and energy-efficient lighting.
Distribution plays a massive part in the power electronics industry for numerous reasons, we caught up with Paul Bentley, managing director of GD Rectifiers to find out what the future has in store for some of the UK’s biggest distributors.
How has power electronics distribution changed in the last 22 years?
The market has grown considerably over the past 22 years with lots of new innovations and technological developments contributing to the rise of local distributors. The size and growth potential of this market makes it a very competitive industry. With the rise of SMEs competing for low-volume business the market has become very crowded. Annual forecasts for the industry change year on year and these are affected by material costs, demand in innovation and technology, consumer trends and products in the pipeline. The power electronics industry is lucrative market when the demand is high, businesses experience peaks and troughs. A shift in trust and responsibility has changed how the distribution model works, distributors are no longer just middlemen for small companies wanting to purchase products they are now an extension to the big manufacturers and generate their own business through their knowledge and expertise.
What has been the biggest challenges over the past 22 years?
The biggest challenge we’ve faced in distribution over the past 22 years has been the selling of grey market goods. Over the years numerous countries have sold many commodities that have not been supplied by the original manufacturer to the market. These commodities are sometimes more cost effective because they are not authentic and purpose-built components by the world’s best manufacturers. However, most people that buy grey market goods are hobbyists or first time buyers that shop elsewhere the second time round.
What does the future of distribution look like?
The future is set to be bright for distributors, with the growth of electric propulsion in the automotive sector and the increased demand for renewable energy devices in the industry, distributors should start to feel the market pick back up in 2017.
Most businesses know the benefits of buying components direct from the UK and from official distributors – they know the quality, lead-time and price of the component is not jeopardised.
Most of the world’s leading power electronic manufacturers use franchised distributors to sell their products (and generally smaller business) regionally and this won’t change. The benefits to a customer using a distributor include: a convenient way of shopping, the distributor acts as a one-stop-shop, allowing a fast manufacturing and delivery process providing an efficient supply chain.
SMEs are important drivers of innovation and technology; they play a significant role in supporting large manufacturers to provide a more secure supply chain.
Distributors have a team of highly experienced technical and mechanical engineers that can offer advice and provide a shorter time to market and by acting as a middleman they provide a smooth purchase process by taking care of the ordering, stocking, pricing and delivery.
At GD Rectifiers, we are a global distributor and manufacturer of power electronic devices to industrial markets. We are a stocking distributor, we hold stock on site for the convenience of our customers, and as a manufacturer we also offer: custom designs, design assistance, technical solutions, prototyping, sub assembly work, production, machining and flexible manufacturing facilities.
How will the internet affect the future of distribution?
More and more distributors are looking at ways to improve the customer’s user journey, this includes both online and offline strategies. Online strategies include: sitemaps, ecommerce websites, product offering promotion, social channels, advertising and analysing consumer buying trends. The offline strategies that distributors are adopting include looking at ways to increase retention and acquisition across the market, exploring new promotional tools and widening their product offering. In such a lucrative industry its everyone’s priority to stand out from the crowd, to nurture relationships and remind customers why they should shop with you.