NEC Electronics has started to rework its distribution network. The move follows the reorganisation of its European sales operation, which started in April 2001.
Internally the company has moved away from a country-specific focus to one based on pan-European vertical-market specialists. The company's distributors are being given added responsibility and encouraged to concentrate on a design-in based approach.
The first moves affect three distributors that have traditionally provided higher levels of technical support on various NEC products.
Azzurri Technology which has the line in the UK will now represent it in Italy while MSC/Gleichmann which supplies NEC products in Germany is also to handle the line through its offices in the UK, Benelux and Austria.
The relationship with Impact Memec, which has offices in 18 countries, has been formalised as a true pan-European franchise agreement. Memec has been moving to pan-European deals with many of its principals.
NEC has other distributors in Europe, including Arrow Electronics in several countries and Sunrise in the UK, but none of them have so far been affected by the changes.
Haroon Rashid, general manager at NEC Electronics' industrial and distribution business unit, said that at present around 60% of sales go through the distribution sector.
“We want distribution to grow as much as it can. There is no upper limit of how much [distributors] can supply. Distribution has possibly been viewed as a drain on the resources and margin but the reality is far from that.
“There is an opportunity for all suppliers to maximise sales and move forward.”
Rashid says that the changes have partly been made because the company's product portfolio has altered, with a move to increasingly supply many of the parts of a system rather than just individual products.
“This new structure will allow distributors with expertise in particular product areas to expand their geographical reach across Europe. Distribution will no longer be just about component supply. If solutions are what we have to offer, then solutions are what we have to support through the network. We have to look at the business much more seriously than we have before,” said Rashid.
NEC is looking to its distributors to mirror its internal operations and provide field sales engineers, field application engineers and even design centres dedicated to the NEC line.
“We can't take the system solutions to market on our own, we have to rely on the competence of our distributors as well,” said Rashid.
Azzurri Technology gained the NEC franchise in the UK in 1997 and Mike Carlucci, the company's president, said that his company will use its expertise on supplying NEC in the UK, as well as expansion of its French operation, to expand the customer base in France.
He expects the company's sales to grow to €74m this year, up from €64m last year. “We want to broaden the NEC customer base in France mainly in tier two customers but also some tier one.”
Thomas Klein, managing director of MSC/Gleichmann, said his company has expanded the technical support that it can provide on NEC products by adding four ASIC design engineers in Munich to supplement the eight engineers at its microcontroller development centre in Stutensee.
Karl Elshuber, CEO of Impact Memec Europe explained that the design support provided by the Impact Technology Centres (ITC) will work with the company-wide Memec Design Services organisation to support both NEC asics and microcontrollers. The ITC in Switzerland has more than ten asic designers.
Rashid said: “This reorganisation is just the first phase in NEC's repositioning and we will be developing it to ensure our initiatives meet market needs.”