Trading Specialists Blog

Obsolescence Issues & How To Manage Your End-of-Life Electronic Component Inventory

2012-01-31T11:21:00.000Z

In the late 2000's the world faced a Global Financial Crisis that caused a drop in demand for consumer electronic products as well as financial problems for manufacturers. The economic troubles led many original component manufacturers (OCM's) to issue end-of-life notices for many of the parts that they built. In the three months following the collapse of the Lehman Brothers bank, electronics manufacturers EOL notices increased by nearly 300%. 2009 was even worse with the number of EOL notices increasing by 1000%.

When the Restriction of Hazardous Substances (RoHS) legislation came into action in 2006 many OEM's were forced to change the materials used in their products. Older components that did not meet the new guidelines were no longer useful and so therefore became obsolete. Rory King, Director of global product marketing at IHS, stated, "Many OEM's are sitting there with entire bills of material with literally thousands of parts which they had no idea were subject to unforeseen EOL or other supply chain disruptions.” With RoHS 2.0 due to come into affect in 2014, this process is likely to repeat itself.

At present the life cycle of electronic components is shortening and component manufacturers are issuing last time buys (LTBs) more regularly. OEM's will therefore have to forecast and estimate what they will need before the part becomes obsolete.

Unfortunately there is no end in sight for obsolescence in the electronic components industry and even the most efficient OEM's will sometimes be left with excess stock for which they have no further use, however this does not necessarily mean that the stock is worthless although it may be costly to keep. By getting rid of your excess inventory you can save warehousing costs while at the same time can offer your business an instant cash injection.

It is a big world out there and there can quite often be someone looking for the parts you have in your inventory. If you have obsolete parts that are in demand you could recover even more from your inventory with consignment.

Trading Specialists are already the partner of choice for some of the worlds largest component and equipment manufacturers. We work with you to create a tailor made solution for your obsolete and excess stock, all backed up by our global distribution network.

To learn more about consignment or how to sell your electronic component inventory please follow the links.

A sneak-peak at our bidding process...

2011-11-18T15:45:00.001Z

You have done the hard part and put a list of all of the excess, obsolete, slow-moving & EOL stock together. But how do you know that the bids you are receiving are competitive and reflect the current market values?
Trading Specialists works closely with suppliers and puts a lot of time into ensuring that our bids are (and always will be) competitive.

1) The first step is to find out if line bids or an offer for the whole lot is preferred.
- A lot bid allows us to spread our risk over multiple lines and therefore offer a higher amount. It also leaves your warehouse clear of the material which has no value.
- Line bids are perfect for slow-moving or newer inventory. A line bid can help you identify which lines you can afford to sell and in what quantities.

2) We assess the parts on our internal database which is shared with our offices worldwide. This allows us to see our customer demand,quotes,sales and purchase history.

3) The next step, is to see the availability, lead times and prices from distributors and manufacturers. We have over 1000 supplier stock lists available to us and teams dedicated to ensuring the information is accurate.

4) Based on many different strands of information we calculate risk and offer accordingly.

5) The more information and feedback available, the more accurate and individual our bids become.

As one of the largest buyers of excess inventory in Europe, and with an ever-growing supplier base, we must be doing something right. Send your list or any questions to excess@trading-specialists.com or tell us what you think in the comment section below.

If you are looking for the maximum return from your excess and don't mind sharing the risk over longer periods of time, check out our flexible consignment option. http://bit.ly/vaTbmq

Inventory levels continue to rise - Is this 2008 all over again?

2011-10-10T14:05:00.002+01:00

According to recent reports by industry experts at Gartner and IHS iSuppli semiconductor inventory levels have reached “worrisome levels” and are manufacturers are “wading into troubled territory”.

“Total semiconductor inventory at the end of the second quarter, as measured by Days of Inventory (DOI) factor, stood at an unusually elevated 83.4 days - a level exceeding even the last record high of 83.1 days seen in the first quarter of 2008” says Steifel.

This is 11% above the season average and calls for correction before it is too late.

What does this mean today?
Gartner analysts state “Excess inventory levels helped buffer the impact of the Japanese earthquake; however now action should be taken to rationalize stock levels in the face of macroeconomic weakness”. With lead times becoming less of an issue and uncertain demand for Q4 2011 and 2012, now is the perfect time to sell your excess inventory before the industry weakens.

In a surplus market, a manufacturer with surplus inventory could make significant losses. When opting for cash purchase of excess, EOL, slow-moving or ex-works inventory it is unlikely that the full costs of the assets will be recovered. But, in a saturated market the stock will be easier to procure and the demand lower.

Please leave your comments and questions below or alternatively email excess@trading-specialists.com.

http://www.isuppli.com/Abstract/P13816_20110922161125.pdf
http://www.gartner.com/it/page.jsp?id=1796915

7 Step Consignment Checklist

2011-09-02T09:48:00.001+01:00

Achieving the best return for your excess, obsolete and EOL inventory is always a priority, especially if the material is still showing a high value in your accounts.

However, finding the right company, with the right systems and processes in place, to protect your stock and obtain the best return possible, can be a lot tougher than it may seem.

Furthermore, getting this wrong can not only have financial implications but it can affect your standing within the industry.

That's why we've created a simple 7 step consignment checklist to help you protect your stock, and gain a greater financial benefit.

7 Step Consignment Checklist

1. Title
Make sure the title remains with you until goods are sold. So in the event you need material for production at a later date, it is just a phone call away.

2. Confidentiality
Ensure your independent electronic component inventory manager has a confidentiality agreement in place to protect your stock and your business.

3. Insurance
To give you peace of mind the material should always be covered by the independent electronic component inventory manager, whilst stored in their warehouse.

4. Freight
All freight should be paid for by the independent electronic component inventory manager and you should never see any hidden charges when material is collected from your warehouse.

5. Payment
Make sure you receive monthly payments for material sold, so you are getting a constant cash flow into your business.

6. Visibility
Check to see if they offer a web based access to sales and stock data relative to your material. This gives you all the information you would need 24/7.

7. Marketing
Find out how your independent electronic component inventory manager markets your stock to potential customers.

Please leave your comments and questions below or alternatively email excess@trading-specialists.com.

New Industry News Website: Electronics Feed

2011-08-15T10:45:00.001+01:00

In a recent meeting with Evertiq we learnt about a website that's just been launched...www.electronicsfeed.com.

Electronics Feed is an online information hub that can help you stay updated on news within the electronic design engineering and component industry.

Which Electronic Component Disposal Option Do You Prefer?

2011-07-19T17:14:00.022+01:00

The majority of manufacturers in electronics will face the decision of what to do with excess, obsolete, slow-moving and EOL electronic component stock... Few sell the stock themselves, others prefer consignment and most favour a cash injection.

Here are just a few of the benefits and reasons behind the two most popular options:

Consignment

The stock has a high residual value.
Higher return for the stock over time.
The stock still belongs to the factory and still frees up space.

Immediate Payment

No ongoing liability.
Instant cash for stock which has already be written off.

Which option do you prefer / would choose?

Please leave your comments and questions below or alternatively email excess@trading-specialists.com.

6 Top Tips On How To Maximise The Return On Your Obsolete, Excess & EOL Electronic Component Inventory.

2011-06-29T11:10:00.003+01:00

Supply and demand are uneasy partners in the electronic component supply chain at the best of times., but with the current global economic climate the slightest change can usually result in a significant increase in stock levels to your business, which may ultimately impact on your profit.

With this in mind we have recently developed a guide on how to maximise the return on your obsolete, excess & EOL electronic component inventory.

To download your copy please click here NOW!

The Disadvantages Of Holding Excess Inventory Within Your Warehouse...

2011-05-04T10:06:00.000+01:00

I have recently found an interesting article stating the disadvantages of holding large amounts of excess inventory.

Here are some interesting points from the article which are worth considering...

Excessive inventory tends to turn over less and remain in inventory longer than lower inventory levels. The longer inventoy remains in the warehouse, the more the company runs the risk of the inventory becoming obsolete.

Holding inventory requires the company to pay carrying costs such as storage, insurance and possibly even interest charges.

Any inventory maintained within warehouse shelves reduces the company's ability to purchase additional inventory or store additional finished products.

Please click here to read the article.

If you have any comments or questions please leave them below or alternatively email excess@trading-specialists.com.

Electronic Component Semiconductor Inventories At Alarming Levels

2011-03-10T10:46:00.022Z

Supply and Demand are uneasy partners in the electronic component supply chain at the best of times, but with the current global economic climate the slightest hiatus can result in a significant increase in stock levels, which may ultimately impact on your profit.

Most companies have a disaster plan in the event of an interruption to business caused by acts such as terrorism or severe weather conditions, etc. So it makes sense to have a contingency plan to remove unwanted electronic component inventories when the occasion demands.

I have recently read the following interesting article relating to semiconductor inventories...

Semiconductor Inventories Swell to Alarming Level..."global inventories held by semiconductor suppliers surged to their highest level in two-and-a-half years during the fourth quarter of 2010. If growth is lower, the high inventories could cause oversupply in the market." Source: www.isuppli.com

Performance, trust, reliability and confidentiality should be the corner stones of any excess inventory management partner, here are 4 reasons to sell your obsolete, EOL or excess electronic component inventory...

Provide a positive cash revenues to your business.
Free up warehouse capacity and reduce stockholding costs.
Eliminate the time spent by your warehouse staff managing this unwanted inventory.
No future liability, which means you're at no risk from your redundant stock.

Trading Specialists provide electronic component inventory management solutions to OEM, ODM and CEM clients around the globe. We are a leading provider with over 20 years experience and have the expertise, appropriate resources and knowledge to handle the disposition of your unwanted electronic component inventory.

Inventory Management is our core business and our full range of services are trusted by some of the worlds leading electronic companies and have been for many successful years.

To discuss your electronic component disposal requirements please call me on ++44 (0) 1904 436420 or alternatively email me at bobg@trading-specialists.com.

Move your Excess, Obsolete & EOL electronic component inventory before the residual value falls!

2011-02-15T11:54:00.000Z

No, I'm serious... I am receiving reports from my contacts in the APAC region that the supply chain is softening. Take a look at the following articles...

Capacitor Lead Times Shift...click here to read more!
"Soft Landing" For The Semiconductor Industry in 2011... click here to read more!

Many manufacturing companies that I have spoken with are now starting to review their inventory levels to ensure they do not get caught with dead electronic component stock that could cause them unnecessary profit loss.

Even in Europe I am seeing reports that suggest Q1, 2011 will see a decline in the demand for electronic components. Unfortunately this will ultimately reflect on the prices across a wide range of electronic components.

So what's the answer?

Move your excess electronic component inventory NOW!

I know it doesn't normally rate highly on your list of priorities, or maybe even get onto the list at all, but if it hasn't moved in the last 12 months it isn't going to go anywhere.

Selling your excess, obsolete and EOL electronic components can help inject immediate cash revenues into your business. I am always looking to buy electronic component material and have a variety of options available to you including consignment and immediate payment.

Still not sure?

Why not give me a call to discuss your disposal options? My direct dial is ++44 (0) 1904 436 420, alternatively if you already have a list simply email it to bobg@trading-specialists.com.

Seasons Greetings Electronic Component Industry From All At Cyclops

2010-12-24T12:15:00.002Z

Thank you for your continued support throughout the year. We wish you well over the holiday season and New Year celebrations.

The Cyclops Group will be closed for the holiday season from Friday 24th December 2010, reopening in the New Year on Tuesday 4th January 2011.

We will be ready and waiting to receive your requirements as normal and look forward to a busy and prosperous New Year.

Warmest Regards

From all at Cyclops

Email:   marketing@cyclops-electronics.com
Web:     www.cyclops-electronics.com
Phone: ++44 (0) 1904 415 415
Fax:      ++44 (0) 1904 424 424

The Cyclops Group Successfully Exhibit At Electronica 2010 In Munich, Germany

2010-11-15T15:25:00.001Z

The Cyclops Group, a global electronic component distributor successfully exhibited it's services at Electronica 2010 in Munich, Germany, from 9th - 12th November.

The stand exhibited information from the Cyclops Groups services including...

For more information and highlights from the show please click here NOW!

Electronica 2010

2010-10-26T13:23:00.000+01:00

Good news, Electronica 2010 opens its doors again next month (9th - 12th) and our parent company Cyclops Electronics will be there again along with the Trading Specialists division.

Daniel Yodaiken, Cyclops Electronics Managing Director is looking forward to meeting again with our friends and customers who will be guaranteed a warm welcome.

As before we will be happy to receive any excess stock lists on the stand and we have the communications on hand to provide you with a speedy response. Remember, once we have agreed a price we can provide immediate payment and we will even pay the freight costs.

What could be better, meeting up with friends and colleagues again and making money in the process.

Have a great show.

Are you old enough to remember “The A-Team”?

2010-09-28T15:20:00.000+01:00

There was one character Hannibal Smith and his catchphrase was “I love it when a plan comes together” well fortunately that's what has happened for Trading Specialists. Our new warehouse has come on stream just as the influx of freshly bought E&O material arrived.

Our customers have responded brilliantly to our request for them to check their inventory for excess and obsolete stock and we have succesfully negotiated a fair price to give their balance sheet a good boost. Let's face it, if stock hasn't moved in 12 months then it's very unlikely to move at all.

Now all I have to do is find more excess stock to buy and keep the stock levels up.

Have you got any material you want to sell?

Somethings Never Change!

2010-08-24T16:05:00.000+01:00

I had to smile the other day, whilst flicking through a magazine I came across an advert from one of those high end Hi-Fi companies advertising their latest valve audio amplifier. Yes, that's right it had been built using valves.

As I said it made me smile but it also made me feel my age, after all my first job in the electronics industry was selling electronic components that included valves. I think it just shows that sooner or later everything comes full circle, as my sales career progressed there came a time when you couldn't give them away (valves) let alone sell them and that seems to hold sway for components in general. 40+ years down the road and still in the electronics industry but nowadays I actually welcome obsolete electronic components and excess and EOL, that's my job now, buying and or managing this unwanted material created by the manufacturers. I work with a good team at Trading Specialists and I get a great kick out of sending companies big cheques for their unwanted component material.

Until next time,

Bob

Trading Specialists 5 Step Excess Electronic Component Disposal Plan

2010-07-02T11:28:00.001+01:00

For a number of reasons excess, obsolete and EOL material is a fact of life for OEM and CEM companies, whether it is design changes or just cancelled orders unwanted stock can build up.

Well now with the Trading Specialists 5 Step Excess Electronic Component Disposal Plan this material doesn't have to affect the health of your company. Here is how it works:

1. Call and discuss your requirements, this can include help in identifying the relevant material or picking the material ready for shipping

2. Agree the best route to market for your material that suits you.

3. Arrange the transfer of the material to our UK warehouse.

4. Commence marketing and selling your material.

5. Bank your cheque.

It sounds simple and it is, Trading Specialists have experience and resources to handle any magnitude of material as well as the financial strength of the Cyclops Group to back it all up.

Our core business is Inventory Management and Trading Specialists already handle EOL material for multi-national OEM's as well as tier 1 & 2 CEM's, they have recognised the benefits of concentrating on their core business and allowing the specialists - Trading Specialists do what they do best.

Do you have EOL material?

Why not give me a call ++44 (0) 1904 436444 or email excess@trading-specialists.com and discuss your requirements, I can promise Trading Specialists will "go that extra mile" in providing the service you are looking for.

Welcome to the Trading Specialists Blog!

2010-06-04T14:24:00.000+01:00

It is our pleasure to welcome you to our new Trading Specialists blog!

This blog has been devised to bring you the latest news and developments on Trading Specialists and issues affecting excess electronic components.

Watch out for our first post next week, we welcome any suggestions, questions or feedback you may have, please email excess@trading-specialists.com.

Looking forward to hearing from you soon!