It’s an exciting time to be in the electronic components business—especially if you’re focused on connector sales, says Jack Voelmle, vice president of the interconnect group at Future Electronics. Advancing technology across a range of industries is adding a new element to the ongoing drive to produce smaller, faster, lighter, and less expensive connectors.
Today, says Voelmle, customer demands are causing connector makers to develop smaller, faster, lighter, less expensive, and smarter connectors than ever before. In turn, the trend is driving demand for more knowledge and higher service levels from electronic components distributors.
“Smart connectors—that’s the buzzword today,” Voelmle says, noting that connector manufacturers are “trying to find ways to integrate intelligence and electronics into just plain passive connectors” as a way to make them more interactive, delivering more feedback to users.
The trend cuts across many industries, but Voelmle points to alternative energy as one example of a growing opportunity for those who offer smart solutions to connector challenges. Connectors that provide feedback about what is working and what isn’t working in a particular system, for example, could help streamline and lower maintenance costs, adding value for end users in everything from energy distribution to manufacturing.
Combine the need for new technology with the sheer demand for electronic components in just about every industry today and you can sense the excitement Voelmle talks about. He points to the automotive industry, where so much more is driven by electronics than it was even 10 years ago, as an example of the heightened focus on components in general and connectors in particular. There is also the drive toward wireless technology, which is placing increasing pressure on manufacturers to develop those smaller, faster, lighter, cheaper, and smarter solutions that are in high demand.
Such changes are placing a new emphasis on research and development among manufacturers and, again, on product and application knowledge among distributors.
“The connector field is very exciting, it’s very busy, and it’s touching almost every industry,” explains Voelmle, who has more than 30 years of experience in the connector business, having worked in both manufacturing and distribution.
He adds that customers today are demanding more from a product that they have traditionally viewed simply as something that could take them from point A to point B.
“Now they want to get there with a lot more feedback and a lot more intelligence,” he says.
Changes in connector technology vary by industry and application, of course. Voelmle points to the energy market as one that is full of challenges and opportunities. He says the Smart Grid in particular is an area in which customers are seeking more from their connector suppliers. For instance, integrating connectors that provide feedback on what is happening in the grid itself could help with maintenance, repair, upgrades, and a host of other issues, he says.
The situation is similar in the solar power market, where incorporating smart connectors into the products can help reveal which panels are dead or not working as they should, leading to more cost-effective maintenance programs—workers learn more about the problem and are warned earlier when something needs to be repaired or replaced, reducing downtime, saving costs, and enhancing the overall efficiency of the process.
The electric vehicle (EV) market represents another opportunity for connector suppliers—and one that may have its greatest potential down the road. As that industry’s technology advances—creating stronger, longer-lasting batteries—and the vehicles become more popular, many industry watchers are predicting a greater need for charging stations and the technology that goes along with them.
“The EV world will continue to bring change to the connectors industry,” Voelmle says. “There are \\[new technologies\\] out there that haven’t even been developed yet.”
Customers will continue to bring change as well, particularly as newer generations of engineers seek even greater technological advances across the board.
“\\[Customers\\] are adding a lot of intelligence to their workforce, and the generations coming out are demanding more things,” Voelmle notes. “In general, customers are demanding more value out of what used to be just a passive connector.”
Knowledge, Service Make A Difference
From a supplier standpoint, and especially among distributors, knowledge and service are becoming increasingly important in the connector market. Manufacturers are investing heavily in “next-generation” technology, Voelmle says, and many distributors are beefing up their knowledge base as well.
“It’s about being more than somebody who does fulfillment. \\[Customers are\\] looking for our sales team to be more intelligent about the products we sell. Customers are working with more productivity and less and less people, so they are depending on us to fill that gap for them,” Voelmle explains. “On the interconnect side—and on all sides, really—we put intelligent people \\[in place\\]; people with a lot of experience and knowledge.”
Like other value-added distributors, Future Electronics is focused on answering questions, offering the best solution to a problem and educating customers on the latest and greatest technologies available to meet their needs.
“We’re making sure, especially with our people on the interconnect side, that they have the background and experience so that they’re able to hit the street running,” Voelmle adds. “We can walk into a customer and say ‘show me what your problems are’ and our team is able to take that kind of information and convert it into an answer for them.”
He reasons that this kind of personal service is far more valuable than anything a customer could find online.
“You could sit there and say, well, doesn’t the Internet provide that? Well, yes, it can, but for what it would take you 40 hours to do, we can do it in 10 minutes,” he argues.
Such services are a natural extension of the distributor value proposition, which is even more valuable in today’s marketplace, many in the industry argue. For example, in a recent industry insights column, Michael Knight of TTI Inc. explains that distributors play an increasingly important role in bridging the gap between manufacturers and end users as a source of steady inventory, service, and support.
“The sales and service resources that a distribution network can provide a manufacturer enable them to engage with more customers in more locations and of a greater range in size than the manufacturer’s direct sales force can accomplish,” he wrote in a TTI Insights blog post last year. “And for the end customer, the multiple, synergistic suppliers that a distributor carries allow the customer to leverage their time, and more efficiently procure goods and services from multiple manufacturers in just one transaction.”
Knight also points to the value of the relationship between distributor and customer, noting how close and well-informed that partnership can be.
As Voelmle explains, when a good distributor walks into a customer location, you see a difference in that customer’s response.
“We add value to their day,” he says.
The connector market is expected to grow at a modest 6% this year, according to market analyst Ron Bishop of Bishop & Associates. In a connector market report earlier this year, he cited several reasons for the return to modest growth after a surge in connector sales in 2010:
- Slowing world GDPs, especially in Europe and the United States
- Euro area problems, especially with Portugal, Italy, Greece, and Spain
- High unemployment in western countries
- Very tough comparisons to 2010 results when connector sales were up year-over-year near +30%
- High deficit spending, high debt, and already low interest rates that don’t leave much room for central banks to support a better economy
- A poor housing market, high consumer credit, and high unemployment that most likely will suppress consumer spending
More recently, Bishop released a 2010-2015 forecast for the connector market, predicting 7.5% compound annual growth worldwide, with most of that growth coming from China (driven by China’s demand for a range of consumer products, especially cars).
Distributors expect steady growth ahead as well, particularly because of ongoing technology advances that are boosting business across the entire electronic components supply chain.
“The future does not look like it’s slowing down at all. I don’t see any letup in any of what is happening around us,” says Voelmle, pointing to the growing role of electronics in our daily lives and the related role of connectors as the “lifeblood and lifeline of everything we touch.”
“That makes for a pretty broad-based opportunity,” he says.