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Value-added services have been a bright spot for many distributors during the downturn. Many expect VA to turn into a real cash cow once the electronics industry recovers.
In the 1990s value-added services were a way for distributors to differentiate themselves. During the current industry downturn VA has helped some distributors survive. In the next upturn. which some analysts say has already begun. VA services will help distributors take their businesses to the next level.
Most distributors offer some value-added services ranging from simple parts labeling and kitting to complex supply chain management services that help OEMs and contract manufacturers manage their supply base and inventory levels. When component sales dropped for distributors during the downturn. so did demand for value added service. but at a lower rate than the sales decline. according to distributors.