Redefining electronics logistics

Thorsten Eyle, Director of ­LogOn at EBV ­Elektronik ­explains the new logistics ­services from EBV Elektronik and how they help to make the semiconductor supply chains more resilient.

The semiconductor industry is currently struggling to cope with the huge demand for semiconductor products. Although expansion of production capacities is already being tackled, it will be a few years before this has any effect. For this reason, industry experts are also calling for supply chains to be optimised and made more resilient. Thorsten Eyle explains what this might look like, and what a distributor like EBV Elektronik might be able to contribute. He heads up EBV Elektronik’s new business unit LogOn, in which the semiconductor distributor has amalgamated various logistics services for its customers. 

What is LogOn exactly?

Thorsten Eyle: LogOn – short for Logistics Only – is an example of innovation at EBV Elektronik. As a separate “sales region”, we are the specialists at EBV when it comes to logistics and fulfilment customers. We founded LogOn in order to respond to the changes and development in the distribution business: we have been known in the market as simply a demand creation distributor over the last 50 years. But in the last few years, more and more manufacturers have decided to carry out demand creation themselves directly with the customer. Of course, we have to accept this – but it also presents an opportunity that we have seized with LogOn. Ultimately, manufacturers and customers need a partner to provide just logistics and associated services – they can now rely on us for these.

What is needed – beyond a higher production rate – to make the semiconductor supply chains less susceptible to problems?

T. E.: Complete transparency when it comes to electronic data exchange is essential for this. Additionally, the customer has to take a more long-term approach – if the customer places orders over a period longer than twelve months, this provides much more certainty in terms of planning. Long-term agreements covering a period of three years, with a fixed quantity structure or capacity reservation and which are concluded between the customer, manufacturer and LogOn could be a solution.

A seemingly logical consequence would be buffer stock for semiconductor ­products… 

T. E.: We call this type of buffer stock “security stock”. This means that whenever the customer has a line-down situation, they can fall back on the goods and continue ­production.

Is this actually possible without taking any further steps – semiconductors apparently cannot be stored for an unlimited period of time? 

T. E.: Most customers have a date code limit of twelve months… the goods can, of course, be used beyond this, though. We have also implemented the FIFO principle in our warehouse; this means that the goods are ­continuously “rotated”. As of summer 2022, we at EBV Elektronik ­together with our sister company Avnet Logistics in ­Poing will also be providing long-term storage: the concept ­enables storage for up to ten years.

Does EBV Elektronik really have its own warehouse for semiconductor products? 

T. E.: EBV Elektronik receives all goods from its own warehouse in Poing near Munich – LogOn therefore does too.

What other services does LogOn offer?

T. E.: We offer all logistics services the customer is familiar with from EBV Elektronik. For example, this includes buffer stock, forecast management, end-of-line logistics and long-term storage, labelling and programming. Additionally, we have our own price list for additional services. The customer can then choose for themselves what additional logistics services they require.

In connection with our storage offering, we also provide peak management. As part of this, we stockpile a certain percentage of the annual quantity of A-parts required. The quantity is defined together with the customer. As part of peak management, the customer uses our warehouse to compensate for demand spikes. In some cases, they also provide the goods to their service providers in order to prevent production downtime.

What has the reception of the LogOn service offering been like? In other words: how is business going?

T. E.: We were able to double our figures from 2020 to 2021 – thanks to new solutions like SPOC and TAM to DTAM. We believe there is a great opportunity to grow a further 30 per cent in 2022.

What is meant by SPOC and TAM to DTAM?

T. E.: There are customers that only work with contract manufacturers – a so-called “EMS”. There is no transparency here about what quantities the EMS has ordered from which supplier. SPOC – meaning “single point of contact” – is an alternative to this: depending on the relevant project, all assemblers are served via LogOn. This means that we unite the requirements of the manufacturers under the LogOn umbrella with corresponding benefits when it comes to goods distribution according to the specifications and priority of the end customer. 

Thanks to SPOC, LogOn customers only interact with a single point of contact that provides them with complete transparency and continuous updates. They no longer have to communicate with numerous contact persons at various sites or receive different information from different sources. Everything is provided in a streamlined and coherent manner; this makes the decision-making process easier and helps to improve efficiency. In short, they can hand over the management of their EMS partners’ supply chains and therefore significantly reduce the pressure on their procurement departments.


Ultimately, ­manufacturers and ­customers need a partner to provide just logistics and associated services – they can now rely on us for these.”


What does TAM to DTAM mean?

T. E.: Many manufacturers have a direct business relationship with the customer. We can provide support if they can no longer handle this from a logistics point of view: with TAM to DTAM – i.e. total available market to distribution total available market – they can transfer their direct business to us. LogOn has developed a setup for this purpose; it helps both customers and manufacturers to maintain complete transparency. We have implemented the entire TAM to DTAM concept electronically in order to meet digitalisation requirements. Ultimately, we also relieve the pressure on the manufacturer, as they can focus on their core strength – manufacturing components – and we take over the supply chain for them.

Can the LogOn model really contribute to relieving pressure from supply chains?

T. E.: With our systematic way of implementing it, definitely – at least when it comes to assigning the goods. Additionally, the advanced tools that our team uses enable us to predict the future demand for components in a way that is far more accurate. Possible risks of bottlenecks can be identified and tackled before they become a problem. Furthermore, semi-dynamic monitoring of the consumption levels means that required changes to the stock levels can be made at an early stage.

However, when looking at the last two years we also have to be honest: LogOn can do nothing if production is simply too low.

Finally, a question that will probably interest a great many firms – and consumers: how much longer will the shortage of semiconductors persist?

T. E.: In truth, that is the question that concerns us all. I think it will last until 2023. The reason for this is obvious: demand is increasing globally every year in all fields – from the automotive sector to consumer electronics. At the same time, the expanded production capacities will only start to have an impact in 2023.