Canterbury electronics companies are welcoming a new net-based trading initiative, designed to help overcome supply constraints particularly for smaller businesses.
However, unlike the multimillion-dollar Fonterra and Woolnet portals, the Christchurch-developed system is much more modest — it doesn’t even accept online payments.
Rather than reducing costs by economies of scale, the system claims to break new ground by instead giving users access to smaller quantities of raw materials.
Indeed, rather than branding it an e-marketplace, co-creator Keith Ross prefers the term “electronics component register”.
“It’s not e-commerce. We want to stay away from that. It’s a sharing platform to allow companies to network,” says Ross.
His electronic communications company, E-Lands, designed the system for Canterbury Development Corporation offshoot Electronics South, a local cluster of electronics companies.
Christchurch-based E-Lands modelled it on the US-based component-buying house Digikey.com.
“I have taken all that stuff and taken away the e-commerce. Everything else is the same. You cannot pay online. You have to use the phone. We encourage users to know the other members of the electronics community,” Ross says.
The e-market, launched a week ago, follows a CDC survey of electronics businesses in the region, which found they had problems with minimum purchase orders. A company might only want a few widgets but often has to buy many dozens or hundreds. Orders from outside the area might also take much time to be fulfilled.
The CDC believes around 40 local electronics companies will use the e-market regularly, though use is open to almost anyone from outside the region. Within its first few days of opening, some 10 businesses had listed stock to sell on its database.
Ross says sellers may be organisations that have over-ordered and have a few spare items to sell. But the site is closed to resellers and distributors trying to use it as a shop window.
First users include Christchurch-based electronics contract assembly manufacturer Assembly Specialists. Owner Ron Sutherland confirms minimum purchase requirements can be a problem for a nine-employee business like his.
“I do not see it as an aid for selling, rather an aid to buying. The whole idea is for small manufacturers to assist each other. It has the potential to be extremely useful to smaller manufacturers,” Sutherland says.
Mark Bowman, executive vice-president of Navman OEM, says larger businesses like his will also benefit from using the site as a place to dispose of unwanted stock.
Tait Electronics spokesman Andrew Trevelyan says the e-market should help businesses shift surplus stock and encourage local firms to work together.
Chad Gillespie, purchasing manager at Powerware (formerly Invensys), agrees, but says its success will depend on the commonality between the components bought and sold on the system.
“It will help us rid ourselves of surplus stock. And when we have a shortage, we will also use it,” Gillespie says.
The register was written in Cold Fusion by Christchurch-based Innovative Media, which hosts the site.