Recently, it was announced that three European electronics test and measurement (T&M) equipment companies were joining forces. Now that Electro Rent Europe, Microlease and Livingston have consolidated, what impact will it have on Benelux customers?
Just a couple of years ago, you may have heard, NPO 2’s Top 2000 radio show received a typical call from a group of excited listeners. As it turned out, this call was anything but ordinary, it was a group of laboratory engineers from NXP calling in to say they were tuning in on the most expensive radio in the country. The callers explained they were using a large network analyzer and amplifier to demodulate the radio signal and amplify it across speakers in the lab – estimating that, in total, their radio was using around half a million euros worth of surplus equipment. Apparently, the test project they were conducting had ended, but the no-longer-used equipment was just in storage.
“It was told as a funny story, but this shows exactly what type of issues with inventory management many companies are facing,” describes Reinier Treur, Electro Rent’s VP of EMEA Product Management & Sourcing. “Companies are purchasing high-end pieces of equipment for projects lasting only half a year. But as the technology develops, it moves on or gets outsourced and the expensive equipment ends up just sitting in a warehouse.”
As part of Electro Rent’s rebranding, the T&M equipment provider is keen on expanding its scope from a rental company to a total solutions provider. Electronics becomes ever more complex and specialized testing equipment is exceedingly more important – and expensive. But for companies, managing inventory is a chore. This is where Electro Rent believes it can make a difference. “We operate heavily in the telecom sector, but more recently, we’ve expanded to the semiconductor, aerospace and defense industries that use high-end equipment in the RF micro space,” explains Nigel Lawton, VP of Sales Northern Territories. “A lot of the companies in this area have vast amounts of equipment, which is often not optimally utilized. We find that sometimes customers struggle to know what they’ve got, who’s using it or where it’s stored, which makes lifecycle management virtually impossible.”
To remedy this, Electro Rent has created a new asset management tool called Leo. Leo gives customers the ability to fully track available assets, ongoing projects and equipment locations, all within the new online portal. By optimizing inventory and providing customers with an alternative to the high cost of purchasing equipment that’s only used for a short time, Electro Rent is looking to drive down costs.
“For customers like NXP, where we offer 5G R&D test solutions that they use to test their chips, they need equipment that’s very expensive – up to one million euros in acquisition costs. So, it’s easy to see the value of our services in providing rental options instead of only purchasing,” illustrates Gert Vluymans, Sales Manager of the Benelux region. “Also, for our Benelux customers like Ampleon, Nexperia and the technical universities, where there’s a lot of R&D happening. Technologies are changing so fast these days, so they don’t always want to buy a unit and be stuck with it for years. They’d rather have a flexible plan that allows them to change the technology as needed, which fits in perfectly with our model.”
In addition to driving down costs, Electro Rent’s Benelux customers will also notice unprecedented access to inventory. With the unification, and in conjunction with the Electro Rent Corporation based in the US, the company has opened to the door to a new global infrastructure for its clientele. In fact, customers can now gain access to a global inventory valued at over 1 billion euros, with more than 300 of the top brands in test equipment, all from a single source.
“By far, one of the biggest additions to our offerings is in our extended range of instruments. For example, Keysight’s new flagship UXR series oscilloscopes, which cost between 500,000 and a million dollars. Before the merger, there was no way we could ever think about buying one to offer for rental,” says Treur. “Now, we have six or seven deals pending in Europe, and we’ve already purchased the first three or four. It’s this ability to invest in this high-end equipment that’s perhaps the biggest benefit for our customers here.”
Electro Rent’s current rebranding campaign is nearly two years in the making, since the actual merger took place. The announcement, however, has been somewhat overshadowed by the coronavirus pandemic. Bits&Chips asked how exactly the current health crisis is affecting the business.
According to Electro Rent, there’s some risk in terms of equipment delivery from suppliers. “Very luckily, at the beginning of the year, we placed some very large orders with our vendors, and most of this equipment was delivered just before the escalation of international coronavirus restrictions and measures, which means our stock position is quite strong at the moment,” explains Treur. “What we’re noticing is that business in Europe isn’t slowing as expected. In fact, we’re even getting requests from Italy. It appears, at least for now, the economy in Europe is still working, though if this continues for another 3, 4 or 5 months, then we should definitely expect a decline.”
Another reason Electro Rent is remaining optimistic is because of its stance in the telecom sector. “A number of our customers are sending critical supply letters, particularly around emergency services and telecommunication networks, both the existing 4G networks and in the development of 5G,” highlights Lawton. “Basically, they’re saying that these infrastructures need to continue and have been confirming the role we play. As such, both we and our customers are actively in communication with the Belgian and UK governments confirming that our supplies are essential for those sectors.”