Sustainable Supply Chain

Semiconductor Supply Chain Blues? A Chat With Fusion Worldwide President Tobey Gonnerman

September 30, 2022 Tom Raftery / Tobey Gonnerman Season 1 Episode 258
Sustainable Supply Chain
Semiconductor Supply Chain Blues? A Chat With Fusion Worldwide President Tobey Gonnerman
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Show Notes Transcript

Semiconductors are everywhere. As more and more devices are made smart, these chips are required now for everything from your car keys, to your remote controls, to you lights, doorbell, fridge, toothbrush, etc. And that's before we get into the number of semiconductors needed for today's phones, laptops, tablets, and on.

The pandemic brought major disruption to the semiconductor supply chain with the ripples still being felt. One company, Fusion Worldwide helps all kinds of companies source semiconductors so I invited their President, Tobey Gonnerman to come on the podcast to tell me all about it.

We had a fascinating conversation covering how the supply chain for semiconductors typically works, the complexities with the many different types of semiconductors, and how to ensure quality of semiconductors.

I learned loads, I hope you do too...

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Tobey Gonnerman:

I don't think that the production of semiconductors is going to keep pace with the rapid appetite that chips are being consumed at. And frankly, I don't think the manufacturers are either. I mean, if I'm a manufacturer of chips and I'm gonna build a fab, and it costs me billions to build a fabrication facility, I wanna make darn sure that that fab is gonna be pumping out chips. And my average selling price is gonna stay high for the life of that fab

Tom Raftery:

Good morning, good afternoon, or good evening, wherever you are in the world. This is the digital supply chain podcast the number one podcast focusing on the digitization of supply chain and I'm your host Tom Raftery Hi everyone. Welcome to the digital supply chain podcast. My name is Tom Raftery and with me on the show today, I have my special guest Toby, Toby. Welcome to the podcast. Would you like to introduce yourself?

Tobey Gonnerman:

Hi, Tom. Yeah. Thanks for having me pleasure to be here. Yeah, my name is Toby Gonnerman. I'm the President of Fusion Worldwide. We are one of the top 10 electronic component distributors in the world. And we specialize in the procurement. And supply of electronic components to large manufacturers, contract manufacturers, across many business verticals to help them with their sourcing needs to either fill their shortage requirements or to help them with opportunities. And so it's a pleasure to join you today to tell you a little bit about about who we are and what we do.

Tom Raftery:

Okay. And it's, it's an interesting marketplace that, until very recently, nobody thought about or even heard about, but of course, with all the disruptions in supply chains and the difficulty we're hearing of manufacturers getting their hands on semiconductors or chips as they're known colloquially. You know, when I think I'm Irish, when I think chips, I think fish and chips, but that's not what we're talking about. We're talking about semiconductors, I think. So tell me a little bit about that marketplace, because like I said, it's something that never even occurred to me existed before. So tell me about it.

Tobey Gonnerman:

It's funny that you, that you say that because, you know, just from a personal level, when people, you know, let's say 10 years ago, or five years ago would ask me, Hey, what do you do? tell me about the company you worked for, you know, within 10 seconds, 15 seconds of trying to describe that to people, I would get kind of a glossed overlook. And people would say, you know, they would feel lost and say, I don't understand what you're talking about. And people would lose interest very quickly and finding out about what I did, because they would say, oh, chips, semiconductors. I don't even know what that is. Let's move on to someone with a more interesting life. Um, But you're right. I mean, in the last, you know, year or two. Yeah. And especially, you know, especially post COVID when there's been so many supply chain disruptions in so many sort of consumer impact of, of this ongoing chip shortage. You know, and people have had to wait a long time for their refrigerator or their automobile or their adjustable chair or their, you know, recreational vehicle or whatever. And you know, when they ask, why does it take so long to get these things that are usually easy for me to get? And then they hear that, oh, We don't have any chips to complete our build. People started paying attention and started getting interested. And there's been obviously a lot of press, a lot of articles, you know, more and more so. About semiconductors and the role they play in our, you know, increasingly, digitalized world. You know, and obviously it's been a hot topic recently with the chips act, being passed in the US to try to boost up US chip production, so that we're not so that the us is not, you know, as reliant on, on you know, the east you know, to get their, to get their chips. Yeah, it's become, you know, more I guess, of the, the common vernacular, so now maybe I can hold people's attention for upwards of 30 seconds when telling them about, what I do.

Tom Raftery:

Sure, sure. And I mean, the reason for the. Sudden shortage in chips is, is manyfold. I got, I think at least part of it has to be the increasing demand for chips. I mean, if I look around me on my desk here, I have a sound board which is full of chips. I have a microphone just full of chips, a computer, which is obviously full of chips. I have, you know, a remote control for the overhead fan. The overhead fan has chips in it as does the remote control to access it. And it has L E D lights as well. and my watch has got chips in it, cuz it's, it's a, it's a smart watch as everything is becoming smarter, more and more devices, which traditionally were dumb. Wouldn't have had chips in them now are now are asking or now need to have chips put in them. So that means there's a huge upswing in the demand for chips. And of course at the same time we had COVID, which shut down a lot of the manufacturing facilities for chips, the fabs, and there's been this kind of pendulum effect or the bull whip effect as some people have called it, which has meant everything has kind of gone outta kilter, right?.

Tobey Gonnerman:

Exactly. I mean, I think the, and you're spot on about, you know, a product is getting smarter all the time and there's more of it. And I think that's a really sort of simplified way to look at it. As the intelligence of our devices increase the amount of chips required to increase that intelligence also becomes greater. You know, and I, I, I read something to, you know, recently about the automobile and the automotive business has gone through a, a massive transition. You know, as the electronification of, of you know, automobiles has really, you know, sort of taken off recently and, you know, a couple of fun facts, and obviously that's a hot topic right now with the automobile manufacturers kind of suffering with this, shortage a bit you know, a couple of fun facts that I read and have heard about that is that pretty soon about 40% of the cost to produce an automobile will be spent on the electronic components that go into that vehicle. That was an astounding number to me, but it makes sense because there's more and more chips that go into it. And then. another uh, fun fact about autos was that the, the amount of components that go into auto automotive, the, the components per vehicle will double between now and the year 2030. And again, that's just to keep pace with, you know, your example of our cars, getting smarter in order for them to get smarter and smarter and smarter, they need more and more chips to help them process information, park for us, heat themselves up, start without us sitting in it or drive us from point a to point B. And so, yeah, those are, you know, there's just real life examples all over the place of how we're living in a more digital world. You hear a lot about the internet of things. You know, and so forth. And so, yeah, it's very pervasive.

Tom Raftery:

I have an example of that or a couple of examples of that just in my own life. My second last car was a Prius It was a 2008 Prius, completely dumb. Didn't even have Bluetooth. If I wanted to play music from my phone, I had to use an auxiliary cable, 3.5 millimeter Jack. Then in 2018, I got a Nissan Leaf, 40 kilowatt hour, smarter car. I had an app on my phone for it. I could check the battery level from the phone. That was great. Now I've got an ID four Volkswagen ID four. Phenomenal car, not alone. Do I have an app on the phone for it? I can start the air con remotely so that long before I get into the car, the air con is on and it's nice and cool when I get there. And I can obviously start the charging from the app on the phone. But also when I sit into the car, I've got this incredible screen beside me with all the information I need and I've got a heads up display in front of me projecting onto the, onto the windscreen. So. The changes in the automotive sector in a few short years are unbelievable. And to your point, the amount of chips that have, have gone into cars in the time to make the, the ID four, and, you know, the ID four is nearly the smartest car out there, but to make it as smart as it is today versus the Prius that I had only a few years ago, you know, it's incredible.

Tobey Gonnerman:

Yeah. I mean, it's, what I think they say now that the semiconductor market is a 600 billion dollar a year space. And is on track to exceed a trillion dollars a year by 2026 and has been growing, you know, whatever a 17% rate per year, which is pretty robust growth. You know, your, your initial question about, Hey, why is there a shortage? Why can't people get chips? What are the, the many, many factors that are driving this current uh, shortage. And why is my refrigerator taking so long to get here? Yeah, that's a manyfold question, with lots and lots of different factors that play into that. You know, historically, we've been, we've been doing this, you know, over 20 years, well, before internet you know, and things like that. And, and shortages have always been apparent or I should say supply and demand, scales being out of balance that I think that's a constant, they're always out of balance. They never match up. Exactly. So whether there's a supply glut or a supply gap, they're always shifting, but typically in the old days, You know, 20 something years ago, it was cyclical. You could almost follow it every five to seven years, there would be a shortage. And then on the reverse side of that, there would be an excess market and, and, you know, sort of the pendulum swung at a steadier slower clip, but as the, technology has continued to infiltrate and that infiltration has not only accelerated, but continues to grow exponentially coupled with, the new markets that are continuing to develop that consume these chips or, you know, have a thirst for this product. And then combine that with the shortened lifespan of chips once they're produced. I mean, the whole idea of planned obsolescence and having a roadmap for the production of a chip, be an extended one. It, those continue to shorten because technology improvements continue to happen more rapidly, you storing more data on a smaller device or processing information faster or whatever those technology enhancements sort of encourage the manufacturers to come out with whatever the latest and greatest, newest chips are faster and faster and faster. And they want to get rid of the old ones so that there's a, you know, some hunger and need for the new ones. And so that. that continues to accelerate. So there's, there's factors on the supply side, the manufacturing side, trying to keep up with the ever changing and growing and a landscape of demand. But then there's also changes on the demand side about, okay, which chips do I want to use? Which technology do I want to focus on? Which attributes characteristics of this end product, this automobile, this jet ski, this radio, your ceiling fan, whatever which attributes do I want to incorporate in my product and how smart do I want my stuff to be? Is different across lots and lots of different business verticals, different from company to company. And, you know, you, you mix all of that together in this giant melting pot of supply and demand where no two snowflakes are the same and no two companies, wanna build the same product. And you've got an impossible mixture. You you've got an impossible situation where supply can never meet demand because there's too many forces stepping on the scale on either side of the scale. So it's in a constant state of flux and frankly, that's good news for companies like Fusion Worldwide. You know, that, that I represent because we are, you know, we are, we're an independent distributor. We're not, we don't represent a manufacturer. We don't manufacture our own chips. We don't have a recipe for some special technology or any patents or anything. We are matchmakers. We are sourcing specialists. We help people find product that they can't find through their normal channels or elsewhere. We also help them find opportunities on their current product to give them options, whether it's a cost option or a supply option or a delivery option for product that they're already going to buy. And the, the necessity of people to incorporate secondary sources or open market distribution or independent distributors like us is, is growing exponentially as well. And so that's, what's led to some robust growth on our end and some very bullish projections for us, you know, in the near term and long term, as this market continues to become more complex.

Tom Raftery:

Sure. And it's it's complex as well I gotta think because it takes, I don't know, I've heard figures like four to five years to bring a new fab online. And so it's gonna take a while for the production to ramp up as more fabs are being planned and built. And of course then there's what chips are they actually manufacturing when they come online? Because as you alluded to, or as you said. There are all kinds of different chips. There are ones for the let's. I have my, my phone in front of me here, and this phone would have a, a useful lifetime of three to five years, maybe at a stretch. Whereas on this phone, I have an app for my car, which is full of chips as well. And you'd expect the car to have a useful lifetime of 10 to 15 years. And so, if I think of classic cars, you know, ones that are maybe 30 years old to 50 years old, you wanna get a part for those. You have to go to a specialized provider to find a part for a car that's 30 to 50 years old. Are you guys gonna be in a similar situation in 30 to 50 years finding chips for phones or cars that are 30 to 50 years old? Is that the kind of thing? I mean, I know that's an extreme case, but.

Tobey Gonnerman:

I mean, that is, that is a long timeframe for us. We have customers that oftentimes have trouble finding chips that are three years old or four years old. Because it has been recently, you know, they've stopped production on it. They've moved on to a different flavor. The producers of these chips have moved on a different flavor, but the there's a residual demand that a particular customer has because you know, like in your example, it might be a product that doesn't change that frequently, an elevator medical instrument, instrumentation equipment. A clock radio, your ceiling fan, for example, how many more advances can there be it either spins or doesn't spin? I don't, you know, and now you can make it spin by itself. There's not really too much more technology, you know, evolution that's gonna happen with that. So yeah, so they want to use some of the same chips and they have a hard time finding it. So, end of life, obsolescence product support yeah. Is a, is a, you know, is a part of our business and, and, and customers do look to us for help with that.

Tom Raftery:

So Toby, we've got all these different kinds of chips with different life expectancies. Is there also a potential quality difference between them?

Tobey Gonnerman:

I suppose, I mean, chips are sensitive. And so they are susceptible to, I guess, damage from handling. And they are, you know, they do need to be stored correctly. I wouldn't call them perishable like, fruits, where they expire, but they do need to be stored correctly. And they do need to be handled correctly, packaged correctly and they can be pretty fragile. So, in, in terms of what, Fusion does and in what we do, quality is a major, major component of, you know, who we are and what we do. And, and it's really woven into the fabric so much that it's, it's how we define ourselves. Obviously a big part of that is because our customers mandate and insist and require a high level of quality. You know, they, they obviously won't accept anything, but the highest quality chips. So we have to be able to guarantee that but also, we are not the direct manufacturer. We didn't produce these chips. And so it's necessary for us to have inspection. And quality control measures in place to be able to live up to our guarantee to our customers, that what we're shipping them will work is functional and is exactly what they ordered. So hopefully that answers your

Tom Raftery:

Yeah, no, I'm just, I'm just wondering how you guarantee that if you haven't manufactured them yourself, how, how can you stand over what it is that you're shipping to your customers?

Tobey Gonnerman:

Yeah. I mean, it's interesting. You ask, ask, and there is a, more, there is complex answers to that, and I'm not a quality expert, but what I will tell you is that we take a guilty until proven innocent approach to every product that shows up at our location, regardless of the nature of the source. And what I mean by that is that we employ the same. Quality inspection measures on all product, as it shows up to us. And we want to prove to ourselves on behalf of our customers, that the product that has shown up to us is exactly as we purchased it, is functional, in good condition, and meets all the requirements. that we required when we bought it from our vendor in the first place. And those inspection techniques, those quality measures can be fairly complex and fairly robust. And because again, we're talking about some fairly microscopic chips sometimes. For example, one of the, one of the quality controlled measures that is common in our space is a process known as chemical decapsulation. And what that is is. Is that we will take a chip and essentially break it open and look at the dye, which is a small piece of the wafer. We will look at the dye on the inside of that chip to confirm that the dye markings on the inside of that chip are what they are supposed to be. Dye is marked by the manufacturer and we, have a large database of dye markings. And so we're able to look basically at the footprint or, or fingerprint, if you will, of, these chips from the inside to help to validate the authenticity of those chips. And so, you know, between decapsulation high powered microscopy, x-ray x-ray fluorescence technology, and a whole assortment of, you know, complicated processes and expensive equipment, we're able to verify the authenticity of product and you know, the condition of the product so that we can give, assurances and guarantees to our customers that you know, what they're getting is, is what they ordered. On the topic of quality in conjunction with this hyper shortage that we're, you know, that that's going on right now, what we've seen in the past, let's say 18 months is a greater emphasis on quality. And I think a lot of that is driven by the different business verticals that have become a lot more active in the open market. For example, aerospace, medical automotive military, and so forth, these, business verticals have high quality standards. Obviously, if product is gonna go into, you know, mission critical devices like airplanes and spaceships and, and military equipment and so forth, there is no room for fault, and there is no room for substandard components. And so those guarantees have to be very strong. And so, what we've seen is higher levels of strict quality measures and testing protocols that our customers are demanding so much so that what we did as a company at the beginning part of this year, around the January timeframe, we acquired an outside test house a lab, if you will that has very robust testing capabilities more than we had in house. The business you know, the practical reason why we, bought this test house was because we were spending upwards of half a million dollars a month outsourcing testing for our customers and sending product out to outside test houses, we were using six or seven of them and paying an awful lot of money and waiting an awful long time for that product to be tested to the standards that our customers were requiring. And. Obviously the cost was an issue, but the other issue was that we were, we felt helpless and we were not in control of the turnaround times and the delivery timeframes on getting this product back from the test houses. So we went out and And bought basically one of our test house partners to bring their capabilities in house, to make our own internal processes more robust. And to also give us the power and the control for the turnaround times that our customers were insisting on and, give us the ability to prioritize, our orders and that has been a game changer for us, quite frankly. I mean, we are the only open market distributor globally that can guarantee two to three day turnarounds on product. And any distributor that is sort of beholden to outside test houses, to complete the, arsenal of, quality checks that are required on chips, you know, they are at the mercy of, the lead times that these test houses are suffering with right now. And some of them are 4, 6, 8 weeks, you know, lead times. So it's been a real score for us, frankly, from a competitive landscape point of view. We're turning product around in two to three days where others can take six to eight weeks and that's been a game changer for us. So it was a, a large investment. But it's, paid huge dividends for us and we've done a good job of integrating, that entity into our own and making them part of our process. And it's, it's just allowed us to you know, it's just really beefed up our, our sales portfolio and our marketing portfolio when we are able to go to customers and tell 'em about all of the different, robust quality techniques and capabilities we have. It, it, it paints a prettier picture for them. So,

Tom Raftery:

And who and who are your typical customers?

Tobey Gonnerman:

it'd probably be a shorter list if I told you who wasn't our typical customers and I, I'm not trying to be, you know, I'm not trying to be a wise guy, but we, we have over 4,000 active customers. That list is growing every day. All of the big name technology companies that you can think of are potential customers of ours. We sell to many different business verticals though. So if you look at the manufacturer of your fan, the manufacturer of your car, the manufacturer of your headset, the manufacturer of your soundboard, those are customers of ours, but also the contract manufacturers, they work with the Original design manufacturers that help to put their, units together, all of the subcontractors that they deal with. But we, we sell to the top OEMs in many, many business verticals, whether it's networking consumer devices, automotive, PCs server, data storage medical on and on and on. A lot of, a lot of big names. None of which I'm going to mention to you because, you know, obviously we have NDAs with a lot of people and, you know, I don't want to uh, talk out of turn about, about our customers, but but anybody that uses electronic components is seeking help from secondary sources, open market distributors, independent distributors like us. You know, as they deal with the pendulum swings of supply and demand,

Tom Raftery:

Mm. Yeah. Yeah, are there any customer success stories that you can speak to?.

Tobey Gonnerman:

Sure. I, yeah, I mean, there there's, there's lots of them, you know, I think one story that would be interesting to share was about a transaction we did very recently and I think the walking through this transaction, I think really illustrates sort of how dynamic our market is, how global it is, how fragmented it is and really sort of summarizes who we are and, and how we do what we do. So, a few weeks ago we identified an automotive subcontractor that we talked to in the US, they're actually Europe based and they were telling us about some excess components that they had at their factory. They had excess on components because they had gotten a large shipment of some parts in that they weren't gonna use anymore, or they decided to, to you know, change their build. And so they had excess on, a large quantity of these components. I think it was 30,000 units or something. So we said, okay, let's see if we can find a home for those components and see if there's any other users out there. Well, it turns out that we identified a north American aerospace company that was actually suffering from a, from a critical shortage on this exact same component. So long story short, we bought the parts from the automotive subcontractor and we sold them to the north American aerospace company. And, the sort of global nature of this was interesting because our auto sub con contacts are in north America. They are European based. The product itself was located in Germany. We have a warehouse in Amsterdam. We picked up the product in Germany. Brought it to our facility in Amsterdam. And then we were supporting this north American they're actually a Canadian aerospace company, but their build was taking place in Mexico. So we shipped the product from our Amsterdam facility to Mexico, to the subcontractor of the aerospace company, to help them with their critical shortage. And I just think, you know, this deal really illustrated, our matchmaking capabilities. And, you know, because we have relationships with so many different customers and companies across different business verticals, we were able to solve, solve two people's problems, you know, kill two birds with one with one shipment, so to speak. And it was a good illustration of how you know, one, one company's excess problem could be another company's, solution to a shortage. It also illustrates how product especially, you know, in the electronic component space, how product can be used across different applications. I don't know exactly the end product of the aerospace company. I to be honest, I think it was recreational vehicles snowmobiles or something like that. And you know, I, and what was the end product from the auto sub con that we bought them from where we got the pro product in Germany. I'm not sure something in a, you know, something in an automobile. But it's, you know, the, the product that we sell, these chips that mount to boards, boards that go into many different types of machines they're they're multi-use devices. And there is, the whole ecosystem of devices. There's high end devices that are more customized, that are direct, you know, direct sale chips that have very limited number of uses and very limited number of users. And then there are low end chips. Discrete components and passive components like capacitors and resistors and so forth that are used in the millions. That are sort of, ingredients that are sprinkled on the you know, on, on the, on the motherboards to help complete the build on a PCB, but then there's everything in the middle, which are, I don't wanna say more generic chips, but they're multifunction devices that can be used across many, many different types of platforms. And, you know, I, don't not that you're gonna do this experiment, but I bet if you broke open the clicker for your fan fan or the clicker for your car or the box under your TV or your soundboard, you're gonna find some chips in all four of those things that are the same manufactured by the same company, similar part number, similar SKU, or, or whatever. And that's where, you know, that's obviously where, where we play, you know, that's, that's that's our market. Nobody comes to us for their customized chips that they can only get from one source. Why do they need us? They can get those from, from the manufacturer. it's the stuff that's widely used multi application, multifunctional devices that people come to us for.

Tom Raftery:

Interesting. Interesting. I mean, we've seen what's happened in the last few years with the, the whole supply chain for chips and semiconductors. What does the next few years look like? Where, where to from here? Both for yourselves and for the supply chain?

Tobey Gonnerman:

I think there's nowhere to go, but up in both cases. And I, you know, I don't think that that's just us with blinders on drinking some Kool-Aid thinking that our business is gonna grow forever and always, but we're very bullish about our own development, growth, and so forth. And we've got our, we've got the pedal to the ground in terms of our efforts to expand locations, to hire more personnel, to diversify our portfolio, to capture new customers, to discover new markets and so forth, but also in the, from a macro perspective, you know, I mentioned earlier that the total semiconductor market continues to grow at 17, 20% a year and is projected to get to a trillion by 2026. One analogy I like to use, which is probably a little bit localized. There was a, but I'm I'm from the Boston area originally. 20 years ago, there was a construction project in Boston called the big dig. And at the time it was known as the largest construction highway construction project, a, you know, ever, ever undertaken or something. But basically it was moving the highway that goes through Boston, from aboveground to underground. And it was a big dig. They dug some tunnels and they were, you know, taking down this elevated highway and putting it underground. And of course, you know, it was probably a five year project that became 15 years. And it was probably a billion dollars. It became a trillion dollars or whatever, but after many cost overruns and all of that, it was supposed to change the world. And, oh, you're no longer gonna have traffic jams in Boston and your commute is gonna be so much easier and so forth. Well, by the time it was finished, there was no difference in the traffic and those of us that did that commute are well aware that it still took two hours in a snowstorm to get from 10 miles north to, you know, in, into Boston center. And why was that? Well that's because the number of cars on the road and the number of commuters grew. At the same rate of them completing this highway. And, and so I liken that big dig analogy to sort of this chips act and building of new fabs and, that the SEMICON industry is undertaking. I don't think that the production of semiconductors is going to keep pace with the rapid the rapid appetite that chips are being consumed at. And frankly, I don't think the manufacturers are either. I mean, if I'm a manufacturer of chips and I'm gonna build a fab, and it costs me billions to build a fabrication facility, I wanna make darn sure that that fab is gonna be pumping out chips. And my average selling price is gonna stay high for the life of that fab. News, flash fabs only have a lifespan of like eight to 10 years. Because once the technology passes them by then that whole, facility is, is kaput and they've gotta build a new one to, you know, build a smaller wafer or, or whatever. You know, I think that the supply and demand imbalance, I think there's rough waters ahead. Has the shortage reached a peak? Sure. Yeah. Maybe we're gonna come down off of Mount Everest, but there's a lot of peaks in the Himalayas. There's a lot more, there's a lot more peaks and valleys to go through. I think it's very unsettled waters. I think for a company like ours, there's still gonna be a robust amount of opportunity until the supply and demand scales even out and stay steady and a that's never gonna happen. And B I think they're gonna be wildly out of balance for the foreseeable future. So that's just our humble prediction.

Tom Raftery:

Yeah, Parkinson's law. I think states that the volume of traffic increases to meet the size of the road. So, to to, to your, to your big dig analogy. We're, we're coming towards the end of the podcast now, Toby, is there any question that I have not asked that you wish I had, or any aspect of this we've not covered that you think it's important for people to be aware of?

Tobey Gonnerman:

No, I mean, other than, additional, shameless plugs of my company and why people should buy, you know, their chips from us. I think we we've covered some interesting topics. But yeah, I mean, I'd like to, just talk a little bit about, what fusion is doing because we have a lot of exciting things going on, including you know, starting an eCommerce initiative that, will launch soon, but, I think our growth as a company is also exemplary of just the growing opportunity in this space and the growing need for electronic distribution options for the people that use parts. So, we are now 19 offices, over 500 employees. Our sales will hit close to 3 billion in revenue this year. And we've had over 30% growth for, you know, the past two or three years, all of that, because this market is continuing to grow. We've been successful for 17 years before that. But the level of growth now is just, is exponential. You know, I guess a couple of things in closing about the, current state of the shortage that I just found a little interesting, a couple of things, one the term force majuere, Was foreign to me, frankly, I had seen it in some contracts and I didn't really understood what it meant. I certainly probably don't pronounce it correctly. But it was one of those things that it was like in, in fine print, right. In like insurance policies and contracts and so forth. It's amazing how much that term has been used in the last two or three years. Obviously a lot of it related to COVID, right. Like I think COVID is sort of this giant force majeure that a lot of people have clung to. So anyway, I've just found that to be a fascinating observation, this sort of nothing terminology buried into documents, in the fine print back pages of things has now become almost part of the vocabulary. I just find that very interesting. That's relevant in our space because obviously electronic component manufacturers have used that to break contracts and to not support customers on product. That's the only reason I'm bringing that up. And then the other, you know, the other pattern we're seeing is terminology. The, the new terminology that's been sort of created in our space that was new to me is like a, a term called near shoring, where people are bringing builds closer to home because they feel naked and exposed when the build is far away. And I want to nearshore this product because I don't want, you know, my plant far away to be shut down for COVID or whatever. So I'm gonna nearshore you know, the manufacturing and then insourcing, you know, we hear a lot about outsourcing, oh, I'm gonna outsource that. It's cheaper. If I have someone else do it, they're a specialist, they're an expert or whatever. Oh, I've put my fate in other people's hands and now that's costing me a pretty penny because they screwed everything up. And so now I'm gonna insource my supply chain strategy. I'm gonna insource the procurement of my own devices. I'm gonna insource. if there's gonna be a problem, I want it to be my fault. Not, you know, somebody else's fault. So I just, I find these terms fascinating because they're obviously reactionary to a hyper shortage market. And what will be interesting is the level of amnesia that sets in post shortage and how quickly people, I guess, heal from the wounds that have been left in, you know, the, the, the price premiums and the angry customers and whatever that they've experienced from, this shortage period, because what the past has shown us is that the amnesia sets in very, very quickly. And just because they, it cost a millions of dollars and they didn't hit their numbers for a period of time, soon as the shortage is over, it's very quickly back to, okay, we gotta cut costs. We've gotta save money. We've got to get back to just in time delivery. We've gotta control our costs and really, penny pinch and, and what they're doing there is living more vicariously, living more hand to mouth and becoming more exposed to supply chain interruptions. So it'll be interesting to see if this prolonged shortage has uh, A lasting impact more so than the many other previous shortages we've seen. Maybe that can, maybe you and I can revisit that a year from now in our, follow up podcast.

Tom Raftery:

Sounds good. Sounds good. Sounds good. Toby. If people want to know more about yourself or fusion or any of the things we discussed in the podcast today, where would you have me direct them?

Tobey Gonnerman:

I would direct them to our website fusion, ww.com. people have the capability on there to reach us each of our different offices you know, through the contact us link, they can also find me on LinkedIn if they want to contact me directly on there. And I, I think you can share, you know, on, on the podcast, my, my details you know, so people can, can reach out to me. But no, I would encourage, You know, any interaction, any, if anybody had follow up questions to anything, we talked about disagreements Pat's on the back you know, controversy or otherwise we, we, well, we welcome that. And, and yeah, I appreciate you. I appreciate you having me on and, and spending some time talking about this fascinating topic.

Tom Raftery:

No worries. No worries. No worries. And I'll, I'll put those links in the show notes. So people have access to your website and your LinkedIn, et cetera. Okay, cool.

Tobey Gonnerman:

appreci.

Tom Raftery:

Great. Toby. That's been fantastic. Thanks million for taking the time and coming in the podcast today.

Tobey Gonnerman:

Tom. Thanks for having me. Um, It was my pleasure. Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chains, simply drop me an email to Tom raftery@outlook.com. If you'd like to show, please, don't forget to click follow on it in your podcast. Application of choice, to be sure to get new episodes. As soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.

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