Will you source electronic components through tablet or smartphone applications in 2012? Component distributors are betting engineers and purchasing folks will be conducting many more of their procurement activities via mobile devices.
Distributors have begun to offer free, downloadable apps, but it's not clear if engineers are ready to do more than look up prices and check availability. The technology won't be a problem. Emerging technologies such as HTML5 will make graphics pop, enhancing the image on smaller screens and enabling engineers to get a full view of products.
At Digi-Key Corp. , smartphone and tablet apps should begin to support global growth this year, as the ability to purchase components through free downloadable apps for mobile devices gets easier. Digi-Key president Mark Larson, in an interview, declined to predict to what extent mobile apps could contribute to overall revenue, but as more businesses use mobile devices to find information about products on the go it could become a more important strategy.
Though the market is in its infancy, it turns out that mobile procurement is growing quickly, and so are services supported by Digi-Key on Apple's and Google's operating systems. Larson said thousands of customers (not hundreds of thousands) choose to make purchases and order components through the distributor's mobile applications. The app for the Android OS lets engineers find parts by scanning the barcode. It also lets them create packing lists from invoiced orders.
Digi-Key isn't the only electronic components distributor to offer an application running on the Android OS. Premier Farnell plc (London: PFL.L) and Element14 offer up mobile applications. Avnet Inc. (NYSE: AVT) also supports a mobile application for that company's Supply Chain Central, launched in October 2011. Customers must have an Avnet user ID and password to access their account.
John Sanders, director of supply chain at Avnet Electronics Marketing Americas, explains the Supply Chain Central (SCC) app is an information tool, not a shopping cart. Avnet wants to send engineers to AvnetExpress.com to purchase components and "to also cross-reference part numbers, download data sheets, and do a parametric search for what you need, as well as downloading a bill of materials," he says.
Avnet designed the SCC app for customers that want to manage their supply chains, but want an option beyond computers. "The app gives them quick access to order information in a digestible format for their mobile device," Sanders said.
While the free SCC app allows engineers to search orders and view details and tracking information, it's not clear if Avnet will support ordering through the app any time soon.
The searchable categories of orders include open, past promised date, canceled, closed, in transit, recently shipped, shipped within 30 days, upcoming, and potentially delinquent orders. With the SCC app, customers can quickly find out how much consigned inventory they have for a specific part number. They also can determine how much inventory is in the pipeline for a specific project, or if an important order shipped, complete with tracking number. Sanders notes that the goal was to provide customers with simple access to these answers from their smartphones or tablets.
Other companies are jumping in with Android apps that have the ability to either look up information on products or facilitate their purchase. Search on the keywords "electronic components distributor" in Google's Android Market, and you'll find an app from Supply Frame called FindChips, and Magetmedia, which introduces an app for sourcing industrial machinery, tools, and materials across 20 industries supporting manufacturers in China, Taiwan, Hong Kong, the Middle East, and Africa.
Purchasing components through these apps may not be prevalent today, but mobile apps will become the future for online ordering. Big-box retailers have already begun developing and distributing apps through the Android Market. Take Target, for example. The Target app downloaded right to the phone lets consumers browse and purchase favorite items. It also sends alerts to the phone on special offers, checks prices, and more. Would engineers and supply chain experts get locked into a distributor's apps if it could do the same?
Laurie--I just had one of those "duh" moments. Of course advertising can monetize apps. In fact, distribution is a perfect vehicle for this since suppliers can advertise through a distributor and many do. In the olden days of co-op advertising, the supplier and distrbutor split the costs. Whether it's on paper or digital, it still makes sense. Thanks as always!
Hi Bolaji, Yes, graphics often take time to load, but search engines, such as Google and Bing, continue to work on ways to speed up the Internet. What do I mean? Google in this post explains. Google distributes a monthly online publication called Think Quarterly. This time the Speed issue of Google's Think Quarterly is about the acceleration of everything. The search engines also spend time educating industry execs at a variety of companies on the importance of Web site page and app load times.
Okay, Laurie. It's possible apps developers could offer advertising to offset the cost of developing the application but that only compounds the problem. Ads are typically graphics heavy and take time to load, which could deter users. My feeling is that apps for mobile devices are complementary to all of the other services distributors offer and the cost may not be so high that they have to go through all these twists to justify the expense.
Sometimes, this type of marketing and sales activities is part of the cost of doing business. You may not see the payoff right away but if you are not in it, somebody else will take your place. The payoff, of course, can be tracked. A company can have buyers tell them how it learned about the service or how they get information about the distributor's linecard, etc. This may add to the cost of developing the apps.
Barbara, you can make money on a free application by offering advertising in the app. Even if no one places one order, the distributor can make money. Paper catalogs worked the same way. They offered information, not an ordering platform. The information sat side-by-side with advertisements from component manufacturers wanting to reach out to potential customers.
I like your scenario, Rohscompliant. I can see it. The electronics industry is ahead of the curve on many supply chain issues, but when it comes to offering a way to order components on mobile, there are a bit behind. I would take much for the electronics industry to catch up. I can see the mobile ordering system linked in to replenishment systems and warehouse inventory systems, too. I would just take a bit of work.
Thanks for the feedback, readers, and some real-life examples of apps-in-use. The part-substitution scenario sounds very plausible and could mean the difference between a sale/no sale. If only a few distributors offer apps, the one that does will win the business if an engineering order gets placed. This builds customer layalty, and so on. On the flip side, I agree that tracking a BOM on a cell phone would be a nightmare--no fault of the app--even a PC screen is often too small to get a full picture of what's going on with a BOM. At some point, I'd like to see how distributors "monetize" apps--in other words, how many orders does it take to make the effort worthwhile? Or is providing an app the new cost of entry and you are going to have to have one to even play in the game?
Between looking for parts on a tiny screen and looking at datasheets on a tiny screen I can't ever see apps taking off as a resource. Has anyone actually tried looking for a part on a phone. Sure, you can get right down to it if you already know the exact part number, but searching keywords and parameters is a serious pain because the search process for an engineer almost always ends up on the datasheet(and that's even more painful given the format of datasheets). Digikey's app is poorly implimented. I gave it a fair shake, but if you are going to look for parts going into an actual design, it is still near impossible to use and the regular website still works much better despite the small format on a handheld screen. The only "innovation" it has is the abillity to scan barcodes on part packages and bring up the product on the web which is a help in the stockroom, but that kind of technology has been around for years.
The real benefit for distributors and suppliers may very well be that their component supply, supported by such apps, are the first options that the engineering/procurement folks find for their application during the development phase. Once designed in, the supplier is in a good posiiton.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
To save this item to your list of favorite EBN content so you can find it later in your Profile page, click the "Save It" button next to the item.
If you found this interesting or useful, please use the links to the services below to share it with other readers. You will need a free account with each service to share an item via that service.
Tweet This