The Constant Battle to Provide Value

The distribution industry has several distinct business models for a reason: Every customer profile is different. DIY-ers, labs, hobbyists, and small and emerging customers most often turn to catalogue distributors for low-volume engineering orders. Though some houses still publish paper catalogues, others that specialize in the low-volume, high-mix order profile prefer the term "high-service distributor."

Few distributors that survived the consolidation wave of the 1990s and the recent downturn can be considered low-service providers. The competition remains brutal. But distributors must continually find new ways to offer value to their customers. Even catalogues, which specialize in providing the fastest, most efficient order processing available, strive to differentiate themselves from one another.

Sometimes that means breaking the mold. It seems counterintuitive not to recommend a part for a developing design, but that's exactly what some distributors will do. Kevin Hess, vice president of technical marketing for Mouser Electronics Inc. , told us that not every part is suitable for a new product design.

"There are parts for which we already know the date suppliers will end production," he said. "When you focus on design engineers, you don't just focus on the part. You focus on the solution. So we will find an alternative to that part -- it avoids a lot of headaches later on."

There's another aspect to catalogue distribution that many customers don't see: Not every part that is introduced is automatically in stock. Carrying an inventory of new parts is risky for the channel. These devices don't have customers yet, so it's difficult for a distributor to gauge how much stock to keep on the shelves. Mouser stocks every part it announces for sale. "Our charter is to launch a new product faster than any distributor," Hess said. "In some cases, distributors don't support new product launches with inventory, technical documentation, or product support."

The strategy is risky. "We are willing to take that risk because we feel we can find designs for that new product," he said. "Engineers want to design in new technology, so we provide all the information available to help engineers select and design the perfect product." Mouser also helps mitigate its inventory risk by finding unconventional applications for products. "It may not work for one application, but maybe it will work in another. We see it as our job to create excitement around a new product launch."

In addition to relying on the documentation provided by suppliers, Mouser hires its own engineers to learn everything they can about a product. This information is aggregated and presented in a variety of ways.

The information is organized so that engineers can find anything they need with a quick glance. Then they can sit through applications development programs through voice over PowerPoint, or read information. If they want to dig deeper, they can get applications notes, spec sheets, buyers' guides, or whatever they need. All of this information is cross referenced by supplier name, part number, and performance specs.

Mouser has gone a step further by providing a BOM downloading tool and referrals to protoype houses to turn out samples of customer designs.

As distribution has moved up the design chain, so has engineering investment. This is an expensive proposition for organizations driven by sales. At the same time, the channel sees gathering and sorting data as a way to provide value for customers. "We want to be a source for product information, not just products," Hess said.