Customer concerns cannot be ignored when evaluating factors that make a supply chain competitive. If it is true that the customer is the "bread and butter" for the supplier, then the supplier must take many cues from the customer in order to provide a fully satisfying buyer experience. I contend that meeting a customer's needs and keeping them satisfied is the key to not just operating a viable supply-chain business, but assuring return business in the form of continual reorders.
Lest anyone should point out that I am only stating the obvious, let me qualify this statement by saying: To be competitive, a seller must not only know what a buyer wants, but how to capture the buyer in a field of other sellers, often selling the exact same product. This is particularly the case for the distribution network of electronic components.
This article concerns itself with why I as a customer would go to a particular distributor or supplier instead of another. If I can purchase an LM358 from four suppliers or component distributors, what factors decide where I am going to make my purchase? Depending upon the urgency of my requirement, price is not always the top reason.
Having been the 24th employee as director of materials at Digital Microwave (now Aviat Networks), being hired in a startup as a director of supplies with no direct reports just meant that I was responsible for all materials concerns, including purchasing, inventory, MRP, returns, etc. So, now I had to be the person in the company that made sure that all the parts we needed to build something were on hand at the time of the build, of good quality, and at a price that allowed us to make a profit.
Over the years I have thought of the following questions: What did I learn to expect of a good supplier? Why did some suppliers emerge as my favorites over time? How did they capture my business? In the second part of this report, I will list a few of the criteria that made my supplier hit parade.
@Barbara, One person can make a significant difference in someone's life. I think it is a good life goal to want to become that "one person". Thank you as always for your encouraging words.
@Douglas - Great phrase (ever impatient consumer). I immediately thought of the long lines outside every Apple store with every product introduction to the retail market. It begs the question; are the products themselves making the consumers impatient, or are we just in a "gotta have it now" world? Soon you will see an article on the compressed development cycle that has given rise to increased customer expectation for the latest and the greatest and the fastest, mostest, and the bestest mentality. Someday, unless the trend changes, the only thing that will differentiate products offering the same functionality at close to identical costs, will be appearance and ergonomics. Availability would be my prime concern as a distributor, retailer, or consumer. If I can't get it at any price, I am going to go camp somewhere else. That's what unhappy campers do you know. Thanks for the comment.
The bottom line as Barbara points out is that thinking of a particular company as "being in charge," is a recipe for disastrous failure. It's a partnership nowadays and the best partnerships win. If you win and other members of your team get their share, then who cares who was in charge?
On a hierarchical level, you can put the one paying the other partner as the company "in charge" but power is diffused in the industry nowadays with OEMs often in a lower position versus their sometimes much bigger suppliers.
Douglas--what a great story. We all have our mentors and favorites. In covering distribution there are several, but one person gave me some great advice early on. Wes Sagawa, at the time with Arrow Electronics, told me to read everything I could get my hands on any chance I got. I was feeling a bit overwhelmed by the supply chain and worried I'd never figure it out. Well, I haven't, but I'll keep trying. I'm further ahead than I was then, but I still rely on experts and colleagues (such as yourself) to give me stuff to read.
The answer, of course, is the customer is always in charge, but in the supply chain, we have the EMS, distributor and supplier often involved as well. Two decades ago, suppliers were bigger than distributors--in many cases, OEMs--and the dog wagged the tail. Now things have switched--EMS, OEMs and distributors are often larger than suppliers and the tail is wagging the dog. It has changed a lot of the dynamics, but the interdependence hasn't changed: we all sink or swim together.
In today's fast paced world - the combination of an ever impatient consumer and a compressed new product introduction schedule - "Availability" often trumps "Price" !
@anandvy, My next blog does not give a favorite supplier's name so I will respond here for you. Because I am a veteran, harkening all the way back to Fairchild R&D alumni, I have dealt with multiplied hundreds of Inside and Outside Sales people,Reps, Application Engineers, Prodcut Managers, and others who directly or indirectly represented their companies for better or for worse. Having experience with all sizes and capabilities of distributor, factory direct, and independent brokerages, I do have a strong recollection of my favorite people and the comapnies for which they worked. Schweber Electronics stands out as excellent in every measurement posted in part 2 of this article. But, when I look at the standouts of the standouts, it was a man named Dick Carpentier, AKA Captain Capacitor. He worked for a small sized distributor that sold only one product type...capacitors. But, what made him so great is that he loved his job as much as anyone would love a favorite hobby. He not only represented his principals with excellent service, but he kept developing his own knowledge to the point that he bacame an absolute expert on capacitor technologies and companies. In fact, as a buyer, I would have working lunches with him where he would bring notebooks full of his own research and teach me all the technicals with regards to capacitors. He also, on his own time, developed a cross reference Excel spreadsheet of virtually every capacitor manufacturer's products, part numbers, numbering schemes, datsheets, PLM records, and contact names and phone numbers...even if they were not companies he represented. He loved to teach me and I enjoyed every instruction moment. I was in Materials for over 10 years before I was drafted by my own company to take on Component Engineering for R&D and operations. The next 15 years I dug into all kinds of components the way he dug into capacitors. He was a mentor's mentor and his knowledge of his product was so thorough that he became a valuable resource for the rest of my carreer as a CE. When he retired, he gave me a marquetry made by his own hand. I have notebooks on his teaching and every company he represented over the years got the bulk of my capacitor business. This was not a conflict of interest, this was a confluence of interest brought about by dealing with suppliers that had the good sense to look beyond a person's age to hire the best person for the job. Look for suppliers that have a thorough knowledge of their products and will go the second and third and fourth mile for you. It's easy if they have hired the right people. I appreciate the opportunity to give a great guy the credit that was long overdue.
Depending upon the urgency of my requirement, price is not always the top reason.
@Douglas, thanks for the post. I totally agree with your observation. Price is not the only criteria that guides the buyers to choose the supplier. Sometimes buyers prefer the supplier who is delivering the component faster or sometimes buyers prefer the supplier who is providing them with many differnt choices to choose from. Waiting for your next blog to see who is your favourite supplier and why.
RFID makes it possible not only to increase the quantity and types of products streaming through the supply chain, but also to build higher-level products and services.
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.
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