It’s a whole new world for those distributing electronics products and those designing them. New business realities and new technologies are both pushing everyone involved in new directions. On the business side, organizations are stretching to develop new products more quickly to remain competitive, while still working with financial constraints. Fortunately, on the business side, new technologies and platforms are offering better ways for designers to work with distributors throughout the design process.
Old world view
Electronics distribution has a long and illustrious history of serving customers in a certain way. Their businesses were focused on having the right product in the right volume available. It was about building a line card. The distribution world was split into local/regional players, “catalog houses” that offer quick delivery of a wide variety of components, and specialized distributors that offered a higher level of service. Distributors were judged by the number of “feet on the street” they had, and the number of lines they sold.
Further, distributors were tapped early in the design stage by electronics OEMs. “It used to be that distributors were organized so that product designs would come out of formal engineering projects led within an OEM,” said Terry Bassett, chief strategy and innovation officer at Avnet.
“OEMs and engineers had strong relationships and would access the distributor early for access to the field application engineer and for help with the bill of materials, to bring them all the way through volume production.”
New world emerges
Today, though, the triad of product, place, and price are still important but distributors are being asked to do more. “Really, what it means to be a distributor is fundamentally different and will increasingly be different. It’s not enough to provide access to raw goods anymore,” Matt Anderson, chief digital officer at Arrow told EBN.
[ IoT Rolls Up its Sleeves.]
Customers are looking to distributors to give them an edge in an increasingly competitive market. “Distribution’s value proposition is no longer in simply delivering a part on time at the right price,” said Bruce Kellar, senior vice president of sales at Sager Electronics. “Whether it comes in the form of data, tools, logistics or technical knowledge, customers are demanding more across all facets of the business. Design engineers are looking to distribution for increased value, and they want to partner with a distributor who has moved beyond the traditional sales model of fulfillment to one who provides specialized product knowledge, design, and value-added services.” Nine out of ten of Sager’s customers invest in some form of value-added, supply chain or design service today, he added.