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.
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.
The when of design & distribution
Further, the demographic of customers is shifting as well. Manufacturers who make goods that have not historically featured electronic content find themselves facing design questions that go beyond their technical expertise. White goods, clothing and footwear, and a variety of products now are connected, for example, a trend that will only continue. “In the future, distribution will have customers making IoT and connected products, and so many companies who have never worked with technology that may not exist yet are coming in the being, where electronics is now at the core of what they do and ancillary to what they have done,” said Anderson.
The business of making hardware is changing in other ways as well. Increasingly, products are a combination of hardware, software, and products that bring hardware and software together in embedded systems. Further, electronics engineers and designers within companies are being joined by hobbyists and makers who are designing and building their own products. Meanwhile, the wealth of information available digitally, on vendor and distributor web sites, product aggregators, and engineering communities, allows professional designers, students, and hobbyists an opportunity to access design help at any time of the day or night.
“Today, we see complete democratization of design,” said Bassett. “A rapid pace of hardware design is emerging and it is coming from a broad spectrum of players. Designers are accessing information and design tools digitally and making decisions using available information and resources before they ever reach out to distributor about a formal design.”
Even as the role and timing of the field application engineer (FAE) begins to shift, distributors still have a huge role to play, of course. After the intellectual property of a new product is defined, many designers want a reality check to make sure that the parts that they have used are both optimal for the design and likely to be available throughout the lifecycle of the product.
Further, some look to FAE’s to help them cut through the deluge of information. “While the growth of the internet and improvements in logistics have opened up access to a wealth of information and quickened time to market, customers are often overwhelmed with the decisions they face,” said Kellar. “Recognizing this stressor and translating a need into a solution is where a distributor partner can prove themselves invaluable to an engineer.” In addition to meeting design requirements, engineers can help designers work through supply chain factors such as inventory availability, end of life (EOL) status, environmental regulations, logistics, and cost.
New platforms, new customer profiles
In recent years, designing electronics products has become easier for a variety of reasons, a reality that is also changing the face of the typical customer. Two factors that are driving this trend are the advent of open-source prototyping platforms such as Arduino, affordable single-board computing platforms such as Raspberry Pi. “Designers can orchestrate what they want to do and them reverse architect the hardware and figure out the cost difference of the manufacturability of certain choices,” said Anderson. “They need to understand the interplay between hardware and software. Today, if a distributor is not dealing with cloud, embedded software and security, they are not taking care of the customer’s needs.”
Meanwhile, crowd sourcing platforms like Kickstarter are providing funding sources to support innovation. “You don’t have to be an electronics’ engineer to design things,” said Bassett. “People are getting into hardware design without historic credentials or pedigrees needed to do design work. Plus, the ability to get money has really extended the playing field for a whole lot of players. Now, we have to broaden the definition of the product designer.”
Digital access: Tools, information & community
To touch base with designers earlier in the design cycle, electronics distributors are beefing up their web sites and investing in new channels to give designers the product information and help they want in the form that is easiest for them. “The entire digital movement and transparency of information, along with access to open source tools and the leverage of the engineering community is the first phenomenon, and it is going to change the legacy way that designers interface with distributors,” said Avnet’s Bassett.
The biggest distributors are investing heavily in getting better mindshare with designers, and being the go-to place for information. “Everyone is investing heavily on online tools,” said Victor Meijers, senior vice president at the Electronic Component Industry Association (ECIA). “It’s not just datasheets and basic stuff, but also design in tools, video on how to use things, parametric data search, product life cycle information, and bill of materials help.”
For example, in October 2016, Avnet completed its acquisition of Premier Farnell. As part of the deal, Avnet now owns Element14. Avnet also acquired Hackster.io, an online community that has open-source project tutorials, webinars, discussion groups and design challenges. “We have over 800,000 registered users and growing rapidly,” said Bassett. “People love the agnostic nature of the community and the access to bright minds of all types. Our suppliers are eagerly trying to test out new products there and it is how entrepreneurs will take their products into leading edge technology. Community has become a pervasive tool.”
In May 2017, Avnet also partnered with Dagon and Kickstarter to create the Hardware Studio. The platform offers a community, tools, and tutorials to help design newbies to master the challenges of design and manufacturing prior to launching on Kickstarter. “We are trying to advance people’s path to production,” Bassett said. “One of the interesting byproducts of that was that, although we thought we would start with small, early stage startups, we are seeing innovative products even from well-established companies looking to expedite research and development. “
Meanwhile, Arrow has teamed up with crowdsourcing platform Indegogo. The platform has 7,000 or more active campaigns at any giving time. Arrow, meanwhile, started offering the Arrow Certification Program, aimed at helping designers ensure that their product can successfully be transferred from prototype to being manufactured in bulk. The program makes resources available to those who qualify at every stage of product development.
This is particularly useful both for small designers and for organizations that come from non-electronics industries. “Companies used to providing commercial and industrial products are taking these things and making them smart and connected,” said Anderson. “They’ve never put a piece of electronics in anything ever. They have no concept of how complex that technology life cycle really is.
Further, Arrow owns Silicon Expert, an online component database that includes over a billion parts from more than 15,000 suppliers. Without human help, designers can find data about a variety of component data that goes beyond part specifications, including conflict minerals data, RoHS/REACH data, EOL, potential for future price discounts, and more. The service also includes a bill of materials (BOM) manager. “The real magic is that we are taking that data and information and making it available in real time as designers are making decisions,” said Anderson.
This new distribution path is not without its challenges. “There’s some big challenges with providing information,” said Meijers, adding that communicating information changes tops the list. “Communicating product change notifications to folks is still one of the biggest bugaboos we have in the industry.” The ECIA is working on strategies to standardize that communication, he added.
In the end, the winners in distribution may be the ones that have both the right product in the right amount at the right time (an element that will never change) and the right information delivered by the most useful tools on the easiest to use platforms into the hands of designers.
— Hailey Lynne McKeefry, Editor in Chief, EBN