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Independent Distributors: Cutting Through Confusion

In today's world of information and misinformation, choosing an independent distributor can be challenging, whether you are an EMS provider, OEM, or contract manufacturer.

Moreover, after you select the independent distributors for your approved vendor list (AVL), how do you know they are still the right companies three, six, or nine months later? The answer doesn't need to be highly complex, but does require common sense.

Some would propose the most cautious path, saying that you shouldn't choose an independent distributor at all. These folks would tell you to just buy your parts from authorized (franchised) distributors all the time, ignore saving money, and forget about shortages and obsolesce issues.

If you are indeed one of the companies that never needs an independent, you can stop reading now. For the rest, here are a few simple suggestions on how to compile your AVL, reduce risks, and ensure you can procure the parts you need when you authorized supplier can't deliver.

Let's start with a few basic things that are must haves:

  • ISO 9001 certification
  • ANSI/ESD S20.20 certification
  • Product liability insurance of at least $1 million
  • A clean record on all denied parties lists — yes, there are a lot of different lists!
  • A supplier that requires parts be inspected consistently and per a recognized standard, IDEA-STD-1010. For those who don't know, this standard is a 250-page, full-color document that outlines the visual inspection process “dos and don'ts” in detail. It is robust, and you cannot afford to buy parts that are not inspected per this standard. Any OEM, CM, or EMS provider can also have their quality personnel obtain IDEA-ICE-3000 professional inspector certification that is based upon IDEA-STD-1010. So yes, you can do it yourself.
  • A company that has been around a while, at least three years.

So, after you conduct all the research outlined above, you are now ready to start the questionnaire process and inquire with 30 to 50 companies, right?

Not so fast. Each item listed above is included in the rigorous requirements for IDEA Membership. You don't need to recreate the wheel, and this list of IDEA members is a good starting point.

One word of caution: Much like any organization, no one is perfect, and some have better abilities to meet your specific requests. For example, you might want a distributor in the Northeast, one with XRF, one who will decap two pieces for each lot, one with AS9120 certification, or one with a global reach. No matter what you need, your search should begin with companies that meet the standards outlined above.

Final advice: After you have narrowed down this list, buy a plane ticket, and take the time to visit your top three choices. You will learn a lot from seeing, interacting, and understanding how you are treated. After all, the personal relationship you build at the onset will help you in many ways over the long haul.

9 comments on “Independent Distributors: Cutting Through Confusion

  1. Eldredge
    September 2, 2013

    Thanks for the good recommendations for identifying an independent distributor. While membership is a reputable organization is a great starting point, nothing substitutes for a face-to-face meeting and tour of the distrbutors facility.

  2. ComponentSense
    September 4, 2013

    Some sound advice here… do you have details of the mentionned Denied Party Lists?

  3. Hailey Lynne McKeefry
    September 4, 2013

    @Eldredge, I agree…it's all about relationships. Today, we can do so much electronically that it is tempting to scrimp on this step, but for a long term relationship it is worth the effort.

  4. Hailey Lynne McKeefry
    September 4, 2013

    @ComponentSense: Currently, there are over 200 restricted party lists from government institutions worldwide. That's what makes this a challenging task. My understanding, though, is that there are screening software apps that wll check it against multiple lists. I don't, however, have details about how expensive or complicated these solutions are. Does anyone else have experience in this area?

  5. DALE47
    September 5, 2013

    When in doubt, don't guess. Use your contacts and customers to choose a reliable independent. Don't be fooled by the web site. A lot of “brokers” have developed ficticious web sites. Reputation is the key, as is a Quality department. A membership in IDEA is a great place to start and remember, size does matter. A larger supplier will have in place more security features than someone working out of their garage

    Also don't be fooled by the “Authorized only ” hype. There are no guarantees in the current supply chain. Many independents also buy direct from major component manufacturers, and the Authorized can only offers their own lines. No one stop shopping.

    The government has developed a list of “Trusted Suppliers”, another great place to look, but keep in mind they also have a list of “Trusted OCM's” and it is not a large as you would think, with most Chinese manufacturers not listed.

  6. FLYINGSCOT
    September 6, 2013

    I thought your article was very informative and helpful especially your sage advice at the end of actually visiting the top 3 to kick the tires for yourself.

  7. Daniel Ellsworth
    September 6, 2013

     

    Thanks for the kind words about the article.  As for the denied parties list, there are several different lists from various government agencies.  It would be great if the US Govt would consolidate and create one master list; however, as of today this is not the case.

    As for IDEA membership requirements, it is mandatory / required as a condition that the Independent Distributor not be on any of the following lists:

    1.     Company cannot appear on the EPLS Government List or any of the following lists found on the U.S. Department of Commerce Bureau of Industry and Security website while an IDEA Member or within four (4) years prior to applying to become an IDEA Member:

    a.     The EPLS Government listing*

    b.    The Denied Persons List**

    c.     The Unverified List**

    d.    The Entity List**

    e.     The Specially Designated Nationals List**

    f.     The Debarred List**

    g.    The Nonproliferation Sanctions List**

     

    This is just one of the many requirements that helps to ensure IDEA is maintaining stringent requirements.

    However, IDEA member or not, people can feel free to check these lists—-no membership required.  Most solid Independents will also cross reference any customers to these lists to ensure parts are not going to terror groups/ bad guys.

    Thanks for inquiring about this.

     

    Dan

  8. jesse_securecomponents
    December 10, 2013

    A couple of other criteria you can use to qualify an independent distributor are as follows: 1) Have they been audited and approved by DLA to participate in the QTSL program. A list of approved distributors can be found here http://www.landandmaritime.dla.mil/offices/sourcing_and_qualification/QTSL.aspx 2) Is the independent distributor you are qualified AS6081 certified or have a documented counterfeit avoidance plan that has been incorporated into their quality management system.

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