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Pushing the Boundaries

Every company in the electronics industry continually strives to evolve. In some cases, this means focusing on a single core technology; in others, it means expanding beyond the typical boundaries of a business model.

The distribution industry, in particular, has been slowly and deliberately adding services beyond the core reselling of components, expanding into logistics, design, and assembly. More recently, distributors are adding development tools and software to the standard assortment of components.

One of the more interesting developments is the emergence of CAD/CAM tools on distribution Websites. CAD/CAM tools are usually targeted at high-level OEMs that need to track and manage workflow from component selection through product design through manufacturing. The products are complex, expensive, and data-intensive. They're also really helpful, once you've made the investment.

As designers are asked to do more with less, distributors are looking at CAD tools as one way of helping engineers manage data and streamline the design process. “Design is not just selecting parts — it's about tools on the hardware and software side, dealing with all the other elements in selecting suppliers and the managing of the design flow,” says Jeff Jussel, senior director of technical marketing at Premier Farnell ({complink 12800|Newark}'s parent company), who is overseeing the rollout of CAD tools at the distributor. “A designer may use four to five different tool providers for any one design flow. So it's not just hardware or software — you have to be good at all of these things, and we are bringing in expertise that goes well beyond the components.”

One of the advantages of a CAD/CAM tool is a components library that users develop as part of the workflow process. But it's mostly up to the user to keep the libraries updated. Importing product data from a distribution Website can help keep files fresh. Newark has developed translation software compatible with most CAD tools for this purpose. “As we get new products, we can develop CAD libraries,” says Jussel. “It's tying everything together.”

One of the dangers in entering adjacent markets is diluting efforts in a core competency. Doing too many things is one of the reasons OEMs moved to outsourced manufacturing (so the story goes) — more resources could be focused on product design if manufacturing was done by someone else. Is distribution the right place to seek out CAD/CAM tools? For a certain segment of the customer base, many channel players think it is, as part of a wider product offering. Distributors start their value propositions with components and move outward from there.

“We asked, 'Who is in the best place to help the engineer most?' Most of the software vendors have a tool or a set of tools in one area, but that's not great for the entire workflow. We see ourselves as the delivery mechanism” for all of these processes.

Newark has a “multichannel approach,” says Jussel: “A direct sales channel that can reach customers; and we have a very strong Web presence; and we have the tools. So we can actually use the Web to reach some of those customers in a more low-touch way.

“We feel distribution is the right place — we can pull in the best products and integrate them into a complete workflow.”

Is moving into adjacent markets a sound strategy for the channel? Let us know your thoughts on the message board below, or email us at .

6 comments on “Pushing the Boundaries

  1. DataCrunch
    May 3, 2011

    Is moving into adjacent markets a sound strategy for the channel?

    Moving to an adjacent market, if done successfully can be very rewarding. Some conglomerates have been successful at it, but many companies underestimate the complexities of moving into new markets, even adjacent ones. For example, a company that produces technology for asset tracking may technically be able to move into other markets like patient tracking. The technology mat be very similar, but the business is different and more complicated, as there are now a bunch of privacy laws and regulations that the company may have to adhere to. In fact patient tracking may be a different business altogether in the end. I’m not saying that I am against it, but sometimes it is easier said than done.

     

     

     

  2. Jay_Bond
    May 4, 2011

    Dave,

    Your comments are spot on. In some instances moving into other markets makes sense and can be easily done. In other cases, which tend to be more frequent than the previous cases, things can become rather difficult. With so many areas having their own little niches, some moves might be like going into an entirely new field instead of just moving in next door.

  3. Anand
    May 4, 2011

    Barbara,

     Thanks for the post. Its really interesting to know that the CAD/CAM tools have made it to distribution Websites. CAD/CAM tools have always played crucial role in the development of products, just wondering why did it take so long for them to make it to distribution website ?

  4. tioluwa
    May 5, 2011

    The points raised by Dave and Jay_Bond are worth noting, but the quesiton is how do they apply to the issue of distributors and CAD/CAM?

    For me as a design engineer, i don't think the distributors are going out of their way offering  CAD/CAM, however, it is not the first place i'll look.

    Depending on the reputation the Distributor has, their advice nd opinion could be valued, as a way of saving time.

    All it will cost the distributor from my pespective, is some good research into available CAD/CAM tools, their strengths and weaknesses in various design applications, and see how to integrate them to the products they distribute.

    It could be a win for them is well done.

    Again, their reputation with engineers will mater alot.

  5. elctrnx_lyf
    May 20, 2011

    Is the CAD/CAM offerings by the distributors is similar to something like cloud computing or they just selling the tools also. I don't think the later one is useful for any engineers since the number of tools are really very less and most of the times these tools are licensed only once for the complete project development cycle by the OEM's.

  6. mario8a
    May 29, 2011

     

    I think the best place to provide help to the engineers will be empowerment and decition making, many occasions they are limited by poor involment of the middle-management and constrains about research.

    I've seen many products go out the door with so many cost reduction opportunities with the blessing of “we'll fix it as running change”.

    Regards

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