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Which Distributors Do You Prefer?

Component distributors are my favorite players in the electronics supply chain. Sure, I've written more about {complink 379|Apple Inc.} than most other companies in the last few weeks — the company has a great storyline, after all — but despite their lack of high-level visibility, distributors are still central to the smooth flow of products and services in the industry.

Before I dive into specifics, let me present here my image of the distribution market. Electronics component distributors are the glue holding the industry together. I have often described them as a hardy bunch, but component distributors are also great at deftly handling huge egos, smoothening out wrinkles in the supply chain when suppliers and OEMs/EMS providers clash, and helping to take the pulse of the market to reduce the negative impacts of its nasty boom and bust cycles.

Many of the industry's biggest distributors have also been very successful at reinventing themselves. They have branched away from playing the traditional role of middleman (to parts manufacturers and end-users) and become an even more integral part of customers' operations by adding numerous services.

Through acquisitions in North America and beyond, {complink 453|Arrow Electronics Inc.} and {complink 577|Avnet Inc.}, for instance, have grown rapidly over the last decade while keeping to their original concept of representing even the smallest and medium-size businesses globally. Both companies have well over 100,000 customers and represent thousands of component makers.

The smallest distributors with only a few stores in the United States, Europe, and Asia-Pacific can teach us a thing or two about how to survive the treacherous terrain of the electronics industry. Many of these distributors have become highly specialized and skilled in specific market segments, making them critical partners to OEMs in the aviation, instrumentation, industrial, medical, and military markets. These types of companies are known to go the extra mile for customers, who in turn stick by them when the market goes into a recession, as it does periodically.

Over the last 25 years, EBN parent company UBM Electronics has annually conducted a major survey gauging how customers use distributors and which companies in this category are considered “preferred partners” by OEMs and EMS providers. I have always found the results of the annual survey fascinating because they clearly demonstrate the value customers put on the services offered by distributors.

The results of this year's Distributor Customer Evaluation Study will be presented by EBN global director Bob Dumas to executive teams from 20 manufacturers and distributors later this month at the annual Electronics Distribution Show in Las Vegas.

What will you find in this report? The study presents information on the distributors that are used and preferred by engineering, supply chain/procurement, and corporate professionals in North America. Product areas reviewed include semiconductors, connectors and interconnect, passive components, electromechanical devices, and power ICs.

The study reveals how distributors are rated on the basis of patronage (all products and specific market segments) and the likelihood of future patronage, based on current performance. Distributors are also rated on how effectively they provide on-time delivery, the ease of conducting business with them, whether they have competitive pricing, and the availability of products when ordering from them.

EBN readers will be able to access portions of the report by May 26. I will be sharing the results of this study in future blogs, and we will also host a Webast to discuss the findings.

11 comments on “Which Distributors Do You Prefer?

  1. Anand
    May 11, 2011

    “Distributors are also rated on how effectively they provide on-time delivery”

    Bolaji,

     What if the delay in delivery is because of some unavoidable circumstances, will the survey takes into account all these factors ?

  2. saranyatil
    May 12, 2011

    Anandvy,

    according to me it will be taken into account because the survey will be conducted in general they cant cancel out if the reasons were genuine.

    All the measuring parameters will have equal weightage.

  3. Anand
    May 12, 2011

    @saranyatil,

     Thanks for the reply. I had this query because we all know how the events like Japans calamity, middle east unrest had impact on the economy. These events would have definitely influenced the  on-time delivery performance of the distributors.

  4. saranyatil
    May 12, 2011

    Anandvy,

    I agree with you, but Japan is so foresighted that they already had backup of many fast moving goods hence they were able to render to the need from their stock. ofcourse few could not meet the dead lines.

  5. SP
    May 12, 2011

    Well when it comes to these big distributors, I believe they are institutions in themselves for supply chain. They have been loyal to their customers, deliver in times and have quality results. They have not limited themselves to only distributing byt they also get into design support with many of the customers. Many of our leading industry giants definitely would share their success with them.

  6. saranyatil
    May 12, 2011

    SP As you said Big distributors have their own design house which is really useful, it saves you lot of effort and also time. The problems ar solved at ease avoids lot of delay in your project phase.

  7. Parser
    May 12, 2011

    Who are the winners of the past? Who are the top contenders for this year? 

    For me Digi-Key is a very good supplier, but I am not buying any value added services and my quantities are small. I occasionally buy from Newark or Mouser, but to me Digi-Key has been easier to browse and search. 

  8. Mydesign
    May 13, 2011

         Selection of the distributors and giving preferable status are based on many factors. Initially manufacturers select franchised distributors based on a number of criteria’s like pricing, supply capacity, technical support, capabilities, logistics services, payment flexibility, product quality, company reputation, accessibility etc. On the basis of these parameters and performance they may categorize the distributors as preferred Distributor for “Best Technical Support”, “Best Logistics Service”, “Best Supply Capacity”, “Best e-Commerce” etc. From customer point of view also we are grading the distributors based on different attributes like value to customers, design services, tangible benefits of a comprehensive and efficient supply chain etc.

        A best and preferred distributor has to cater the needs of both manufacturer and customers. Then only they can survive. In other ways they are maintaining the link between manufacturer and customers in a supply chain.

  9. Tim Votapka
    May 16, 2011

    An excellent point worth repeating. Distributors face two very demanding fronts – the customers they service and the component manufacturers they represent.

  10. Kunmi
    May 17, 2011

    The efficiency of a distributor is not measure by one time circumstance of delay but the choice of a reliable distrutor depends on many factors: Area of expertize, ability to deliver on timely fashion, Reputations, Customers satisfaction and many other factors

  11. elctrnx_lyf
    May 23, 2011

    I would definitely prefer a distributor who can help me out with reference designs, samples for my prototypes and who works in a very proactive manner. I'm really looking forward to see the results of this survey.

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