It’s common knowledge that global supply chains face bottlenecks that impede delivery of essential components. However, that was about to change for a procurement manager at a mid-sized automation company. Her usual sources of industrial sensor modules were advising a six-week wait for delivery. With production schedules to meet, every minute counted. After only a few minutes searching online she located what she needed – in stock locally and ready to ship.
This scenario is happening thousands of times every day in all industries, from Aerospace and Defense to Consumer Electronics. As traditional specialty distributors are no longer sufficient to find hard to find electronic parts, the need for e-commerce style electronic parts sourcing platforms is driving a dramatic shift in the way parts are acquired.
Digital Transformation of Component Sourcing
Online shopping has revolutionised the way components and parts suppliers are now more accessible than ever to businesses large and small. Gone are the days of ringing local distributors or manufacturer reps to source a part, instead businesses can now use specialist e-commerce websites and search millions of stocked components online all at once.
Online design platforms for product creation provide several key advantages to designers, one of which is real-time visibility into available inventory levels, but designers can also quickly read supplier descriptions, compare part numbers, search for components by parametric characteristics, view the IP / intellectual property / software portfolios of suppliers, read user reviews / testimonials and decide in a matter of minutes to hours which specific microcontroller variant or PMIC is required from which of several suppliers can deliver the part in days or weeks.
Some of these online houses can service high volume needs as well as low volume needs. This has become particularly advantageous to a larger manufacturer that may require an online house to source components for a high volume production order. However, the online house can also service a startup company prototyping a new device, one piece at a time from a single component, while the larger manufacturer is ordering tens of thousands of the same component. This has leveled the playing field, and has opened up access to components that some distributor friendly OEMs have historically received at lower prices.
Search Capabilities and Technical Filtering
Search for parts by relevant technical parameters such as frequency, power, package, pinout and temperature etc. Engineers can quickly find high specialization components like RF amplifiers, high accuracy ADC / DAC etc and source them all in one place over Engineers instead of reaching out to multiple distributors to find parts that meet engineers’ requirements.
Parametric search – Many website allow you to search for parts by specifying exact parameters and receiving a list of suitable components based on those specifications. Cross-reference search – Many website also provide cross-reference search capabilities to assist in searching for alternative parts should the part you prefer be discontinued.
Inventory Access and Speed
The traditional methods of distribution and supply chain management are based on known demand patterns. The explosive growth of modern electronics has, however, challenged the traditional approaches to logistics management and created new problems and opportunities.
Components that are in stock at component distributors can now be searched online using the distributor’s website. Parts that are in inventory can be found immediately at the distributor’s website. Some online component distributors have also established distributed inventory networks which can provide parts that are currently out-of-stock locally at other locations around the country or even worldwide. This can be especially helpful for companies working against a tight development schedule. Parts that are hard to find can be received just in time to meet a critical production deadline.
Access to Documentation is another key point of support. On the website for each product you will be able to download relevant Technical datasheets, Application notes and reference designs. You can download these yourself from the Fusion Worldwide shop and will not need to contact us to request them. Fusion Worldwide’s Fusion Worldwide shop is an example of how the website takes a highly technical approach to design and purchasing support.
Cost Transparency and Competitive Pricing
Even with the online platform, there has never been more transparency into the cost to purchase components than there is today. Unlike the traditional distribution space where pricing was “layered” or “obscure” and often even included multiple “tiered pricing” models, with generous “volume” discounts announced publicly, but with obscure levels and calculuses that were even difficult to understand. In the online distribution model, all of these costs are revealed up front, for the buyer to decide for themselves what the right quantity is to purchase based on actual costs, not guesswork.
Should one spread cost savings across all product and commodity categories to encourage broader usage, or target specific categories where cost savings will have the greatest impact to create most value? Should one purchase in larger quantities to reduce unit price, or keep smaller inventories on hand to avoid carrying costs? Should one submit the lowest price bids to suppliers among competing offers within supplier management processes?
Quality Assurance Considerations
Concern for Counterfeit Components/Quality and online suppliers quality assurance processes is increasing. Genuine online suppliers are processed through our qualification process, in addition many products are sent with traceability documentation, certificates of authenticity and full supplier information.
Customer reviews, return rates and product performance metrics offer new insights into a supplier’s credibility.
Future Procurement Strategies
But moving from a paper-based sourcing process to online sourcing is just the beginning. More integration with a company’s existing enterprise resource planning systems, automated purchasing orders as stock levels approach zero, and the use of analytics to predict future needs based on historical usage all can soon follow. For companies serious about making it in the new product development race, online sourcing has become an absolute necessity. The only question is, will you make the transition to using these tools profitably before someone else does?