What improvements would you like to see from distributors in the next 12 months?
Alan R. Edelman, ECN Reader
I would like to see distributors use their CRM and other software tools to gather and link manufacturer component part numbers to a customer’s part number in order to facilitate the proper dissemination of part specific Errata, Counterfeit, PCN and EOL notices in a real time fashion.
|Clay Parrill, president, Electrocube, Inc., www.electrocube.com
With the construction and equipment industries on the rebound, manufacturing is slowly on its way. By examining what we all do well and how it can be done even better, we have the opportunity to streamline processes and connect with new and existing partners. The tentative interaction between distributors and specialty manufacturers is a prime example. For instance, when distributors receive a bill of materials to fill, 95 of the 100 products are easily found in catalogs. However, five will be a specialty or hard-to-find part that requires a low volume or a separate, off-catalog search – a traditionally difficult process. Though not as easy as cataloged parts, obtaining these five doesn’t have to be a task set aside for later. Instead, because these parts include a higher effort, it requires more technical information as early as possible. For their role in streamlining the process, distributors should reach out and communicate with manufacturers. Bring this information – drawings, specifications, end-product application, competing companies (to cross-reference part numbers), target pricing, quantities and deadlines – so that we can serve you better. As manufacturers, we should ask for this information up front, gleaning the most amount of detail from the start. We should establish a chain of communication for the most efficient interaction possible – connect our manufacturing engineers with the distributor’s technical expert or the customer’s engineer directly. Finally, we should encourage direct communication – initiating a 10-minute phone call in place of several emails over the course of hours or days. In most cases, the perceived and previously understandable hesitation is the largest barrier to filling these orders.
Michael Foster, Distribution Sales Manager, Pulse Electronics
The one improvement I would like to see from our distributors is to maintain enough inventory of our products to keep lead times respectable. I want distributors rather than brokers. That’s the value add proposition of distribution. Pulse Electronics began using distribution about 20 years ago. Distribution stocked our products and made them readily available from a reliable source. In today’s distribution world, the model is changing. Many distributors no longer carry higher inventories but rather often only order inventory to cover a month or less beyond suppliers’ lead times. When lead times stretch or shortages develop, production problems ripple throughout the supply chain. Failure to stock enough inventory in the channel increases production time-to-market, slows the entire supply chain, increases product cost, and often results in lost business. Customers are more likely to use distributors they can count on to have the parts when they need them, and build relationships that endure, even when parts are more plentiful. The industry believes inventory is bad and costs money. That’s true, but expediting meetings, teams to find parts, engineering time to qualify alternate parts, and manufacturing lines that have to be constantly ramped up, slowed, or shut down can cost a lot more money.
|Roy Druian, Senior Global Channel Marketing Manager, Silicon Labs, www.silabs.com
Distributors have steadily advanced their logistics models with refinements to manage the flow of semiconductor products from the supplier to the customer. Yet the customer now requires more. It has been said that a distributor’s most valued asset is inventory. Nowadays, it is sales and engineering teams. After several years of challenging economic times, semiconductor suppliers have a growing need to develop more collaborative ways to engage with customers. Many chip companies have limited customer reach through direct sales channels. Distribution partners extend that reach. In addition, customers are now asking more from their “supply chain” – design services, device selection and advice, software support and complete systems solutions. Semiconductor suppliers know end customers don’t work or design in a vacuum. They need to create complete system solutions. Distributors are in a position to see the big system-level picture. Ideally, distributors should offer enhanced “consultative skills” – the ability to understand the customer’s problem and respond as trusted advisors. This holistic approach will offer comprehensive solutions that combine analog, digital, mixed-signal, power and wireless devices from multiple chip suppliers and key partners along with development tools and enabling software. The customer discussion broadens from “so you want to use an XYZ part” to “help me understand how the functions in XYZ affect your total system.”We must now look to our distribution partners to build skills in these broad areas and to develop a partner network that can support this selling process.