Factors to Consider for Minimizing Risk in Electronic Component Sourcing

Managing both distributors and original equipment manufacturers (OEMs) can range from a minimal commitment and online ordering for small companies to forming strategic partnerships with global distribution networks in order to ensure quality and availability to mitigate the risk of manufacturing downtime.

However, there are several common factors to consider when sourcing electronic components including availability, quality, lead times, pricing, End Of Life (EOL) purchases, and obsolescence.

Small companies are usually concerned with price, can readily accept equivalent components, and tend to order from catalog distributors such as Mouser. But, when these small companies experience substantial growth, the biggest concern usually becomes maintaining a stable supply of components as they ramp up production to meet demand.

Allocations and shortages pose a big risk to steady supply and companies are forced to look at multiple sources to maintain production. A quick review of the top 50 electronics distributors shows who the top players are in the current market.

The straight forward solution is to expand the available supply chain to include secondary and tertiary suppliers. The choice of distributors often depends on the size and location of the company and their manufacturing facilities. For instance, companies with locations in the US, EU, and Asia will see the greatest benefits from the larger global distributors such as Arrow, Avnet, and Future. But, in reality, the company will still order from the catalog distributors such as Mouser and other specialty suppliers for ad-hoc smaller purchases, in time of shortages, and for specialty components.

If volumes are sufficient, a natural next step is to approach the manufacturer directly in order to secure both the supply of the parts through Service-Level Agreements (SLAs) and preferred pricing. This will allow for the management of stock liabilities and commitments to minimize lead time or demand time and define…

Article Source…

Leave a Reply

Your email address will not be published. Required fields are marked *