Key considerations for selecting an electronic component supplier
When it comes to selecting a supplier of electronic components, it all comes down to their capability to deliver the right product when and where you need it. That means you need to evaluate both their production capabilities and ability to manage the uncertainty inherent in any supply chain operation.
A good supplier doesn’t just weather changes in a dynamic marketplace but can find opportunities and capitalize on them. When facing down market changes, you want suppliers that can adapt to them.
In addition, understanding a component manufacturer’s product roadmap gives insight into its ability to innovate and support future design strategies and product developments.
When assessing a supplier’s capabilities across these critical areas, consider the following:
Reputation for innovation: Does the supplier have a reputation for being a leader in the industry, or does it tend to be slow to adopt new trends?
Product roadmap: A supplier with products that meet technical requirements today should also have a robust technology roadmap that supports future design strategies and development. An innovative supplier will have a good R&D budget, support research and development activities, and regularly extend and add new product lines.
End-of-life strategy: No manufacturer wants to be caught off guard when a part reaches its end-of-life (EOL). A good supplier will have plans for product lifecycle management and provide sufficient lead time for customers to make a last-time purchase or find an alternative part. In the case when there is no one-to-one replacement for a part and the supplier should be an active partner in helping develop a solution.
Adaptability: If the past few years have taught the industry anything, it’s that companies need a strategy for managing everyday fluctuations and quickly responding to unexpected challenges. How have they historically handled shifts in demand or a potential stop or delay in production? What measures have they set up to tackle these kinds of challenges?
Lead times: It’s important to understand a supplier’s lead times for parts, which can be especially critical for a new product introduction (NPI) and scalability for production. Of course, lead times can be subject to the vagaries of supply and demand, so it’s important to understand their performance to stated lead times, the terms of any allocation policies when there is surplus demand and their use of data-driven analytics in their forecasting and inventory planning process.
Partnering with a distributor: Some suppliers may opt to utilize a distribution partner, rather than sell their products direct to the market. Many device manufacturers also work directly with a distributor. There are many financial and operational advantages that a distributor such as Avnet can bring to the partnership, including:
- Assisting with component selection, technical design support, and supplier vetting
- Performing a risk assessment on the bill of materials (BOM)
- Providing access to data for risk intelligence (for basic parameters such as EOL) and supplier vetting
- Providing inventory buffering services, which provide a higher level of supply assurance and agility, including upside flexibility as well as downside protection by postponing financial and physical ownership
- Expediting the launch of new products by positioning material and reducing lead times through a buffer stock solution to provide material readiness when the manufacturer or their contract manufacturers place orders
- Sharing information on global trends and industry roadmaps
- Delivering smoother, global supply chain operations
By doing a thorough assessment of a supplier’s capabilities, a manufacturer will be better positioned to choose capable, reliable partners that will help ensure their success.
Cindy Eldridge, Director, Supply Chain, at Avnet contributed to this article.
More insights on selecting the right suppliers:
How to choose the right electronic component supplier
How to manage electronic component supplier selection risk
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