Agile distributors take the lead

Speed and efficiency are the watchwords of today’s emerging distribution model, says Digi-Key’s executive vice president of global sales and supplier management, Chris L Beeson

Thumbing through a print catalogue to search for new products is a thing of the past. It has been replaced by sophisticated, self-service e-commerce engines with real-time pricing comparisons, an interactive bill of materials tool (BOM) linked to in-stock inventory and a personalised view of purchase history.

The role of the field-based sales representative or field application engineer is also changing quickly thanks to centralised service teams and searchable online resources. Today’s buyers have 24/7 access to technical experts, multi-lingual service representatives, online communities for peer-to-peer problem solving and instant answers via web chat.

Instant information

Supporting this expectation of immediacy and self-service, white papers, tutorials and videos, now replace pre-sales conversations and in-person meetings, which can be unproductive, especially during the discovery phase of a design. Engineers can locate open source designs and download affordable electronic design automation (EDA) tools and when it’s time to buy, the consumer appreciates the flexibility to do it on their own time, knowing that help is just a click away.

Over the years electronic component distributors have evolved to become one of two types: a service-focused ‘broad line’ distributor serving a limited number of volume buyers or the product-focused ‘high service’ distributor that appeals to engineers by presenting searchable products through a catalogue or website. Both models are, however, losing ground to an emerging model, which appeals to both profiles.

Nimble distributors

The next generation distributor is fast and efficient; nimble enough to support tighter production runs along with accelerated time to market requirements, especially if supported with a short product lead-time business model.

This distributor can’t reside solely in one camp or the other. Rather, buyers are demanding a distributor who can remain central in the process, from concept to prototype, to production. The strength of the partnership lies in a transparent yet dynamic product design process with visibility of in-stock parts.

Successful distributors continually build better tools to streamline the product sourcing process, quickly addressing challenges and evaluating new methods to continually improve the user experience.

Digi-Key’s objective is to address this new demand. By breaking standard packing constraints and eliminating minimum order quantities, the company aimed to positioned itself as a ‘go to’ resource for the prototype stage. Soon small order customers returned to place preproduction orders, having gained confidence in the company’s ability to consistently deliver.

Fast and flexible

More and more global buyers are choosing distributors competent in fulfilling high-mix, low-volume orders. Those distributors that succeed will remain focused on the customer while maintaining the flexibility needed to fulfil a complex bill of materials and always seeking continual improvement. This can only help to tackle the challenge of getting to market quickly for customers who are challenged every day with an erratic supply chain environment.

In order to build and sustain a service-focused reputation that drives repeat business and referrals, next generation distributors must commit not only to inventory and fulfilment, but also to investing in people, processes and a scalable infrastructure.

High-mix, low-volume distribution revolves around the real-time dynamics of product design. It’s going to be the fast, flexible organisations that can maintain a vast inventory, which will be best positioned to win in today’s distribution environment.