Keeping production lines running

Classic Components’ vice president and general manager, Mike Thomas, walks readers through the process of doing business with independent distributors

Supply chain disruptions are nothing new and faced with chronic shortages and extended lead times manufacturers are considering independent distributors. For many companies, sourcing parts from the independent channel requires a significant shift in mindset.

Classic Components’ vice president and general manager, Mike Thomas, said: “Some companies make the decision to place orders with independent distributors the very first day they are in operation because they understand our market and how we operate in it. But there is an equal number of companies that are hesitant because the chipmakers and franchise distributors have invested millions over the years to de-incentivize their customers from going to the open channel. And I understand that.

“If you are a manufacturer, you need to have as part of your supply chain strategy an independent distribution plan. How are we going to engage? We don’t want to give a broker business and take it away from the franchisor/authorized distributors. But right now, we are the guys that can be strategic and can get parts that work when you need them at a competitive price.”

During chip shortages, companies can be duped by counterfeit products. Thomas describes the situation like this: “An OEM needs a part, but none of the major, trusted sources have it for at least 52-weeks. What happens when an online search produces a list of company names the OEM has never heard of? How do they know which are legitimate and which are not? Classic Components knows all the players overseas. We have conducted rigorous audits and met many of the owners. We know which companies are legit and which should not be called. That is what we do.”

An independent distributor can also offer supply chain management along with a rigorous quality inspection process to ensure the authenticity and quality of each component received. Classic Components utilizes a quality management system and holds certifications including AS9120B, a requirement for distributors serving the aviation, space and defense industry.

Thomas added: “When the parts arrive, we know how to make sure they are good quality.”

The process includes conducting a detailed risk profile considering the known reputation of the vendor, part and end use. In addition, the customer is surveyed regarding the date codes, traceability, etc. Classic Components has developed a scoring system to establish the risk involved in each transaction.

Thomas said: “The process of authentication is much more extensive for higher risk profile items to ensure the chips are legitimate and high quality. There are a lot of steps, and it is very expensive and time-consuming but is critical when the product is a pacemaker, for example.

“Just as it did in 2018, the current chip shortage really reinforces the legitimacy of the independent channel. We are literally helping to keep manufacturers’ production lines running in some cases.”