What is an Electronic Components Distributor

Within the electronics industry there are many distributors for electronic components. Different electronic component distributors operate in different ways.

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Electronic component distributors form a key part of the supply chain for providing electronic equipment manufacturers with the components they require - everything from passive components through to semiconductor devices of all types, and leaded components as well as surface mount components and devices..

Distribution is a complicated process and getting components in the right place at the right time is a major key to a successful operation.

While component manufacturers do not have the capability to interface with thousands of companies large and small, distributors are set up to handle the supply of different components from different manufacturers to a large number of companies.

Video: What is an Electronic Components Distributor

What is a distributor

An electronic component distributor is an organisation that will supply electronic components from a variety of manufacturers to electronic manufacturing, development, repair and service organisations.

These distributors will typically hold good stocks of components from a variety of manufacturers enabling companies to obtain the components they want in the quantities they want and int he timescales they need.

In the early days of electronics, equipment manufacturers and developers would approach the component manufacturers directly for their components. However component manufacturers often did not want to deal with small quantities and with a vast number of small companies.

Accordingly component stockists and distributors started to appear, and increasingly people and companies went to them as they could supply a variety of components. This made buying easier.

As time passed, component distributors grew and the quantities they handled increased. As component manufacturers increasingly used them for larger quantities they became an integral part of the electronic component supply chain for requirements of virtually all quantities.

Distributors handle all forms of electronic components: passive components, semiconductor devices of all forms, leaded or through hole as well as surface mount components, SMTs or SMDs. In fact the surface mount components are the vast majority of the components used these days as they are the best option for mass production.

Although no two electronic component distributors are the same, they provide a variety of services that make the component supply chain easier to handle. Some of the capabilities they provide include:

  • Supply wide variety of components:   Obviously the main purpose of an electronic component distributor is to supply components from different manufacturers.

    Traditionally the supply of components can be split into two main broad areas:

    • Small quantity supply:   The supply of small quantities of components was the area where many distributors started. Manufacturers of components were not willing to supply small quantities and as a result many distributors set up. The supply of small quantities of components is often required for activities including development, prototype or small quantity production and service / repair.
    • Large quantity supply:   The large quantities of components are required for large production runs. Originally these components would have been bought directly from the manufacturers, but now they may be bought via distributors to improve the supply chain operation.

  • Provision of supply scheduling:   Electronic component distributors are often set up to enable component deliveries to be scheduled for when they are required. Manufacturing philosophies like Just-In-Time, JIT require accurate scheduling of components, otherwise the benefits of running a JIT line are lost.

    Scheduling of components is an important element of any large scale manufacturing operation. Often manufacturers do not want huge stocks of components on their sites, and having the distributor deliver them when they are required takes a lot of the burden of storage away from the manufacturer so that they can focus on their operation.

  • Support:   Often distributors can provide technical support, although increasingly alt he information needed is on-line. This can be on the component manufacturer's website, but often the distributors also have all the data that is needed. This can be accessed alongside the entry for purchasing the component, and in addition to this distributors also have a large amount of application and other useful information.

    In addition to this information, many distributors have set up departments in conjunction with manufacturers to provide the support that is needed both for making decisions about the right electronic component, and secondly for solving technical issues.

  • Take back of excess stock:   In some instances the electronic component distributors can take back excess stock. For example if a production run is cut short then the manufacturer may be left with considerable quantities of excess stock which he cannot sell. The distributor may be able to handle this.

    In view of the issues with counterfeit stock, this would only be undertaken for special circumstances and if the packaging has not been disturbed in any way.

When choosing an electronics component distributor for a given project, line of components or part type, it is necessary to consider what they can offer against the requirements. Size, support, quantifies and all these type of parameters need to be considered.

Types of electronic component distributor

When considering which component distributor or distributors to use, it is worth considering what type of distributor they are. This can have a large bearing on the approach they will take. This may or may not meet the needs at any given time.

It is very difficult to have hard and fast categories, because the electronic component distribution industry is changing fast, and the various companies are changing their approach to gain additional market share and also match their offering to the changing market requirements.

  • High service distributor:   This type of electronic component distributor tends to have a very number of stock items. Often several hundreds of thousands and they are willing to ship small quantities and very quickly - often a day or so. This type of distributor is generally used for development and small production runs.
  • Broad-line distributor:   This type of distributor is more geared up for dealing with companies that require stock for reasonably large production runs. Scheduling of product and storage when not in use will all be considerations when looking for this type of distributor. While they are moving to have a greater capability to supply small quantities, they will tend to target the large quantities more.
  • Specialised distributor:   This type of distributor will have expertise in a particular area. For example there are a number of RF and microwave distributors that will have expertise in this area and stock the more specialist components associated with their speciality. They often adopt a more traditional approach to component distribution.
  • Independent sales and marketing organisation, ISMO:   This type of organisation can be considered more as an agent who can arrange for the supply of components when required. Carrying no stock, these organisations fill a gap in the marketplace and are useful in a number of circumstances.

It should be remembered that these categories are very broad and no one distributor will aim to fit a given category - instead the company will aim to meet a number of market needs and goals they see.

When looking at selecting a distributor, it is necessary to consider al aspects of the service they offer to see whether it fits with the requirements for component supply. Whether vast quantities are required for huge electronic manufacturing, medium quantities for more specialised pieces of equipment, or smaller quantities on fast delivery for electronic circuit design and development, etc.

It may also be necessary to use more than one distributor, especially where specialised components like microwave items, etc might be needed.

It is also worth remembering that some large quantity distributors have bought out others that wee more used to supplying small quantities the aim for these has sometimes been to enable them to supply development and production. Other distributors have tailored their offerings to enable them for supply components for the lifecycle from development to production.

It is worth checking the capabilities and offerings of a wide variety of distributors before making any selections.

Benefits of using a component distributor

There are many benefits to using an electronic component distributor. To some, they may appear to be, yet another organisation int he supply chain adding cost. However electronic equipment manufacturers see them as an essential element of the supply chain.

Distributors bring many benefits: time benefits, cost benefits and many more advantages:

  • Component scheduling:   It has already been mentioned that distributors are able to buy, and store electronic components, and deliver them when they are needed. This provides a considerable benefit to equipment manufacturers as they do not need to reserve large areas for storage, instead they only need to provide limited storage for components that are needed for current production.

    As the distributor will have many other companies to which they supply stock, they have a large buying lever to enable components to be obtained for when they are needed.

  • Fewer suppliers:   One of the advantages of using a distributor is that it reduces the number of suppliers needed. One of the ways manufacturing companies can streamline their operation is to reduce the number of suppliers they use. If they can use a distributor, this can be one suppler for multiple sources of components and this can considerably ease the buying situation for them, thereby saving costs.

  • Long lead items:   One of the major issues facing all electronic equipment manufacturers is that of obtaining all the components they need when they are required for the production run. Any shortages will significantly impact the production, and any printed circuit boards or other electronic assemblies with shortages will not be able to be completed until all the components are available.

    With semiconductors in particular often being subject to long lead times - often up to a year or more when demand exceeds supply, this gives manufacturers real issues.

    Often component distributors can help in these situations. As they will buy for a large number of companies, they can often have more leverage with the component manufacturers and as a result they can often help in these situations.

  • Counterfeit components:   One of the major issues facing many companies is that of supply assurance. For some companies, it is vitally important that no counterfeit components are used. Those manufacturing for governments have to be particularly careful because they could have contracts cancelled and future orders banned if they were to use electronic components for which the source is not certain.

    It is relatively easy for these electronic components to enter the supply chain and if components are bought from non-recognised dealers, then there are no guarantees about quality, etc.

    Using a franchised distributor will give assurance as they will only buy from the manufacturers and have many processes in place to give the required level of assurance for the components they supply.

  • New component introduction, NPI:   One area in which component distributors can help is with supplying the latest components. New component introduction is a key aspect to many distributors and many development and manufacturing companies will want to use the latest components so that they can provide the highest specifications and greatest levels of functionality.

    Many distributors specialise in new product introduction, NPI, and they can help developers obtain the latest components for their new electronic circuit designs and later for production.

Electronic component distributors are an essential element in the supply chain for virtually all manufacturers that use electronic components. They add value and save equipment manufacturers costs, enabling them to buy the quantities they want, when they want and to have the deliveries scheduled. They also enable development organisations to buy small quantities to fulfil the needs of development, or repair.

The electronic component manufacturers stock and supply all forms of electronic components from traditional leaded devices, passive components including capacitors and resistors as well as a huge variety of semiconductor devices: discrete transistors, FETs, etc as well as integrated circuits. In fact the variety of components handled by many distributors is absolutely amazing, and may include virtually every type of component imaginable as well as mechanical items, etc.

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