Whether you manufacture in-house or have already outsourced to a Contract Electronics Manufacturer (CEM), you know how critical it is to have a reliable supply chain.
You or your CEM partner can choose from a variety of suppliers when purchasing electronic components. There are advantages and disadvantages to dealing directly with an electronic manufacturer, as well as to employing brokers. Certain industries have very specific needs and prefer to deal with specialized companies such as a certified aerospace industry electronics parts supplier.
Suppliers Via Catalog
Over the years, catalog providers such as RS, Farnell, Mouser, Digikey, Rapid, and others have grown in popularity among electronic component consumers. As the name implies, in the past, when OEM engineering and buying employees wanted to design new components into their products or buy them, they relied on paper copies of their catalogues. Catalogue vendors, with their extensive product selections, convenient quantities, and next-day delivery, continue to play an important role in the UK electronics manufacturing business today.
While a hardware engineer’s desk may still have a well-worn catalog, the internet has changed the game, and most, if not all, of their business is now done online. If you need components in a hurry or can’t commit to minimum order quantities (MOQs) or big pack sizes enforced by authorized distributors and manufacturers, this type of supplier is a wonderful option. However, this service comes at a premium, and as with most ‘convenient’ items, the unit price you pay is frequently exaggerated.
- A large number of stock lines are kept in small batches. Catalog suppliers are an excellent option if you need a few items the same day to avoid a line stop.
- MOQs are rarely used, thus catalogues may be more cost-effective if lower quantities are required for production.
- Premium costs. However, if you develop a relationship with a supplier and establish a solid account, you may be able to obtain preferred pricing (discounted) as part of your supplier strategy.
Brokers aren’t manufacturers, authorized distributors, or catalog vendors. They’re independent vendors who aren’t affiliated with any single franchise. They’specialize’ in locating difficult-to-find and obsolete components. Unfortunately, purchasing outside of a franchise carries a high level of risk, as well as a lack of technical and after-sales support, as well as potential traceability holes.
When demand is high, the market heats up naturally, and prices provided through the grey market might begin to swing rapidly. Unfortunately, it’s not uncommon for the same stock to be sold (virtually) multiple times in an allocation scenario. When checking at ‘available’ broker stock on the internet, pay close attention to the quantity and date codes (if they are displayed) to obtain a better idea of what amounts of stock are actually accessible. If you notice a lot of merchants advertising the same amounts and date codes, it’s likely that none of them actually have the stock and are all communicating with the same source.
Brokers are occasionally unavoidable. Although the risk increases, this isn’t to imply you shouldn’t use them; in some cases, they’re the only method to get parts, especially for older technology. However, if you do need to utilize them, we recommend choosing a small number of brokers to audit on a regular basis to reduce the risk your company faces.
- Typically have access to a large (global) market and specialize in sourcing hard to find/obsolete parts.
- Shorter lead times than authorized distributors or manufacturers are frequently available.
- Technical and after-sales support has been reduced. Technical help isn’t usually a fundamental provision because their main business is buying and selling.
- Substandard or counterfeit parts are more likely to penetrate your supply chain. Parts can travel quickly between brokers, making it difficult to keep track of who has what, where and how the parts have been stored, and who purchased the parts in the first place.
- There is very little room for price negotiation. If they have the components and know you need them right away, you’ll probably have a hard time getting the best deal.