New Buyers Turn to Distributors for Procurement, Design Help –
Distributors traditionally have been important sourcing partners to established second- and third-tier OEMs and electronics manufacturing services (EMS) providers. Distributors provide such customers with components as well as a plethora of design, value-added, and supply chain services that help companies reduce cost and better compete.
However, in recent years a new wave of fledgling startups hoping to become the next FitBit or GoPro also have been using distributors as strategic sourcing partners. Although startups often have an idea for a hot, new, potentially game-changing product, they often lack expertise in design, manufacturing, procurement, and supply chain issues.
Many startups turn to outside design houses and EMS providers for design and manufacturing expertise. But many also look to distributors for sourcing, purchasing, supply chain, and design know-how.
Distributors point out that they have both the inventory and the technical and supply chain expertise that startups need. Many startups lack such expertise, as well as the resources to hire design engineers. They turn to distributors for help, using distributors’ capabilities to develop reliable products with a minimum of assembly time and tooling costs.
Startup customers also rely on distributors to recommend and supply parts that are both cost effective and readily available.
“Startups definitely look to us to leverage our technical capability,” an executive for a large global distributor recently told me. “They leverage our knowledge, our skill sets, and our partners to help them out.”
Some distributors have design centers that work with startups (and other established OEM customers as well) to take a design concept and turn it into a prototype. For instance, Arrow Electronics says it can produce a prototype or start up within five business days at its centers.