Whether you're producing in-house or outsourcing to a Contract Electronics Manufacturer (CEM), you know how critical it is to have a reliable supply chain in place.
When purchasing electronic components, you or your CEM partner can choose from a variety of various supplier categories. There are advantages and disadvantages to dealing directly with an electronic manufacturer, as well as via brokers or an authorized electronic parts stocking distributor.
Contacting The Manufacturer Directly
Electronic device makers create, manufacture, and market their own products. They are in charge of bringing new technology to market and phaseing out existing goods as demand declines. Unfortunately, if OEMs are not advised of planned obsolescence in a timely manner or refuse to invest in a potential re-design, the latter can cause them pain.
Electronic producers typically sell their products in one of two ways: directly to the end customer (assuming sufficient spend levels) or through a network of authorized distributors. Dealing directly with the manufacturer is usually the best approach to purchase electronic devices as a buyer. However, as previously stated, this is not always viable unless your organization has a large volume of business to place.
Pros:
- The shortest supply route conceivable. Dealing directly with the source decreases the likelihood of supply chain component difficulties.
- Technical assistance and after-sales service are available directly from the manufacturer.
- Genuine and authentic parts. The parts you receive will be brand new and have been properly handled and kept.
- There is complete product traceability. The supply chain is short, and you know exactly where the parts came from since you have direct connection to the manufacturer.
Cons:
- Dealing directly often necessitates a large amount of spending in order to qualify as a customer.
- Larger authorized distributors may have priority over you during times of disruption if lead times run out or a part is put on allocation.
Authorized Resellers
One of the most typical supply paths for purchasing experts is to buy electronic components from authorized wholesalers. Electronic producers collaborate closely with authorized distributors, who then distribute their products to the rest of the market.
Manufacturers and distributors frequently have strict supply agreements that include parameters such as pricing, stock holding/levels, targets, region, and so on. Despite the fact that the supply chain is significantly longer, many of the advantages of purchasing through authorized distributors are the same as those of dealing directly with a manufacturer.
Pros:
- The OEM or CEM has more freedom because they can buy from a variety of authorized distributors rather than relying on a single source.
- Spending levels/expectations have been reduced. In line with the preceding, while licensed distributors may still require a minimum spend to start an account, it is typically significantly lower than what a manufacturer would expect.
- Complete product traceability all the way back to the source. Because distributors buy directly from the manufacturer, they have visibility all the way back to the source.
- Technical and after-sales assistance are available. Authorized distributors are increasingly giving added value to OEMs and CEMs, such as ‘lunch and learn' sessions, technical webinars, and demo days, in an effort to set themselves apart from the competitors, i.e. other approved distributors.
Cons:
- Manufacturers might revalidate their supply chain strategy to align with their business goals, which can result in franchise agreements being changed on short notice.
