How to Protect Yourself in Today’s Cut-throat Electronic Component Market

by thelatesteditionishereandfreetoview

ADVERTISE IN GLOBAL INDUSTRY FOCUS

Alessandro Nardo Owner of Electronic Partner SRL

Electronic components are now essential for the production of a very wide range of products. Independent distributors can be excellent allies for manufacturers of products with electronic components because they work hard to maintain lasting, trust-based relationships, both with their suppliers and with their customers.

Why is this so important? Current market reality. Exponentially growing demand for components makes them difficult to find (if they are not already obsolete due to their natural evolution). This shortage has triggered a wild expansion of the industry, especially in the parallel market (an area where the average independent distributor or broker operates), and it has resulted in the entry of many new players onto the market who, driven by the need for quick and easy profits, supply non-conforming –at best reconditioned, but often fake or counterfeit – components to desperate manufacturers. These new players try to win your business by offering you attractively priced, but often poor-quality, parts.

Choosing to work with a reputable and trustworthy independent distributor with proven experience and a good reputation – that you can confirm, for example, by contacting their regular customers directly – is the best way to avoid being scammed when buying products in such an inflated electronics market.

Even if you have an established screening procedure in your company, it is always wise to contact your hypothetical new supplier’s regular customers or references to confirm their experience. We know that this is not easy to do because it is our standard practice. As a distributor with 20 years of experience, Electronic Partner srl first determines whether the potential supplier has ever supplied non-compliant material and, if so, investigates how they handled the situation with the customer and whether refunds or reimbursements were granted.

Today, independent distributors are often accused of introducing counterfeit parts or poor-quality components into the electronics supply chain. Why is this? Customers end up with the fake parts that were originally sold by counterfeiters to unscrupulous or careless distributors or brokers who, in turn, resold them on to other independent distributors or brokers.

Fake or nonconforming parts can usually be detected by using a test house, or by inspecting them as they are mounted on a board. In the worst case, fake parts are only discovered when there is a problem with the final product, which may already be on the market – causing significant economic damage to the manufacturer and its reputation.

For this reason, a reliable independent distributor will typically use a test house (preferably an external one that performs unbiased and objective quality testing and inspection) to inspect random samples of parts before accepting potential suppliers’ offers.

The only way to completely guarantee the authenticity of components, according to electronics industry associations and several authorized distributors, is to purchase them directly from manufacturers or authorized distributors.

While we agree in principle, this is not always possible to do given the recent and ongoing changes in the global electronic component market, particularly for hard-to-find or obsolete items, or older models of components.

As a responsible independent distributor that seeks long-term win-win relationships with its customers, Electronic Partner srl knows that counterfeiting is a serious problem in the electronic component supply chain. For this reason, the company conducts rigorous internal and external screening, and testing procedures using completely unbiased external test houses whose only task is to identify non-conforming components (including production rejects or fakes). Electronic Partner also constantly monitors its network of suppliers to ensure that they always meet the quality standards demanded by the market.

What about an offer that seems too good to be true?

For those companies tempted to take advantage of stock you find on the open market (and not only there!), the real challenge is to determine if that stock has reliable origins or not.

One way to protect yourself, in this case, is to rely on a carefully chosen independent distributor (using the factors mentioned above). This will help you avoid unpleasant surprises.

Generally, when buying directly from suppliers around the world, you are also directly responsible for ensuring that the stock is genuine, compliant, and free of quality issues (refurbished goods, not original items, counterfeits, etc.).

This means taking the following steps:

• Verifying any reviews or references left by other customers;

• Analysing the photos provided, starting with the packaging;

• Examining the labels on the packaging and the pictures of the goods;

• Requesting test reports (preferably from an external test house) and analysing these.

All of this ties up a lot of your and your team’s valuable time and resources, which could have been dedicated to other activities, especially profit generation, adding further risk to your business. And all of these aspects are becoming more and more complicated to analyse: the world of counterfeiting has been evolving twice as fast as the market over the past two years.

Partnering with a carefully chosen independent distributor can free you of all of these onerous tasks, allowing you to concentrate on your core business.

If you have decided to try a new supplier of electronic components, it is advisable to carefully consider your payment options – particularly in the beginning when mutual familiarity is not yet fully developed. Avoiding losing money to someone who might disappear after meeting you for the first time must be your top priority!

Your best protection here is to complete payment only after receiving proven confirmation of material shipment and part quality. In this situation, a trustworthy independent distributor would be able to provide you with other options to realize and safeguard the achievement of your objectives.

If you are struggling to source hard-to-find or obsolete components that you can trust, or simply want to put us to the test to ensure you are getting the best deal available on your electronic components, contact us today at: info@electronicpartnersrl.com or visit www.electronicpartnersrl.com.

Have you discovered your favorite independent broker or distributor? Have they offered you the opportunity to contact their references? In your opinion are independent distributors and brokers the same thing?

“Located in rapidly growing Houston, Texas, PPSI Manufacturing has been a trusted Electronics Manufacturing Services (EMS) provider since 1986. PPSI is committed to providing high-quality electronics assemblies and world class service to a wide range of customers in high-reliability markets, such as energy, transportation, and industrial control. As part of our ongoing commitment to continuous quality improvement, PPSI has partnered with MIRTEC to incorporate their state-of-the-art 3D AOI technology into our SMT inspection processes. MIRTEC’s MV-3 OMNI 3D AOI system is easy to program and delivers optimal defect detection as well as critical in-process feedback. With this capability, PPSI is able to meet the most stringent customer quality requirements in a consistent and cost-effective manner.” –

Jerry J. Huang, CEO