Outlook 2016: What’s in a name?

It must be tempting to believe that distributors are all pretty similar. I have said on record that we are all in the logistics business; it’s just that we sell electronic components, rather than groceries. But, just as different retail outlets have emerged to satisfy different types of customer, so distribution companies have evolved in a number of different directions to address the very different challenges posed by all types of consumers of electronic components.

Of course, each company tries to define its space with a new name for what it does. Volume, niche/specialist, broadliner, catalogue, e-tailer, production, NPI, hybrid are just a few of the names that get bandied around and it’s useful to break that down a little to see which of the tags applies.

* Broadliner. Simple but vague. Usually means a company that offers a wide range of parts from a large number of manufacturers.

* Niche. Focuses on a technology or market sector

* Volume/Production. Interested in supplying parts in large quantities to fulfill production runs

* Catalogue/High Service. Whle the term ‘catalogue’ has gone out of favour since the dominance of the internet, most people still understand it defining distributors who supply small volumes of parts quickly from a massive inventory. High Service is another name that some ‘catalogue’ distributors prefer, or at least they are called that by many in search of a common category.

Do the differences matter?

So far so good, but does this really matter? The answer in a nutshell is ‘yes’. Absolutely it does, for three main reasons – inventory, logistics and content.

The big broadline volume distributors are geared up to service customers as they move into the production phase. Sampling for them – if they do it at all – is a loss leading exercise; they are structured to support scheduled orders, sometimes stretching out a year or more into the future. They will set aside large component inventories against an order, buying in advance to avoid shortages and the dreaded ‘A’ word (allocation!). They have sophisticated supply chain procedures in place to ensure that parts get to the customer as they need them on the production line.

This is a perfect service for a buyer who has to keep a production line running optimally. However, it often means that the stock held by such companies is largely committed to a customer and not freely available for anyone to buy.Another concern is that such inventories are likely to include a large number of older generation parts. This is because the design process will have taken place up to three years previously and since the design became ‘fixed’, new parts will have been introduced.

So, the distributor set up to address the needs of the production buyer is unlikely to have available from stock the parts that designers need to differentiate their latest designs. Neither will such a company want to sell small numbers of parts necessary for developing and prototyping – most will have minimum order quantities that are much greater than the requirement.

Enter Catalogue/High Service distributors. There are really four major worldwide players in this market – Mouser and three competitors you surely know (if not, look in the pages of New Electronics where you’ll come across them very quickly!) We are all set up to supply small volumes of parts very quickly from freely available stock – but even here, there isn’t one single model.

Two of the ‘Big Four’ are heavily committed to the Maintenance, Repair and Obsolescence (MRO) market. That’s great for them; it is a very profitable sector. In addition to a varied component portfolio, they also sell products such as step ladders, safety helmets and footwear. Again, all items which, compared to a single resistor or connector, or even a semiconductor, can be high price items which help to drive revenue. Fine, if that’s what you need, but of limited value if you are looking for the latest processor on which to base your new design – chances are, they may not have even added it to their catalogue yet.

We also see competitors in this sector moving into the volume side of the business. It’s a large, tempting but depressingly low margin pot, but at Mouser, we do not believe that you can be all things to all men.

Adding a new term

Which is why we have added a new term to the lexicon of distribution types: Mouser is the NPI distributor.

‘New Product Introduction’ distributor really is the best description for Mouser. New products are our speciality; we examine our suppliers’ new products to support design engineers so that they really are using the very latest products in their application. Our job is to reconcile both the requirements of our suppliers and those of the customers. This is the model on which we have focused and which we have developed continuously since 2002.

Our customers are engineers at the ‘bleeding edge’ of design: they want – no, they need – the absolutely latest generation of high performance, high functionality semiconductors which they can use in innovative ways to give their final equipment the competitive edge.

They also need all the other pieces of the design ecosystem – the development boards, the reference designs, the operating systems, modules, system-on-modules, integrated board-level sub-systems … plus connectors, passives and all the other parts that are necessary to complete the design.

And they need specialised content – bang up to the minute technical design-in information, design ideas, selector guides, comparison charts.

This is the space we occupy. Mouser works in partnership with its parent company TTI, the leading volume and production distributor, so that customers have a seamless supply chain. But it remains committed to serving the needs of design engineers, stocking manufacturers’ most-recently released parts and delivering them anywhere in Europe – usually within two days and with no MOQs. We’ll ship you one resistor if you like – we do so regularly.

Along the way, we have added other services, such as MultiSIM BLUE, the PCB design integration tool designed in collaboration with National Instruments. Using the Berkeley SPICE engine and featuring a preloaded library of more than 100,000 frequently used components from multiple Mouser databases, MultiSIM BLUE facilitates real time BOM price quotes, and component database updates enhance the creative design engineering efficiency.

The design tool, which supports pre-layout design convergence analysis and mixed-signal simulation, can handle components as complex as BGAs with more than 1000 pins on pitches as small as 0.8mm. MultiSIM BLUE also provides a 3D visualisation of the PCB, with no limits on its shape and size, thereby enabling innovative, forward-looking design.

Shortly, Mouser will launch a new version of the software. MultiSIM BLUE Premium will offer unlimited components within the schematic and integrated design capabilities to provide engineers with a simulation environment using Mouser’s vast selection of products and an increased selection of NI components, including the latest analogue and mixed-signal ICs, passive devices, discrete semiconductors, power management ICs, connectors and electromechanical parts.

So there you are – names may not matter, but what a company offers does. Mouser has great respect for others in the distribution space in general and the Catalogue space in particular. They have their strengths and so do we: ours is called New Product Introduction. Our suppliers know what we do and that we are different – filling the void which other companies choose not to focus on.