VIEWFROMTHE TOP
NavigatiNg a market shortage
Experts didn’t forecast a sudden uptick in demand. Buyers need to knowwhere they can find inventory – and security – in the supply chain By JimMagee, America II Electronics
America II Electronics' Jim Magee
A number of factors have led us to the currentmarket conditions, in which lead times extend to 24 – 40weeks.
In the years prior to 2009, componentmanufacturerswere
suffering fromexcess capacity. In reaction to that,many fabs that aged past their efficiency dateswere taken offline. In addition,many manufacturersmigrated to the large independent fabs in Asia. This migration,whichmade perfect sense at the time, exposed the componentmanufacturers to outside influences in their ability to meet future demand. No initial effectswere felt fromthese actions as the global economywas in a downward spiral and there appeared to be sufficient supply for the demand. However, thiswas not the case.
Industry experts did not forecast the rapid increase in demand that
occurred next. As demand increased, the larger OEMand EMS customers started to bookmost of the available capacity and left a good portion of the customer basewithout the product they required. Thus,we are nowfacedwith a shortage.
As an independent distributor, America II Electronics has an
advantage in this type ofmarket becausewe’re able to see the demand shift before others in the channel.With an integrated global IT network,we viewquote activity and have visibility to demand in real-time. Ourmain objective is tomonitor themarketplace and react quicklywith inventory buyswhen lead times start to stretch.
As a distributor, ifwe don’t have the necessary inventory,we add
little value to the channel. So inmany cases, America II purchases above currentmarket prices in order to offer immediate delivery versus a customer risking a production shutdown due to extended lead times. For over 20 years, our inventory-centricmodel has given globalOEMand EMS customers a vehicle to keep theirmanufacturing lines runningwith quality productwhen inventory becomes tight.
Butwhat about quality? Should an OEMsacrifice quality just to get
the product they need in a timelymanner? Quality should never be a side issue or something that’s sacrificed based on an immediate need for product. At America II Electronics, quality is ingrained in the company’s culture.Why should there be any difference in quality, or a customer’s expectation of quality, just because they procure from an independent distributor and not a franchised distributor? The
4 | June 2010
answer: there should not be a difference. America II was built around this concept.
Ensuring quality products starts at the very beginning of the
America II process via a strict vendor qualification policy. Based on our ISO vendormanagement system, America II Electronics currently hasmore than 1,700 suppliers. In addition, a large portion of the America II inventory consists of factory-fresh product,while another portion is customer-owned,which is consigned for asset recovery. All product is newand is carefully vetted through our quality system.
The components are inspectedwhen arriving at the America II
facilities and then again at final inspection prior to shipping. They go through several tests including visual inspectionswith high magnificationmicroscopes, solvency/marking permanency tests, as well as physical dimension tests. If at anytime a component does not pass any of these tests, or if a customer specifies additional testing, the product is forwarded to America II’s third-party in-house test partner, Premier Semiconductor Services, for additional testing. There, RoHS compliance testing, x-ray, de-capsulation, soderability, CCAP counterfeit testing and electrical tests are conducted to ensure only authentic high-quality products are being distributed.
Regardless ofmarket conditions, customers should feel certain that
the distributor they partnerwith has a robust quality systemand, more importantly, a secure supply chain. It’s the reason America II Electronics recently announced the America II Guarantee.While the industry standard is towarranty components for a single year, America II Electronics guarantees parts for a period of 10 years. Initiatives like this allowcustomers to buywith confidence and secure the product thatmeets their quality needs.
JimMagee is president of St. Petersburg, Fla.-based America II Electronics Corp.
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Seewww.americaii.comfor details on the America II Guarantee
www.electronics-sourcing.com
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