Independent Distribution


last year. In 2010, Rand increased revenue 30 percent, she said.


Optimistic customers


independents. It could help themease the fears of OEMs concerning counterfeit or substandard parts. It’s no secret independent distributors are often blamed for introducing counterfeit components into the electronics supply chain.


"OEMS are communicating with each othermore. Purchasing and quality people are asking their colleagues at other OEMs who do you use for independent distributors," said Carleton Dufoe, vice president of trade for Fusion


"This year there is a funny market dynamic occurring," said Klein. "There are optimistic customers who expect business will be strong and conservative suppliers, who are not sure business will be robust and are cautious about adding capacity."


"This could blow up in the second half of the


year," said Klein. "I think we will have a big second half and I think it will surprise everyone and there will bemore shortages," she added.


Klein said one reason the second half will be


strong and shortages are likely is because new tablet computers will hit themarket. She noted that about 35 new tablets were introduced at the Consumer Electronics Show (CES) in January.


"A lot of buyers have been burnedwith counterfeit parts and they don'twant to get burned again, said Paul Romano, chief operating officer at Fusion Trade


Authorized distributors and


the Electronics Component Industry Association (ECIA), formerly the National Electronics Distributors Association, said OEMs and electronicsmanufacturing services (EMS) providers should only buy parts fromcomponent manufacturers or authorized distributors. It is the only way to guarantee that counterfeit parts don't get into the supply chain, they say.


However, the Independent


Distributors of Electronics Association (IDEA) said there are many reputable, reliable


In addition, there is greater need formore broadband capacity


and telecommunications carriers will need to putmore communications infrastructure in place, which will drive component demand.


"I ambullish about 2011," said Klein "The second half looks


good and there will be solid growth for the year." She added, that longer term, there will be more opportunity


for Rand and other distributors to grow business by partnering with OEMs and becoming more integral to them. She noted that many OEMs have downsized to the point where they lack critical capabilities, including sourcing. This can be an opportunity for independent distributors that have the right services, said Klein.


For instance, an OEMmay have a sourcing issue with a part and


its engineering departmentmay try to find cross reference parts to find an alternative. An engineermay find a suitable part, but the partmay not be readily available or produced in necessary quantities.


"What good is a cross if there is no product behind it?" she asked. So the OEMmay partner with a company that has the


"engineering expertise, sourcing capability and sophisticated software that can provide information on crosses and upgrades," said Klein.


She said Rand will be a partner tomore OEMs in the future and


provide such services. Besides helping independent distributors winmore business,


partnering with OEMsmay have another benefit for 36 |March 2011


independent distributors that have rigorous quality, screening and component inspection processes in place to prevent counterfeit and substandard parts from getting into the supply chain.While there are some unscrupulous component brokers who knowingly sell counterfeit or substandard parts, it is unfair to paint all independent distributors with the same broad brush, says IDEA.


Debra Eggeman, general manager of IDEA based in Buena


Vista, Calif., said IDEA's 35 members recognize that counterfeit parts continue to be an issue for the industry. She said IDEA has developed its 1010 standard for inspection of parts and members have adopted those standards.Many members have also invested in test equipment to determine if a part is genuine, counterfeit or substandard.


She saidmany OEMs and EMS providers will require an


independent distributor to be amember of IDEA and to use the 1010 inspection standard and pass IDEA's ICE-3000 parts inspection test.


Buying fromreputable independent distributors, of course, is a


major concern for buyers at OEMs and EMS providers. During last year's shortage,many buyers fromdifferent companies communicated with each other about which independent distributors were reliable and performed well.


"That was unique," said Dufoe. "OEMS are communicating with


each othermore. Purchasing and quality people are asking their colleagues at other OEMs who do you use for independent distributors," he said.


Romano said communication among OEMs is part of a trend to "vet their vendor base" and improve the level of their


www.electronics-sourcing.com


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