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Some buyers prefer to use distributors even if their purchasing volumes are large enough to buy direct from component manufacturers By James Carbone

In the past many electronics purchasers bought parts from distributors because they did not have a choice. If buyers did not have large enough volumes to purchase directly from the manufacturer, they were told to purchase the parts from the component manufacturer’s authorized distributors.

Today more electronics buyers are

purchasing parts from distributors even if they have large enough volumes to buy directly from the manufacturer. In some cases this is because chipmakers and other component manufacturers are operating leaner and have reduced their direct sales forces. But in other cases buyers are choosing to purchase from distributors because distributors provide flexibility and help reduce total cost of ownership through value‐added, supply chain, inventory management and design services.

As a result in recent years distribution

has become more strategic to purchasers and their companies, especially those in the electronics manufacturing services (EMS) industry.

“Our distribution partners play a very

key role in our business overall,” said Troy Hiner, vice president of global

28 July/August 2014

“Our distribution partners play a very key role in our business overall,” said Troy Hiner, vice president of global supply management at EMS provider Sanmina.

supply management at EMS provider Sanmina, based in San Jose, Calif.

He said that Sanmina is purchasing

more materials as a percentage of its spend from "our preferred distribution partners every year. Over the last 10 years we’ve reduced the number of distributors, but we’ve increased the amount of spend with those that remain,” he said.

Hiner said in most cases Sanmina does

not have to purchase through distribution because it buys large volumes of components. However he

says, "distribution allows us to consolidate and leverage spend, and position material supply so we can increase flexibility for our customers. Distribution is an excellent fit for Sanmina," he said.

Hiner added that Sanmina tries to

differentiate itself with customers through world‐class service and support, and “properly utilizing our distribution partners and their services helps in this effort.”

He said by forging close partnerships

with preferred suppliers, Sanmina can maximize flexibility and services to its OEM customers.

“Our ability to take care of our

customer’s needs depends in large part on our partnerships within our supply chain channel," he said. Such partnerships “are a foundational part of our supply chain strategy.”

“The more business you channel

through your preferred suppliers, the more aggressively you can drive your pricing, and the more services and support you can provide to your customer, “said Hiner.


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