Distribution


Medical and wearable components - a sourcing conundrum


Jed Pecchioli, president of APAC and EMEA operations, America II, finds out why the sourcing requirements of wearables and medical devices require a very particular model of distribution


Ultimately, this is a meeting of worlds. Jed Pecchioli S


ometimes it feels hard to keep up with what’s meant to be the ‘next big thing’ in electronics. For a while all


you heard about was the IoT, then it was 3D printing and there’s now a real head of steam building behind robotics too. However, one area that has commanded a lot of attention over the past few years in particular is wearable medical electronics. In fact, a recent industry report stated that the medical device industry is now ‘one of the biggest industries in healthcare, driven by innovation and new technologies’.


With its close proximity to the body, it makes sense to use fashion items such as smart watches and other wearables to record, monitor and communicate physiological data. As the cost of electronics decreases and we are able to fit ever more powerful computers into tiny form factors, it also makes sense that medical professionals and medical bodies would advocate the use of medical smart monitors to optimise medical outcomes, improve health and monitor patients remotely. As a result of a drastic upswing in wearable medical designs, IndustryARC anticipates the market for wearable medical electronics will hit $41.3bn by 2020. Designers and manufacturers of most health and fitness devices are not yet required to hold medical-grade FDA approval, which greatly increases the number of suppliers and distributors whom they can work with. This ‘accessibility’ is one of the main drivers behind the recent boom in these ‘low risk’, non-critical types of health and fitness devices. Growth of this sector is also likely to


result in a surge in demand for particular types of components, which in my opinion will include low-power accelerometers, smart sensors, NFC semiconductors, wireless transceivers and signal boosters – particularly as they become more affordable and smaller in size.


Nevertheless, designers need to consider a number of factors when making a decision on their distribution partner. Given the vast range of components that health and medical devices can demand, perhaps one of the most important requirements from a cost and time perspective is the ability to source all components from a single distributor. Of course, there are already a number of well-known, tier-one distributors battling for a share of the medical market. Many of these service large consumer-level production cycles, guaranteeing the distributors the large- scale, profitable business they are after. However, if the mid-tiers filter their potential distribution partners within this context, the choice suddenly becomes much more limited. The majority of tier-one distributors are simply not interested in the High Mix Low Volume (HMLV) requirements of the mid-tiers, and even those that do cater for them still treat them as second priority to their larger customers. Furthermore, mid-sized companies are also likely to require additional consultancy to re-spec their designs in order to maintain their desired power and device size. However, physical design parameters are tight and as such, the need to re-spec individual components can cause complex design issues. Moreover, such designs are typically quite cost-sensitive too and therefore, any re-design must be achieved within constrained budgets and often delivered in fairly short timescales. Tier-one distributors do not generally


offer this level of individual consultancy or provide the additional value-add services that mid-tier companies would benefit from, such as in-house design


42 September 2016 Components in Electronics


capabilities. As far as I’ve seen, this service doesn’t typically exist elsewhere either. The fact of the matter is that often the mid-tiers simply do not have the bandwidth within their teams to manage the entire design process from start to finish. Over recent years, I’ve noticed a steady increase in the number of customers demanding these additional services and therefore from a customer satisfaction standpoint, it seems like the natural progression to make. Distributors need to expand their


offering beyond the delivery of electronic components and leverage their partners to deliver comprehensive, end-to-end solutions to their customers. For medical device designers, services such as engineering consultancy, custom design capabilities and failure analysis would be particularly useful and distributors should consider making this readily available. There is no doubt that the medical and health devices market presents a huge opportunity for designers, but competition remains fierce. Tier one distributors generally favour the high- volume, high-margin orders that their shareholders demand, which means that they are often not the right choice for the mid-tiers. However, by maintaining an open and collaborative relationship with a smaller distributor, you will receive the right level of support to get your designs to market quickly and cost- effectively and from my experience, finding a distribution partner with proven expertise and capabilities in the independent and franchise worlds is a good place to start.


www.americaii.com www.cieonline.co.uk


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52