Feature
sometimes it is networking capital, or suppliermanaged inventory requirements. Sometimes it is supply,” he said.
Linton added sometimes geography plays a part concerning
which distributor Flextronics uses because some distributors are stronger in one geography than others.
In some instances, Flextronics will do business with certain
distributors because the OEMcustomer has “preferred distribution partners” that they want Flextronics to work with.
The distributorsmay have field application engineers (FAEs)
that work with the OEMcustomer. “In some cases wemight have our own distribution partners that wemight be able offer as a solution to an OEMcustomer," said Linton.
Buying for shortages He said Flextronics also purchases parts fromindependent distributors. "Independents are sometimes valuable in those situations where you can't get supply fromtraditional distribution channels," said Linton. Most large OEMs purchase components fromindependent
distributors and authorized distributors when parts are in short supply. In fact, 2011 tsunami and earthquake in Japan and the flooding in Thailand in 2011 resulted in a shorttermboon for many distributors. The disasters shut down electronic component production, created shortages and sent buyers scrambling for parts.
Ron Clarke, vice president,worldwide production procurement
sourcing, IBMIntegrated Supply Chain, said following the natural catastrophes in Japan and Thailand, “IBMtemporarily increased purchases fromdistributors for a limited period immediately after the disasters to solution shortages,” said Clarke.
Clarke said there are some advantages doing business with
distributors. “Distributorsmay provide stocking services, and hold inventory that can be accessed on short notice. Distributors aremore flexible on small quantity buys,” said Clarke.
Manuel Fusco,manager of global procurement of electronics
components for Big Blue, said IBMwill also purchase parts from distributors if there is an unexpected upside in demand.
Fusco added that IBMusually buys fromauthorized
distributors rather than independent distributors or brokers. IBMpurchases fromArrow, Avnet, Future, TTI,Mouser and Digi Key among others.
“Fromour standpoint, the risks are less with franchised
distribution versus independent distributors,” said Fusco. “The only time we go to an independent distributor is in the case of emergency.”
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Using distributors more Some large electronics manufacturers are increasing their business with distributors and not just buying parts from themduring component shortages. “Distribution has always been part of our overall strategy,”
has never beenmore important,” said Michael Knight, senior vice president Americas for distributor TTI.
“Distribution’s role as a carrier of inventory
said Riccardo Castaldo, vice president of supply chain and interimchief procurement officer for EMS provider Celestica in
May/June 2013 | 39
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