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ELECTRICAL & ELECTRONIC COMPONENTS SOURCE ELECTRONIC CHIPS When manufacturers need quality electronic chips
but cannot easily acquire them or risk substandard electronic components, working with an independent distributor that will fully mitigate the risk is a safe and cost-effective option
But when sourcing electronic parts that are no longer available from authorised distributors, are obsolete, out-of-production, or only available from overseas sources, there can be risks. Most manufacturers rely almost exclusively on chips sourced from authorised distributors and so are unprepared when these components need to be purchased on the open market. Mike Thomas, president and global general manager at Classic Components, a premier independent distributor, commented: “I have heard of suppliers disappearing after the manufacturer wires over the money (without delivering the parts), and some purchase bad parts they ultimately cannot use.” Manufacturers who prioritise risk management
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can greatly benefit from collaborating with an independent distributor. By doing so, they can safeguard their production and reputation through the acquisition of dependable supplies of high-quality chips.
SAFEGUARDING MANUFACTURERS Experienced independent distributors can utilise their expertise and long-standing strategic relationships to explore alternative sources – such as regional authorised/ franchised distributors, direct connections with manufacturers, or access to surplus/excess inventories from other customers. “Experienced independent distributors play a crucial role in safeguarding manufacturers from the inherent risks associated with buying electronic chips on the open market. By acting as a buffer, these distributors help reduce the burden and potential liabilities that manufacturers may face when making these critical purchases,” explained Thomas. The initial step involves conducting a
comprehensive survey with the manufacturer to gain a thorough comprehension of their unique specifications, which include chip age and the ability to trace it back to the factory. Subsequently, all potential suppliers undergo meticulous assessment. Should any red flags or other concerns emerge
throughout this process, the independent distributor reserves the right to elevate the level of scrutiny to even greater heights. “A professional (independent distributor) has
irtually all sophisticated equipment today – from automobiles and medical equipment to smartphones – will feature electronic chips.
the resources and experience to assess the risk and evaluate the sources. Depending on the level of risk, they can take different mitigating actions, particularly when hard-to-get, older, or obsolete parts are required,” added Thomas.
PROTECTION FROM RISKS Over decades, independent distributors have developed a very sophisticated method of identifying and eliminating risk. Independent distributors such as Classic Components make substantial investments in managing global supply networks, evaluating and prioritising suppliers, establishing preferred supplier relationships, implementing efficient Quality Management Systems (QMS), and procuring state-of-the-art inspection equipment. The process begins with vendor qualification and management to ensure the independent distributor is collaborating solely with a reliable and approved supplier. A tiered Supplier Selection and Approval System is used to assess vendors against rigorous standards. Each supplier is categorised, thoroughly documented, regularly reviewed, and subject to tier-reclassification based on events and patterns observed by Classic Components or reported by third-party sources. These sources include instances of supplier
non-conformance to product reliability and integrity, changes in quality status relative to industry standards, industry reports regarding overall vendor quality, alterations in financial conditions such as outstanding payments or accounting issues, shipping of substandard products, or repeated occurrences of product quality issues. In response to any of these factors, indefinite suspension may be imposed. “Internally, our vendors are evaluated
and assigned a grade and ranking using an alphanumeric system, which depends on their distributor type. This encompasses original chip manufacturers (OCMs), authorised distributors, along with other traders and alternative sources,” explained Thomas. When a manufacturer requests a part, an agent asks a series of questions and completes a flow-down risk profile form developed by the company. These questions determine the intended application of the chip, manufacturing date restrictions (day code), and material traceability requirements, which include proof of direct sourcing from the factory. The systematic evaluation conducted by Classic
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Components identifies any concerns linked to specific parts, commodities, brands or vendors. The company also adheres to established international quality standards such as IPC, ISO, JEDEC, AS, and others, when selecting and managing its suppliers. At this point, the independent distributor’s
buyers will begin sourcing from vendors ranked by reputation and will negotiate the terms.
INSPECTION & VERIFICATION Classic Components also takes advantage of its regional relationships across the globe. Compliance verification, which includes visual inspection, testing and physical analysis of parts, serves as an additional layer of protection. As part of routine quality checkpoints,
technicians conduct inspections of external packaging (examining original and sealed packaging, correct labeling, etc.); and examine the internal packaging for various authenticating elements such as logos, labels, bar codes, etc. In addition, the chip is scrutinised for physical
arrangement in packaging, surface-mount packaging damage, pin orientation, coplanarity, surface scratches, cut or bent leads, lead blemishes, discolouration, rust, tarnish, evidence of remarking, lot codes and country of origin, as well as evidence of sandblasting or blacktopping. For products like medical devices, however,
other costly and time-consuming steps are taken, but these are crucial in ensuring the safety and effectiveness of the final product. Upon completion of the process, Classic Components offers a comprehensive five-year warranty and flexible net terms for payment, which are not due until the manufacturer receives and assembles the parts. Furthermore, the distributor provides substantial insurance coverage for the chips, including $10 million for general liability to cover costs related to physical injury or property damage; $5 million for technology errors and omissions to address expenses arising from sub-standard material issues; and $5 million for employee crime and dishonesty to cover costs due to part failures resulting from employee misrepresentation, forgery, fraud or counterfeits.
Classic Components Corp.
www.class-ic.com
HOW TO CONFIDENTLY
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