FEAT RE FEA ATURE


D


DIISTRIIB


BUTIION O N


IOT DEVICES PRESENT UNIQU E SOURCING CHALLENGE S


and EMEAOperati ns at America II investi ates the rol of the distributer i


The Intern and EMEA


Internet of thn thiings (Io ) h s im EA O erations atAmerica II


(IoT) has impacte ve


every i dustry PA


who canprice themselves according to the needs of this ‘midtier’ is a challenge companies strugglewith. Anot


gemany other fe ft feature


oftensimplysensorsorother low sophisticateddev ‘latestandgre suchthere


reatest’ inpro


cheaper, low ge re


geometries. Infact,give require


romtheopenmarke rt re rementsof IoT ev evices thatdonot require owe


reof IoTdevices is that theyare ow-end, less re


ev rethe


remaybeacasefor sourcingtheolder, ower-marginpartsonlow ventherelative re


rocessingtechnology rc


werpro velylow


whatwouldactuallybere


ket. Inthis case, it’s like require


ket capabilities. oc


rocess ow


alsoanargument for sourcingobsoleteparts fro


rt kely


fairlyuniqueblendofaccess tofranchiselines, alongsideopenmarke


redwouldbea ra


KEEPINGHERIGH BALA ACROSS HE SUPPL


KEEPING HE RIGHTBALANCE RIGHALANCERIGHT AC


Turning to look againat the fact that the maj


CROSSTHESUPPLY CHAINLYCHAIN ajority of IoTcustomers are


ge


orbes predicts that by2025 approximately 80billiondeviceswill be connectedto the Internet (comparedto the 11 billiondev connectedtoday). Furt


F evices thatmore thanhalf ofmaj


processes andsystemswill incorporate some element of the IoTby2020andalso that by 2018, sixbillion‘things’willhave the ability to autonomously re Withsuchstro


ve


request support via the IoT. rongpre


The IoT, andwiththe explosionof the IoT devicemarke


ket already appare


However designing andsourcing for devices intendedto serve the re Internet ofThings pre ord


designing IoTdev ow


rv require rder to alignwiththe sourc rements of the


of IoTdesigns, distributorshave topresent a fairlyunusual blendof skills. Firstly, it’swort


resents aunique case. In rcing require re


rthconsidering the type and


size of company that commonly turns itshan d to IoTdesigns.Whilenot exc


xclusively the case,


‘mid-sized’ and‘mid-tier’ companies (interms of bothsize andre ov rwove


verwhelmingly re re resente


revenue) appear tobe representedinthepool of


companies designing IoTdevices. Yet it is exactly these companies that are thewors repre


re tedbycurre 10 10 SEP EMBER 201 rentdistributionmod SEPTEMBER 2016 | ELEC RO ELECTRONICS CS odels. rst- rements rent, it’s


unsurprising that somany companies are curre


re


rently committing considerable resourc evices.


re rce to redictions for the future of re


rthermore,Gartner claims ajornewbusiness ra


bigge rt


Ask anymid-sizedcompanywhat their gest issues are


rewiththeir distribution partner andyo you’ll likely ge


the same answer; ‘they’re don’t give


don’thave capabili veus the ti


This is amaj get some variationon


me of day, or too small and re either tier one and


ties our business re companies inthe IoTspace.


Tier one distributorshave ahabit of frequently ov


ove verlooking everyt ything


volume business fromlarger OEMs/ODMs. It’shardto ge you’re attempting to


ge rd look-inif yo


place a smallerHighMix Low ft


case for IoTdevice Volume order (as i


for low require


s so oftenthe ow


rements)


ow-margincomponents. Onthe flipside, smaller and


independent distributors,whichm well care


customers,may ge resourc


rces or stock


re toprioritisemid-sized genera


access to ensure rallynothav


r


e e


or reliability that their IoTcustomerneeds. It’s clear that, as a company sourc for anIoTdesign, yo a ro


serve


rock andahard rv


I T u i rcingparts rt


you’re oftencaught between rdplace, andwill usuallynot be


vedwell by eithermodel. Finding someone America II www.americaii.com www.americaii.com E: sales@americaii.com / ELECTRONICS ELECTRONICS o so rcng. get a


largest orders.Their businessmod shareholder priorities dictate that t ones favourhighmargin,high ro


“Smaller “Sm er and independent


customers,may generally not have the resources or stock access to ensure the volume or reliability th


customers,


distributors, which may well care to prioritisem d-sized ly


and i dependent wh


may a we


care to prioritise mid-sized ay


y generally not have


the resources or stock access to ensure the volum or reliability that their IoT customer needs...


their IoT customer needs. ”


ty require ajor issue for thesemid-tier res.’ Figure 1: Figure 1:


More than half of major new business processes and systems will incorporate some element of the IoT by 2020


More than half of maj


ajor new business


processes and systems will incorporate some element of the IoT by 2020


companies Holding excess stock simply isn’t anoptionfor companies of this size due to the capital losses invo


rticularly import .


independents tohelpthemmanage gain, there bepart of the sourc genera


volved.Oftenthey’ll turnto ge the


process ofholding andshifting excess stock. Aga


So, typically, this is the choice that IoT designers ge


satisfy this ‘meltingpot’ of apparently ng require


p s


e t


h


le su ourci


rally face inattempting to re


ppliers, (eachfulfilling a rements; either


e element of the sourc o


m r


thre ema


rcing


), or else attempt to turnto of the fewdistributors in rke


ket that cansatisfy reliable long-term


ra


o n s


u


arke requirements, at the ght price andpriority,while o offering inventory age


anchise supply andopen t re


ve thre ry


well- tors


me value-addedservices to respeccing andre are


gement (andpotentially va


rv redesign ).


alignedto theneeds of ewandfar


re few


re canbe seena clear case for this to rcingmix for IoTcompanies.


re ‘midsized’


companies, another factor that begs to enter themix is inventorymanagement; something that is part


rtant for these types of


oTdevices, thereis sometimes rc


gy.As re


IOT DEVICES PRESENT UNIQUE SOURCING CHALLENGES


cted almost evst everyvery industry.Here Jed Pecchol Pres ent APA C vestigates the role of the distributer in designing IoT evdevices


ry. Here Jed Pecchiioli, Presiident,, APAC designi g I T devices


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