Feature: Components


full functionality. Tis is where having an independent distribution plan comes into play. “If you are a manufacturer you need to


have as part of your supply chain strategy an independent distribution plan,” says Tomas. “How are we going to engage? We don’t want to give a broker business and take it away from the franchisor/authorised distributors. But right now, we are the guys that can be strategic and can get parts that work when you need them at a competitive price.”


Classic Components’s sourcing expertise


includes knowing where to find alternative sources of component parts through surplus inventory, strategic relationships with other franchise/authorised distributors and relying on local as well as overseas markets.


Investigating sources One mistake some companies make during a chip shortage is being duped by counterfeit products. It is an easy trap to fall into because the counterfeit items available today are impeccably made and almost impossible to distinguish from the real thing. Tomas describes the situation like this:


your company needs a part, but none of your trusted sources have it in stock for at least 52 weeks. What do you do? Most turn to the Internet and search for a distributor who might have the needed chips in stock. However, it is easy to set up a website and pretend to have stock that doesn’t exist. With chip prices skyrocketing there is serious financial motivation to produce counterfeits. “What happens when the online search


produces a list of company names you have never heard of, how do you know which are legitimate and which are not?” asks Tomas. Classic Components retains its competitive


edge by taking a thorough look into any company it wishes to purchase from to ensure that both the company and its offerings are legitimate. “We know all the players overseas. We have


conducted rigorous audits and met many of the owners. We know which companies are legit and which should not be called. Tat is what we do,” says Tomas. While it might be tempting to purchase a chip from a company you have never heard


of that says they have them in stock, Tomas advises caution: “If they say: ‘Sorry, there just aren’t any of these chips available’ and you have an unknown entity telling you they have the parts, it would be wise to be cautious.” An independent distributor can also


offer supply chain management along with a rigorous quality inspection process to ensure the authenticity and quality of each component received. Classic Components, for example, uses a quality management system and holds certifications such as AS9120B, a requirement for distributors serving the aviation, space and defence industries. Te due diligence process includes


conducting a detailed risk profile and evaluation of the vendor, the part and its end use. In addition, the customer is surveyed as to the requirements for age of the components (date codes), traceability back to the factory, and more. Classic Components has a scoring system to establish the risk involved in each transaction. “Te process of authentication is much


more extensive for higher risk items to ensure the chips are legitimate and high quality. Tere are a lot of steps, and it is very expensive and time-consuming, but it’s critical when the product is a pacemaker, for example,” says Tomas. Unfortunately, for the foreseeable future,


the automotive industry is expected to continue to experience significant supply chain disruptions. New technology for cars will also further increase the demand for chips, particularly in electric vehicles and interconnected cars.


“Just as it did in 2018, the current chip


shortage really reinforces the legitimacy of the independent channel,” says Tomas. “In some cases we are literally helping to keep automotive manufacturers’ production lines running.” Classic Components isn’t thinking only


in terms of the immediate future, either. Given the environment, some independent distributors have stopped stocking inventory and are demanding prepayment for components with rigid “no cancellation and no return” policies. “We are not just here to sell a box of


parts and take the money and run. We still stock components and maintain flexibility in our [financial] terms. We are here for the long haul, so we want to maintain our relationships with our customers well beyond the current shortage,” says Tomas. “When things start to return to normal, and companies need to make decisions to reduce their independent distribution supply base, they are going to remember the ones who brought consistent quality and flexibility and helped them weather the storm.”


Sourcing components Independent distributors are also stepping in to assist manufacturers aſter several years of market volatility, by finding buyers for surplus inventory, offering creative financial solutions to preserve cash outlay, and identifying ways to reduce component costs. Luckily, the market is finally beginning to


stabilise. But, although the dust is settling, the work has only begun. With hard- earned lessons from the pandemic, many manufacturers are looking to secure their supply chain and prepare for the inevitable


www.electronicsworld.co.uk November 2023 45


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