Trend
Digitising the electronics supply chain with design cycle intelligence
By Steve Flagg, CEO, SupplyFrame O
EMs and electronic component suppliers nowadays either provide or enable devices that are digitally connected,
yet they themselves are far from being digitally networked. Theirs is a stance surprisingly old school, largely relying on personal relationships with engineers and long-standing customers. Insights into the customer’s design cycle are gained through direct conversations with sales departments, designers and engineers who need certain components. However, the pandemic has brought
to the fore the importance of digital transformation, which includes the electronics industry, where old- fashioned processes are no longer optimal. Direct contact with customers significantly decreased during the pandemic due to lockdowns and cancellations of trade shows, and digital communications became the only means of communication and connectivity. As McKinsey & Company recently noted: “Covid-19 accelerated the shift to digital. But the best companies are going further, by enhancing and expanding their digital channels. They’re successfully using advanced analytics to combine new sources of data with their own insights to make better and faster decisions and strengthen their links to customers”. Indeed, digital transformation is no
longer a buzzword but a fundamental process for suppliers in the industry.
The product development cycle Engineers and designers receive information about current products through internet research, newsletters, online forums and social media, all without engaging directly with
suppliers. Today, the two sides can connect through technology; by posting real-time information about active manufacturer development cycles and surveying purchase intentions in the electronics industry, vendors’ teams can get an overview of the projects manufacturers are working on, enabling them to contact potential customers at an early stage. If suppliers interact with designers and
engineers during the search process, they can evaluate and influence the design of the product early on. This means they can propose alternative products or ideas based on comprehensive market and risk analyses, and tailor their offerings to the customer.
engaged with, in order to be involved from a procurement standpoint in the design from the earliest stage. Of course, larger customers will
always be important and should still be treated as such, but suppliers should reconsider the 80-20 rule. They need to make customer loyalty meaningful and realign their sales strategies to focus on those with the greatest potential, not just those with the strongest current sales. Data analytics can unleash information about what potential customers are working on, providing concrete and vital information to help suppliers build their sales strategies.
Suppliers need to accept that their traditional marketing methods are no longer effective, and that they must invest in online solutions to be successful
Niche products Sales teams typically trade according to the 80-20 rule; i.e., they estimate that 80% of their revenue comes from 20% of their customers, and, as a result, customers who design niche products tend to be less of a priority. Yet, niche products from high-tech
startups have huge growth potential and should therefore not be overlooked by suppliers, but rather monitored and
04 September 2021
www.electronicsworld.co.uk
A key role Suppliers need to accept that their traditional methods are no longer effective, and that they must invest in online solutions to make their processes more efficient and successful. They need to equip their websites with new solutions so designers can quickly find components and use advanced analysis techniques, real-time information on active development cycles and purchasing intentions in the electronics industry, to keep track of the entire product development cycle. Tis way, sales and marketing teams get an overview of the projects that manufacturers are working on, and can reach and acquire potential customers at an early stage. It also gives suppliers the opportunity to work on products that have the greatest potential. By taking these steps, suppliers can play a key role in enabling new products to be more efficiently developed, procured and promoted across the electronics value chain. Moreover, they can also help the wider electronics industry to evolve and become as digitally connected as the products it develops.
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