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May 2024 – Procurement Strategies for Electronic Components

The increasing importance of procurement strategies amongst distributors within the automotive industry

Procurement Ssrategies for electronic components

The projected annual growth rate of electronic components is expected to increase by seven percent between 2020 and 2030 due to the latest automotive trends such as; electro mobility, autonomous driving, digitalisation, connectivity and new mobility concepts.

The forecasted growth rate means that OEMs and suppliers have to plan with an increasing number of variants, resulting in the demand for many more components. Vehicles and components will have much quicker development times and shorter product lifecycles so buyers must adapt quickly to the product itself and understand production capacities. The anticipated demand could cause problematic for various electronic components leading to a shift in the relationship between customers and distributors.

Distributor Procurement Strategies

Traditionally a lot of high-volume business in the automotive industry has been direct business between manufacturers and OEMs and EMS providers. However, the distributors role is changing and in times when component allocation is at its maximum capacity and lead times are significantly increasing, it’s imperative for buyers to maintain close relationships with distributors.

When buyers and procurement specialists explore buying options they consider component availability, different packaging quantities and alternative packaging sizes. They can also explore components with wider specifications and higher tolerances, which whilst being a suitable alternative, might cost more. Buyers can also explore higher quality grades, temperature ranges and even alternative supplier products that deviate from the OEM.

Most distributors offer tools that match components via their in-house search engines and in addition to finding alternative options, distributors offer extensive support and assistance throughout the component sourcing process.

In order to minimise risks, buyers and distributors could partner together to highlight a second source during the design phase, which will add flexibility and a contingency, should products obsolescence affect the design or end application later down the line. Components such as resistors, capacitors, discrete semiconductors and integrated circuits can be replaced with similar package variations.

One of the main advantages of partnering with a distributor on short and long term procurement strategies is that in a very crowded and competitive market they know the market and products exceptionally well, including the latest developments and can provide an overview of available technologies, reduce response times and act as a consultant and service provider during the development phase of a product.

Today it’s important that distributors are recognised as long-term partners rather than just separate entities, they can provide a wealth of expertise and market insight through their partnerships, extensive product and OEM knowledge.

GD Rectifiers offers a unique offering to the power electronics industry; as one of the UK’s leading independent distributors of power electronic components, the company also boasts an extensive manufacturing facility to design and develop heatsinks, power assemblies, obsolete semiconductors, rectifiers, selenium suppressors and regulators.

 

For further information on procurement strategies and how GD Rectifiers could help you source the components you need, please call our team on: 01444 243 452 or email: enquiries@gdrectifiers.co.uk.

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