Distributions compete on engineering services

Electronic component distributors are developing a wide range of new services to support design engineers. While price competition is always a factor, distributors are also competing with programs and services. Emerging services include enriched Web-based component data, developments in design software, engineering support online, help with environmental compliance and collaborative forecasting.

As manufacturers shift production around the globe, some find that the component pricing they received in North America is not the same in Asia. Distributors are pushing for global standard prices to eliminate this problem. “Global pricing has been discussed, and a few manufacturers have been willing to offer it because they realize it's not desirable to have different pricing in different geographies,” says Robin Gray, EVP of the National Electronic Distributors Association in Alpharetta, GA. Gray believes global standard pricing will increase.

Another trend is the increased efforts distributors are making to support the transition to environmentally compliant components. RoHS was just the beginning. The next major green trend will likely be toward more efficient energy use. “The green revolution is going to impact the design, production and sale of electronic components,” says Gray. “A big push now is for more energy efficiency, so efficiency in power management is going to be a hot trend.”

Design engineers are increasingly choosing Web-based catalogs over print catalogs. “Today, half of Mouser's business is conducted online,” says Michael Knight, VP, product marketing and supplier marketing at TTI Inc. in Fort Worth, TX, which owns Mouser. “They're not coming to the distributor. They're going to the online catalog pages.”

Distributor executives note that the website has also become the preferred place for engineers to find technical information on components. “Engineers now prefer the Internet to obtain technical information,” says Steven Tsukichi, VP of marketing at Digi-Key Corp. in Thief River Falls, MN “In response, most distributors are trying to create new engineering services on their websites.”

Software is also becoming more important to design engineers, which means engineers at distributors have to become increasingly adept with design software. “Now, 60 to 70 percent of the engineering time is on software because design has become so complex,” says Marc Gsand, VP of marketing for the Semiconductor Business Group at Avnet Inc. in Phoenix. “Distribution hasn't hung its hat on software expertise, but now we're seeing customers coming to us for help with software.”