The cold calls never seem to stop.  You have a stack of line cards on your desk thicker than the extended version of War and Peace.  Then there’s always those creepy, overly friendly and persistent emails from a distributor you talked to six months ago who just won’t get the hint.  The amount of unwanted correspondence and solicitations purchasing professionals get on a daily basis is enough to issue a restraining order for stalking.  Whatever it may be, the nonstop onslaught of marketing and begging for business seems go on forever when it comes to the amount of independent distributors within the electronics manufacturing industry and buyers should choose wisely.

It’s apparent why all types of OEM and EMS providers choose the ‘crem de la crem’ of franchised component distribution… aka Arrow, Avnet and Future Electronics to ratchet in fair pricing, favorable schedules, in house stores, engineering support and quality solid product….but what about the other guys?  The smaller, niche serving distributors who fill in the gaps when the big boys drop the ball?

Whatever the case may be, at some point you’ve done enough homework to form a viable group of ‘go to’ distributors for all types of sourcing needs.  Every company has a different approval process.  Some will add a new supplier at the snap of the finger and others take careful measures to insure the integrity of the supplier fits their quality objectives.  So how well do you know your supplier?  I pose this question because I constantly see new distributors popping up all the time claiming tons of industry accolades, including quality certifications and thousands of lines of stocking inventory.  In my experience, doing some quick online investigating and asking the proper questions can save you a world of potential supply chain disasters.

Two words that can grossly change how you look at a new supplier:  Google Earth.  Recently, we were looking at adding a new supplier to our AVL but quickly changed our mind after inputting the company address into Google Earth and confirming they were misrepresenting who they were.  The prospective supplier had boasted to me that had over 30,000 line items of stock on hand.  Google Earth told us a different story.  The company address was legitimate….only it was to an apartment complex.  Google earth gives you the ability to view the actual satellite image closely to confirm the company is really what it’s presenting itself to be, showing building size and location.   We’ve also found many times, and my personal favorite is when the address shows up as ‘UPS Store’.  I am guessing that’s for the distributor on the go who only has enough time to switch out packing slips and forgo any QA inspections.

Now, to claim that any distributor working out of their home or apartment has less integrity than a company working out of an actual office/warehouse would be insulting and untrue.  There are some very good home based brokers who have key relationships that afford them an industry niche not requiring high level inspection equipment, racks of inventory or supporting staff.  They typically trade direct from authorized or factory channels and are usually transparent with their customer base about their capabilities.  The same goes the opposite way.  I’ve seen larger stocking distributors with nice buildings and tons of employees deliver highly questionable product.  There are well over 1,000 independent distributors in North America actively supplying parts today and buyers need to be savvy when it comes to truly understanding who they are dealing with.  Below are a few areas that should be examined closely when adding a new independent supplier.

Obtain Industry References
Even newer companies should be able to produce decent references.  If the supplier you are looking to do business with has any level of credibility, don’t just take their word for it, ask for a list of OEM or EMS customers that can confirm a high level of quality, service and support.  If they aren’t willing to produce references, consider that a red flag.

Obtain Quality Documents
If the supplier is claiming to be ISO 9001, ANSI S20.20 or AS9120 certified, ask for an actual copy of their certifications.  Be wary of companies claiming to be ‘ISO Compliant’.  As many of us know, getting ISO certified and maintaining that certification as well as following procedure on a daily basis is not an easy task.  I find it hard to believe organizations would be compliant to the strictness of ISO standards if not being held accountable by an outside audit company on an annual basis.  You should also request a copy of their Quality Management System for review to make sure what they are preaching is documented.  If you are dealing with an independent that does not have a documented anti-counterfeit procedure in place, I would consider that extremely risky.  If they do, ask for a copy and make sure it meets your inspection and screening objectives.

Scheduled Site Audit
Nothing beats seeing your supplier’s facility firsthand.  By visiting and inspecting in person, one can see a supplier’s quality team in action and get an excellent understanding of that organizations level of expertise and capabilities in supporting needs properly.

Get it in Writing
Negotiating for payment and warranty terms are hugely important in today’s buying market.  Make sure you are asking for a longer return policy in the event of faulty product.  Companies who give you a very small window of time for returns are doing that because they don’t have faith in the product or have done little on their end to confirm the integrity of the parts.

Stop Googling Part Numbers
I cringe when I hear stories of buyers putting a part number into Google and using that information for vendor selection.  If that is your plan for sourcing obsolete or allocated components, please call me because I have a bridge for sale that I believe you’d be interested in purchasing as well.  Instead, align yourself with suppliers that can demonstrate how and why they can protect you from receiving substandard product.  Just because a company is certified or affiliated to an industry organization doesn’t necessarily mean they have all the answers or are practicing a diligent approach.  Set the criteria with your internal quality managers and hold suppliers accountable for those set processes.

The internet and trading platforms have made it easier and easier for buyers to find new vendors.  If a deal seems too good to be true, it probably is.  Make sure you are doing a diligent approach when searching and selecting a new supplier for your AVL and hold those suppliers to a standard that has been well thought out and signed off by internal quality engineers and managers.

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