The world's electronics connectors suppliers prefer to have specific focus – build the best connectors possible, operate efficiently and cost effectively, provide innovative and enabling technologies, and make a profit while doing it. These manufacturers are experts in design engineering, manufacturing, and to some extent marketing and branding of their products. They'd rather not be heavily involved in warehousing, maintaining ‘ready-to-sell' inventory, developing customer specific supply chain programs, or handling quick turn drop in orders at less than lead time or less than minimum order quantities (MOQs).
At the same time, customers purchasing connectors are looking for increased flexibility and value added services from their suppliers. Today, it is the norm that customers want to buy the exact quantity for their needs without being limited by MOQs or packaging constraints. They need to meet ever increasing demands from their customers and, in turn, need high levels of available inventory, responsiveness to their ever changing demands, and a wide range of supply chain programs that gets them what they need when they need it.
Fortunately, in between connector suppliers and their customers are distributors like TTI. By addressing both ends of the supply chain, distributors provide a vital value proposition. The distributor aggregates demand and schedules orders in a way that allow suppliers to optimize production, resulting in “available to sell inventory” that then allows customers to take advantage of the economies of scale that efficiency provides, and aids suppliers in forecasting coming product trends in the marketplace.
Suppliers also look to their distribution partners to act as a buffer to the business cycle and to help them with product pipelines. Knowing they have a viable market for their goods means connector manufacturers can plan production schedules and raw materials purchasing when market conditions are most favorable and labor operations can be optimized. These elements allow for better pricing and lower component costs to the end customer.
At the other end of the supply chain, customers purchasing connectors through distribution benefit from the macro level view the distributor has of the entire industry. The supply and demand expertise of the distributor allows them purchasing intelligence to maintain available to sell inventory of not just the most popular A and B level movers, but in the case of TTI, the breadth of the inventory means that even slower moving or customer specific D and E level connectors and components are on the shelf and ready to sell. This is an important part of distribution especially in markets such as military / commercial aircraft, defense electronics, etc. where life cycles for products can stretch years beyond their original designs.
For customers moving finished goods quickly into more volatile markets where competition is keen and getting a hot selling item on to shelves is a matter of corporate life or death, a connector distributor can make all the difference. Partnering with the right firm can provide flexibility in supply and delivery. Minimum order quantities for production ramp up can then move to lead time management as the market grows.
Supply chain management tools such as TTI's AIM programs and Lot Size Analysis application aid in forecasting component purchases and tracking production numbers, providing lead time management to smooth component delivery to ensure there is never an issue with a production line going down due to a lack of available connectors.
Customers fostering a good relationship with a distribution partner can benefit from more than just timely delivery of connectors, they can also gain economic flexibility such as extended terms for solid customers and other financial aids or incentives providing benefits through the supply chain for customers and helping sustain the market for the supplier.
There are many other advantages provided by todays connector distributor, such as access to new technologies for customers and expanding suppliers reach into emerging vertical markets, all of which strengthen every link in the connector supply chain.
Reprinted with permission from Electronics Sourcing North America.
