When it comes to electronic component suppliers, we would like to mention distributors, agents, original manufacturers and traders, which play important roles in electronic components industry. With big data, IOT, cloud computing, and AI as emerging power and a massive part swarming into various industries, new digitization channel of electronic components connected to Internet came into being, namely online supply chain service platform, which is an inevitable tendency. This article aims to analyze the industry status of electronic components and demonstrate the prospect in the future.
Today’s electronic components Supply Chain business model
Now electronic components suppliers catering to end users mainly refer to agents, distributors, traders or even some original manufacturers. If we have to tell their difference, that will involve the circulation chain.
For example, some end users with large quantity will import the components directly from original manufacturers but only for the single product line. Therefore in order to extend their business line, some of them will not only provide their products with original manufacturers but also authorize some agents, which is their mainly business scope.
Thereby, agents can be regarded as the original manufacturers incarnate. But they do not manufacture products, only promote and connect to more partners and customers to customize the brand product. But as for distributors, they have similarities with agents. Most of them have relatively large quantity stock in few materials. So they also be regarded as catalogue distributors, serving large and medium ODM, OEM, EMS factories with single materials but large quantity. Most of the components are from agents, traders even end users.
Moreover, they are always accompanied with shortage and purchase price variance.When the components are under supply, these distributors will search and pick parts for you in the global market, which also means the floating price and high margin. Surely they also extend their business on the future goods whose profit can not catch up with stock, however they can be treated equally as agents by end users when long-term and stable supply is reached. As a consequence, we can conclude that agents and distributor can guarantee the stock for you but they can not totally assured that extensive product line and relatively competitive price. In terms of traders, the biggest difference between agents and distributors is authorization. Obviously, traders do not have the authorization. They have very extensive product line that can guarantee a flexible supply for your project. But that also means the business is along with high risks and complexity. So, there indeed need a detecting system to monitor and regulate the fake ones, which is absolutely unable to avoid. Some traders have their strict standard to test their products because there are so many counterfeits in the electronic components industry, especially for traders without authorization.
Anyway when there is increasing demand for electronic components, some end users even some agents and distributors sometimes extend a business with them when undersupply occurred, which also signify the high price compared with usual ones. We can infer that there are advantages and disadvantages via analyzing these suppliers. But in my opinion, these suppliers’ generation is also a kind of evolution process of simplify and efficiency in the electronic components industry, but tough problems exist around all the suppliers and customers. Such as sharply floating price, delaying, materials shortage, fake components and so on. Then a new supply chain model of electronic components has been being expected to cater to requirements and standard in the new era.
In order to adapt to the trend and progress of technology and IOT, online supply chain platform of electronic components emerged on a small scale for now. But the model is indeed favored by more and more target customers. So how does this model platform work and what is its prospect and situation? We can conclude that “Direct marketing + Third party entry” simultaneously can be incorporated in the online platform. Direct marketing can be understood that the online distributor platform can directly start the business with customers. But as for the third party entry , It refers to various original manufacturers, agents, distributors or even traders as third-party service providers having access to entering the platform to extend their line of business. Therefore, the two methods integrate with the big data, which facilitates the platform to reach online all-around and overall supply chain service. At the same time, the online platform keeps the whole supply chain team on the same page with ease and security. But how does the online electronic components platform achieve that? I like to analyze it from three points: Big data , Artificial and intelligent supply chain and Target for SME (small and medium enterprise) .
With increasing globalization, no body can stop big data era coming. Even fast-food restaurants are using data analysis to optimize customer service. Data analysis can promote growth by providing information that is vital to growth strategies including customer preferences, regulatory differences, competition analysis and more. In the electronic components industry, enough and huge items data and incorporating data analysis into the supply chain can help a company improve visibility throughout the entire chain. Especially for the industry, components’ price floating, quick upgrading and large quantity urge that a new platform can help massive customers find the most suitable and comprehensive components for them, which is involved with a big database to compare, analyze and pick the most appropriate parts and offer more decent price via constantly uploading and optimizing data. Therefore, database is more like a structure of the platform to support the whole well- organized operation.
Artificial and intelligent supply chain
The next one is artificial and intelligent supply chain that is to reduce length of the chain to some extent by cutting down a middleman. It is well known by us that several materials will be easy for customers to purchase but as for some purchasers, they will need to deal with one or several whole BOM lists that maybe be related to much work for them. At this time, it will be so tiring to get quotations from several distributors, agents or traders for respective materials. But the online platform of electronic components can cater to the demands by shortening procurement process. So a intelligent components platform enable customers to get a one-off BOM mating within shot time. Besides, they can flexibly deal with BOM issues such as alternative components for EOL components or shortage components. After matching, the online supply chain platform will take the responsibility of jobs from customers’ enquiries to product delivery, which largely saved the time, cost and resources for customers.
Target for SME
Just as we mention, third party entry is available on the platform. Lots of original manufacturers and agents can enter and cooperate with the online suppliers. But as for the large enterprises’ purchasers, they often directly keep touch with original manufactures due to large quantity. There is no necessary for them to get involved with agents, distributors, traders even some platforms. Single original manufacturers can totally meet the requirements of big enterprises offline. However, for SME, they maybe do not need components in large quantity like big enterprises but with various item, which conduces to the need of a supply chain for their projects. According to the statistics, the SME takes 70% in electronic components trade. Therefore the online supply chain platform is apt to massive market-SME because its overall supply chain service is available to complete materials data for SME.
Allchips as the first online supply chain platform of electronic components online, totally grasped and absorbed the new model so that they can sharply occupy the market. So what is their uniqueness? It can be expanded from three points: Data processing, One-stop service and Flexible & specialized service .
Companies in almost every industry are learning how to harness the power of big data to improve their processes and products, including in the electronic component supply chain. Allchips emphasized this a lot. Their BOM solution is the best reflection. Allchips cooperating with over 1000 brand manufacturers and authorized agents,covering 80% of the main brands of electronic component, Allchips’s BOM solution can continually compare real-time pricing and availability from suppliers and offer a favorable quotation with costdown according to your lead time. At the same time, Allchips’s BOM solution applied the data analytics to predict and respond to changes in demand. Some demand changes are cyclical with others influenced by environmental factors and EOL, which shows in their risks reminder. Then the system will automatically match alternative components according to the risks and EOL, further provide the plan suggestion.
Now matter for the several materials or the whole BOM service, Allchips will offer you one-stop service from quotation to products after service. Like the following picture shows :
The overall service can guarantee the efficiency and high quality of components. Above all, the whole service process will save a lot time, cost and labor resource for your whole project operation.
Flexible & specialized service
A good platform also have the ability to be equipped with a good solution for the unexpected cases such as delaying, price floating and parts shortage and so on. A flexible and effective resolve is not only related to attitude but also about the platform capacity to deal with tough situation and business ability. Allchips absolutely enables massive customers to cope with obstacles like that. Besides Allchips can offer the service like optimizing the project and their components, which totally demonstrate their flexibility.
It is firmly believed that more and more online supply chain service platforms will emerge and step into the main electronic market. Allchips as the first of pioneers is sparing no effort to making breakthroughs for creating more possibilities in electronic components industry, which is also creating innovative solutions to ongoing challenges.