Whether you are an engineer working on a new product design, or a purchaser seeking parts to keep an assembly line running, you realize that finding what you need, when you need it, at a price that makes sense, can be daunting. Whatever your procurement challenge, there are some general suggestions you might want to keep in mind as you search for just the right parts and suppliers to fill your needs. 

The Simple Formula

We’ll briefly cover some of the proven tips that can help you manage the acquisition of the right electronic components for your situation, but before we get into those, here is a very simple, three-step component purchasing strategy that can guide you no matter the size of your department. If you are already managing a tight ship, then you know them. If not, here they are:

• Anticipate: not just projected internal needs, but also the effect of external realities, like supply chain disruptions, shortages, regulation changes, currency valuations, labor issues, political drama, and yes, even pandemics. Ignore the realities of a world-wide market at your peril.

• Plan: having anticipatory awareness of potential problems (step 1) allows you to plan for disruptive situations, which will happen. Develop checklists, trigger points, coping strategies, and key relationships that will give you leverage. Get your associates to buy-in to your adaptive strategies, and have your specific action tactics ready to go.   
• Act not React: take action today with your external suppliers and distributors to develop advance mitigation strategies which you can implement quickly. Action allows you to control your situations, reaction allows them to control you. Make sure each of your partners is on board.

And Now Some of the Details

The three broad guidelines we just offered are appropriate for almost any industry and situation. No matter how much you agree with them, they are nonetheless a little wide-ranging and may leave you searching for more detail. So, let’s take this a bit further. Here are some additional tips for procuring electronic components gleaned from various sources in the industry. They are in no particular order, nor is the list meant to be all-inclusive. 

What they do offer, however, is a chunk of thoughtful conversation starters that may prime your search for ways to build a department that functions well, anticipates changes, leverages resources and effort, and saves everyone many headaches in the process.

Here is our list of procurement management tips for component users:

• Plan for new suppliers and products. Always meet with component salespeople with new products or those from new companies. They bring you today what you may be needing tomorrow.

• Know your product and production requirements thoroughly. This is an easy one but is still often ignored. Know the specs and needs of each of your projects thoroughly. Research the realities of the customers using your products. And understand your company’s production realities and limitations. 

• Use digital tools to leverage bulk order pricing. Supply Chain Management (SCM) software like Shippabo, NetSuite, or Tada can help businesses large and small do a better job of inventory management, supply planning, and supplier collaboration.

• Understand the realities of off-shoring. The pandemic offered a real-life lesson in the complexities of buying off-shore in order to get a better price. Still-in-transit or unable-to-ship notifications due to supply chain glitches do dot help purchasing managers sleep well.  

• Know your suppliers and distributors. This is similar to knowing your own production line requirements. If you don’t know and understand the capabilities of each of your suppliers or distributors, then you risk not only problems, but also missed opportunities.

• Share your information with your suppliers. Knowing your suppliers is just one side of the sourcing coin. You also need to share information with your trusted partners because if you always like to go it alone, at a critical point you may find you achieved what you were after.

• Establish guidelines in advance for sourcing flexibility. While understanding your product requirements is critical, you also need to determine in advance how far you can safely stretch critical component specifications and still meet engineering demands or regulatory requirements. 

• Establish counterfeit part avoidance guidelines. Demanding documentation, asking for serial numbers, doing random batch specification checks, and establishing a traceability program can be crucial, especially if your end product goes into aerospace or defense.

• Seek an original parts guarantee to avoid counterfeits. The issue of counterfeit or re-worked parts is real and crucial if you are producing products for critical applications like defense or healthcare. Demand an original parts guarantee from your suppliers where necessary.

• Make sure you are working with the very latest product data sheets. Product specifications and designs change frequently, but often data sheets do not. Make sure you have the very latest figures on what you are sourcing.

• Be cautious with unbranded goods. Components lacking a brand may be available at attractive prices, but when your product or company reputation is on the line, think long and hard about just what you may be getting.

• Know your supplier policies thoroughly. Understanding the policies of your suppliers is important, but it is critical to always ask detailed questions and demand documentation, especially on out-of-spec parts issues, damaged goods, etc.

• Use a reliable, authorized component distributor. The ability of an authorized, reliable distributor to add to the value of your business cannot be over-stated. Establishing trusted partnerships is the foundation of procurement success.

• Know the lifecycle stage of critical parts. Don’t let an end-of-life (EOL) notice on a component threaten your production line and force you to scramble for substitutes. Many progressive distributors offer EOL programs. Take the time to understand these before you need them.  

• Don’t forget about repair, replacement, and re-work needs. While you require components for your primary production line, you may also need to forecast and source for repair, replacement, re-work or product guarantee situations. 

• Follow shipping trends, costs, and policies carefully. Once again, the pandemic offered lessons in shipping that we cannot ignore or forget. Despite contracts, shipping costs can soar overnight and remain a threat to product margins.
• Always have a back-up plan. This is the easiest tip to understand but often the hardest one to put into use. Back-up plans for unforeseen situations need careful consideration, understanding of market and supplier realities, and buy-in from both internal and external partners. 

Summary

The design and engineering of a product that requires electronic component content is often seen as the most challenging part of product development. Equally critical, however, can be the intelligent sourcing of the components you need, and will continue to need in order to keep your business running. 

By taking some of our buying tips to heart, and working closely with your trusted suppliers or distributors, you can save time and money, create value, and build a stronger department and overall business.  If you are looking for more information on the same, check out how our friends at CircuitBread explained this:  What Are Some Tips for Buying Electronic Components?