Outlook 2014: Why electronics distributors are riding the internet wave

4 min read

The past five years have seen massive changes in the services offered by electronics distributors. Distributors are still the 'middle men' in the supply chain, but they are no longer just a place to buy components: they have a much bigger part to play by providing new resources and greater design support.

This relatively new role has been made possible by the Internet, and by the realisation by some of the industry's key protagonists by – including RS – that they are ideally placed to offer a great deal more than simply a warehousing and delivery service. RS continues to build proudly upon its heritage; the company was one of the first high service electronics distributors to provide innovative online services, and is investing significantly in resources and into its eCommerce activities. The goal: to save time and money for customers and to deliver commercial gains across the industry. Unlike its rivals, however, RS has not abandoned its famous printed catalogue, recognising that there are still many customers who find it easier to flick through the familiar paper document to find the required parts. As new generations of engineers come through who were born and have grown up in the Internet era, the appeal for print will undoubtedly diminish but, for now, the catalogue still has immense value. Evolving and fine-tuning an effective and efficient web-based business model, however, is where the emphasis now lies among the broadline players, and there are clear benefits for the customer. For a start, the amount and selection of products it is possible to make available through online component libraries is virtually limitless, and this means that customers can order and purchase the latest products from the distributor's stock practically as soon as they roll off the manufacturer's production line. Providing access to such a vast range of components online has its downsides, however, potentially creating a recipe for confusion and overload, so the process must be managed very carefully in order to ensure that customers are guided through their product selection simply, quickly and effortlessly. This is where intuitive parametric search tools come into their own for choosing components, while online quoting systems allow customers to upload part lists and search through the entire product range automatically. On top of being a huge time saver at the sourcing level, this also helps the different departments involved in procurement within the organisation to work more effectively together to speed the entire purchasing process. These are just a couple of the many examples of how the websites of high service distributors are evolving to make life easier for customers and, over time, site navigation is becoming much simpler. The past decade or more has not only brought with it the exploitation of the Internet, but also a significant shift in the products emerging from the electronics industry. The early 'Noughties' focused largely on System-on-Chip solutions, whereas today the trend is towards subsystem and modular board-level products that are essentially plug-and-play. The arrival of simple-to-use low-cost, single-board computers from companies including Arduino and Raspberry Pi has started to open up the world of technology to an audience that was previously uninterested, inexpert or simply could not afford to invest in costly components to experiment with electronic design. This growing embracement of technology among an increasingly consumer-type audience is at the same time a challenge and an opportunity for the distribution channel. Although this wave of interest means, encouragingly, that more and more people are starting to enjoy and understand technology, it also means that distributors need a web infrastructure in place to cope with the high demand for small volume orders, and must provide intuitive interfaces that mimic consumer-driven sites, for example those of Amazon and Tesco. This democratisation, or increased accessibility to electronics, is having a knock-on effect throughout the industry. As the potential global customer base expands, suppliers are now looking for ways to exploit this for their business growth to supplement the high volume orders they receive from identified customers. In order to achieve this, they are reaching out to the high service distributors who are adapting their eCommerce systems to manage the many thousands of small customers who are entering the market. While activity at this end of the market froths and bubbles, perhaps spawning many of our future engineers, the bread and butter of electronics distribution still remains with the professional engineering community and supporting this community is a priority, not only for RS, but also for its rivals. Let's look at RS as an example. It is now more than three years since the company launched its online DesignSpark community, a goldmine of information and time saving resources for engineers. During that time, we have seen the site amass more than 3.8million visits, with many users going to the website to download and take advantage of the free DesignSpark PCB design and assembly software. Using the site to gather feedback from the community, RS has taken on board suggestions from its users for the development of the tool, which is now on its fifth release version. Amongst the new functionality are such features as online design rule checking and buses in addition to the BOM quote tool, PCB manufacturing tool and the ModelSource component library introduced in previous versions. The level of uptake of these types of free tools stands as testament to their popularity among engineers, so it is no surprise that distributors are keen to evolve these support services, often through collaboration with external expert resources. One of the most recent and exciting advances comes from a partnership between RS and 3D modelling software provider SpaceClaim, with the introduction of a free, easy-to-use 3D modelling and assembly tool. The motivation behind the tool's development, which RS has named DesignSpark Mechanical, was the on-going theme of saving time and money for engineers, coupled with a much bigger goal of reaching and helping all engineers everywhere. Because the tool uses the much simpler direct modelling technology, compared to complex feature-based CAD, virtually anyone can get to grips with it quickly and cut days or weeks off their design cycle. This is a real boon to the smaller and medium companies that have historically failed to compete with their bigger rivals due to lack of budget and 3D CAD expertise. Never before has technology been as accessible or affordable to a mass audience. While the Internet has been the enabler, it has taken forethought, initiative and collaboration across the electronics industry to reach this point. High service distributors are in a very strong position in this changing environment and are intrinsic to the success of this new wave of democratisation that is sweeping the world. RS Components RS Components and Allied Electronics are the trading brands of Electrocomponents plc, the world's leading high service distributor of electronics and maintenance products. With operations in 32 countries, RS offers more than 550,000 products through the internet, catalogues and at trade counters to more than 1million customers, shipping around 44,000 parcels a day. Its product range, sourced from 2500 leading suppliers, includes electronics, automation and control, test and measurement, electrical and mechanical components. Glenn Jarrett is global head of product marketing for RS Components.