From a distributors point of view – Digi-Key Electronics
Resilience and flexibility. Two words to sum up our industry's ability to ”roll with the punches”, to adapt and to overcome challenges. One specific part of our industry has however had the need to quickly strategies to tackle the shortage of components – the distributors.
In this article series, Evertiq has reached out to distributors and sourcing specialists of electronic components to see just how the experts are dealing with the current semiconductor shortage and what tools they have in place to cater to the needs of their clients. This time we contacted Ian Wallace, Vice President, Americas and EMEA Business Development, at Digi-Key Electronics.
Since the start of the pandemic the situation surrounding the supply of components have only gotten worse, how would you describe the past year in terms of operations?
”The past year has been challenging for everyone in our industry and there has been much need for resilience and flexibility. At Digi-Key, we have continued to invest heavily in inventory to support all our customers, and keeping our staff safe while we reached record levels of business in 2021 was paramount,” Ian Wallace tells Evertiq and continues.
”Many manufacturers still face challenges with raw materials and many components are still on extended lead times. We therefore had to work closely with suppliers and had to be flexible when receiving product into our product distribution centre. All our teams stepped up and showed great collaboration to make product available to customers worldwide.”
In the past, during periods of component shortages, we’ve seen an increase of counterfeit components hitting the market – what kind of measures does Digi-Key have in place to catch these?
”Long lead times and inevitable shortages have provided an opportunity for counterfeit component suppliers to take advantage of companies that are desperate to produce their designs. Companies have needed to expand their supply chains in order to fulfil their needs, but I would still urge companies to be very selective with regards to their supply chain partners, to ensure delivery of authentic components.”
Mr. Wallace mentions that Digi-Key only buys components from authorised / franchised manufacturers, and that the company is confident that it's receiving new, authentic and fully warrantable components.
”For each of our millions of components, Digi-Key holds documentation valid for 10 years that proves the traceability of the part and its authenticity. These certificates are readily available to any customer upon request. Additionally, each of our 2,200 suppliers undergoes a thorough vetting process when we bring them onboard to ensure traceability. Digi-Key is also CAAP-certified, meaning that our counterfeit controls have been verified by an external auditing company and that our components are compliant to aerospace standard AS6496.”
Which specific product group that has been the most affected by the shortage?
”We have seen shortages and extended lead times across many different product categories --semiconductors have probably been the worst affected. Following that, microcontrollers, processors, certain timing ICs and discrete components are the next most affected. Average lead times for certain products in the passive arena have also increased during the past year, including capacitors and resistors.”
What are your feelings about the current market situation as we enter 2022?
”I feel that there is a lot of strong activity in the current market, but also many frustrating challenges for companies to complete their designs and then purchase their entire bill of materials (BOM) to manufacture the product. Cash flow is also more important than ever,” Mr. Wallace explains.
”I believe the challenges with lead times will continue for now, but hopefully there will be some improvements in the second half of 2022. There will also continue to be strong design activity from many different markets including IoT, medical, AI, automotive, wearable devices and 5G.”
”Digi-Key will continue its commitment to the design engineer in 2022 and beyond as we continue to onboard both new suppliers and products to ensure that we offer the broadest selection of electronic components in stock and ready to ship, giving engineers around the world access to the parts they need.”
For 2022, what plans does Digi-Key have in store to further deal with the problem at hand?
”I believe technology and innovation will continue to evolve at a strong rate and Digi-Key will continue improving our overall offerings to customers, whether that is stock availability or ease of doing business on our website. We provide access to online tools to help customers, such as myLists and Quote Manager as well as access to information on lead time trends and on digital procurement solutions such as APIs.”
”Our expanded Product Distribution Centre Expansion (PDCe) is set to go live this year, which will quadruple our footprint with an additional 204,400 square meters of space and allow us to serve close to three times the number of packages that we support today. That additional space will allow us to offer even more stock availability, as well as offer related products that engineers are searching for and asking us to provide.”