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Electronics Production | July 03, 2007

In-design – why and for who?

When distributors in their statements announces that they will focus more on design-in with addition of more Field Application Engineers they are doing this to get closer to the design of the electronics. The result from this is that the distributors will get their components added to the BOM at an early stage but who are actually the winner and who will be the losers from these design-in activities?
There are surely many ways to sell in a component to a project or a product. There are certainly also many different actors who actually are selling in the component to the product. In-design has many times been discussed in evertiq's discussion forum and this subject about how the components are specified into the products BOM is something that often comes up for discussions.

Some are talking about violations of competition laws, some are talking about that the end customer gets less flexibility and the winners from the design-in appears to be the distributors, according to the signals that have been given. evertiq has experienced frustration from several industry actors and this subject is apparently something that involves many different actors in the industry but nobody wants to talk about this in public so what is this whole thing about then?

When a component is specified in a product's BOM there is often a so called FAE involved at the work together with the electronics designer. The FAE (Field Application Engineer) will have its end customer specify the key component that fits its product. Later when the component is on that BOM the component is also obligated to be sold through the distributor who made the design-in. That is the kick back to the distributor from the component manufacturer for designing in that particular component. The winner is the distributor who now will get to sell this component to this specific product no matter what until the product goes through a re-design. As long as there are components available at the distributor, the function of the product is satisfying and as long as the price of the component is acceptable everything is fine for the product owner but in case of allocation or trouble with the supply of this specific component the troubles are taking shape. When the lead-times go up and when the component are getting really hard to get the price will also rise and for the product owner, who is obligated to buy from the specified distributor, it is only to accept.

The EMS provider who also offers sourcing services and design support for the electronics designer at the OEM/product owner, the will of getting involved in the design, with help to chose components and help to design the product, is strongly driven by the aspects of getting the manufacturability and the total cost reduction improved. The components have to fill a number of requirements such as meeting the requirements of the function, availability through the entire product lifecycle and to offer the best price. From the EMS provider's point of view the design of the electronics will be best if he/she will have their influence in the design work to chose the right components. In this case the FAEs are obstacles for achieving the EMS provider's desired results, according to the EMS provider's signals evertiq has received.

EMS providers evertiq has been in contact with are saying that both they and the end customer will get in a difficult situation when the components are designed-in by the FAE at the distributor. On the other hand distributors evertiq has been in contact with are pointing out clear advantages by getting to design-in their components.

From that perspective the question is: What advantages and disadvantages are connected to the design-in activities? Who are the winners and who are the losers?

Post your opinion in the commentary forum below.
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December 13 2018 1:08 pm V11.10.14-2