Connector suppliers and connector purchasers have a differing agenda. Distributors add value in the middle of the supply chain by balancing their opposing needs, explains TTI’s Lew LaFornara
Electronic connector suppliers have a specific focus—to build the best connectors, operate efficiently and provide innovative and enabling technologies while making a profit. They are expert in design engineering and manufacturing, but they’d rather not be heavily involved in warehousing, maintaining ‘ready-to-sell’ inventory, developing customer specific supply chain programs, or handling quick turn drop in orders at less than lead time or less than minimum order quantities (MOQs).
Conversely, customers purchasing connectors are looking for increased flexibility and value add from their suppliers. Customers want to buy the exact quantity for their needs without being limited by MOQs or packaging constraints. They need to meet ever increasing demands from their customers and, in turn, need high levels of available inventory, responsiveness to changing demands, and a range of supply chain programs that get them what they need, when they need it.
Fortunately, in between connector suppliers and their customers are distributors like TTI. By addressing both ends of the supply chain, distributors provide a vital value proposition. The distributor aggregates demand and schedules orders in a way that allows suppliers to optimize production. This then allows customers to take advantage
of the economies of scale and aids suppliers in forecasting coming product trends in the marketplace.
Building a buffer
Suppliers also look to their distribution partners to act as a buffer to the business cycle and to help them with product pipelines. Knowing they have a viable market for their goods means connector manufacturers can plan production schedules and raw materials purchasing when market conditions are most favorable and labor operations can be optimized. This means better pricing and lower component costs for the end customer.
At the other end of the supply chain, customers purchasing connectors through distribution benefit from the macro level view the distributor has of the entire industry. This purchasing intelligence enables TTI to maintain available to sell inventory, not just of the most popular A and B level movers, but even slower moving or customer specific D and E level connectors and components. TTI’s inventory breadth means these parts are on the shelf and ready to sell. This is especially important in markets such as military/commercial aircraft or defense electronics, where life cycles for products can stretch years beyond their original designs.
Improving flexibility
For customers moving finished goods into more volatile markets where competition is keen and getting an item on to shelves is crucial, a connector distributor can make all the difference by providing flexibility in supply and delivery. Minimum order quantities for production ramp up can then move to lead time management as the market grows.
Supply chain management tools such as TTI’s AIM programs and lot size analysis application help forecast component purchases and track production numbers, providing lead time management to smooth component delivery and eliminate production downtime due to a lack of available connectors.
Customers fostering a good distributor relationship can also gain economic flexibility such as extended terms, providing benefits throughout the supply chain for customers and helping sustain the market for the supplier. These are some of the many advantages provided by today’s connector distributor, which can also expand suppliers’ reach into emerging vertical markets. The result: stronger links throughout the connector supply chain.