Even with an improving economy, the pressure to do more with
less continues to transform the electronics design chain. Cost
constraints are driving component makers to focus only on their
strongest or most profitable technologies. Competitive pressures
are steering engineers toward high-performance - but low-cost -
design solutions.
Although it appears the design chain is streamlining, the exact
opposite is true. While engineers can cherry pick among their
suppliers' best technology offerings, integrating these devices
into a cost-effective product design takes more - rather than less
- time and effort.
"Designers used to be able to go to one source if they had
questions or issues with a design," said Roy Vallee, CEO of
Phoenix-based distributor Avnet. Suppliers - such as the
Motorola, National Semiconductor, or Philips of a decade ago - used
to offer a suite of products or technologies designed to work
together.
"Now, as suppliers focus on a single technology, [designers]
have to go to their analogue guy, memory guy, ASIC guy, and
everyone else to solve a design problem," explained Vallee. And,
while suppliers provide technical support for their own devices,
they don't necessarily see a customer's entire design, said Michael
Long, CEO of Melville, NY-based Arrow Electronics.
Designers could spend hours online or make a dozen phone calls
to resolve a simple compatibility or integration issue.
Combined with shortening product lifecycles and tight OEM profit
margins, "these forces are putting a lot of pressure on designers'
cost and time," Vallee said.
Distributors are seizing this opportunity to showcase one of
their core competencies: providing a one-stop shop for a variety of
components and technologies. Even though the channel has cut
personnel during the recession, distributors are retaining and even
making select investments in applications engineers, Web tools,
technical training seminars, and other types of design assistance.
"Technical competence is going to be one of the major trends
shaping the distribution channel as we move forward," said
Vallee.
Distributors are in a good position to address an assortment of
design problems because they carry every component required to
solve the problem, said Rick Zarr, PowerWise technologist for Santa
Clara, Calif-based National Semiconductor. But
distributors recognize simply offering the products is not enough:
tools and technical support have to be part of the arsenal.
"Our distributors have really stepped up to the plate," said
Mona Hatler, director of worldwide distribution sales for FPGA
maker Actel in
Mountain View, Calif. "They participate in all aspects of our
training; come to us for additional input; and are working with us
to target vertical markets."
Engineering acumen is becoming as important to the channel's
success as world-class logistics, executives say. The channel also
has a profit motive in all this: distributors that get involved
early in a product's design are more likely to fulfil a volume
production order later on.
The channel has had to make adjustments to cater to customer
design needs. Distributors' biggest efforts used to be targeted at
designing one vendor's key component into an OEM end product. Now,
distributors are providing applications-centric - rather than
vendor-centric - design assistance.
"It's no longer about picking the best chip," said Jeff
Hamilton, director of marketing, design engineering, for
Chicago-based catalogue distributor Newark. "It's about making the
best system decision."
Distributors call this a more "agnostic" or "holistic" approach
to design support.
"We can aggregate what we see and hear from our suppliers and
from our industry visibility to render the best design enablement,"
said Andy Femrite, manager of Arrow's Engineering Solutions centre
(ESC).
"The strong design experience from our field people in
collaboration with the ESC enables us to steer customers toward
technology they may not be aware of; validate technology they've
heard of or found on the Web; and divert them from technology that
may put their projects at risk."
A typical scenario, according to Thief River Fall, Minn-based
catalogue distributor Digi-Key Corp, involves a design
engineer weighing the tradeoffs between various FPGA and DSP
solutions for a new project. The designer hasn't before used an
FPGA. A Digi-Key applications engineer helps the designer evaluate
which solution best meets the product's requirements and is
involved in the designer's selection of an Altera Cyclone III FPGA.
The designer and engineer also tackle the product's analogue front
end and move toward a solution involving National Semiconductor's 1
GSPS ADCs and WaveVision simulation software, for example. The
colloquy includes interfacing the high-end ADCs with the Cyclone
III.
Avnet began providing hands-on design assistance several years
ago. The distributor develops and supplies board-level evaluation
and development kits that include sample or reference designs and
all the necessary hardware. Users can evaluate new products;
implement and debug real-world designs; and test products in a wide
range of applications.
Newark offers a variety of online tools and services for
designers. Newark's element14 Web site provides
content, design tools, and an interactive online forum where
designers can exchange ideas and concepts. The distributor's
TechCast library provides suppliers' training materials online and
its DesignLink tool provides an electronic interface to major CAD
tools. Engineers can search and find parts from within their CAD
design environment without ever having to leave it. Newark also
provides an array of selection guides that compare a variety of
products side-by-side. "What we are trying to do is take a look at
a wide set of products and give [customers] our own take on then,"
said Hamilton.
Suppliers also benefit from a technically savvy channel. In
addition to introducing suppliers' new technologies into the
market, distributors expand those technologies into new
applications. "Suppliers do an extraordinary job of tackling the
leaders in a market - customers that they have to 'own' - but they
may not have the bandwidth to address the product's full set of
applications on a worldwide basis," said Newark's Hamilton. "We can
add value by taking a TI product, for example, targeted at the 4G
market and testing it in an application that needs wide bandwidth
capability."
Many of these efforts are targeted at small vertical markets -
LED, medical, and "anything portable," for example - that may fly
under a supplier's radar. "We continually use our distributors'
input as part of our market strategy," said Actel's Hatler. "They
may have, say, 100 different customers and we'll look for the
common denominators that apply to us. Those are the markets we'll
go after." With overall chip sales expected to be flat this year,
suppliers are looking to these verticals for double-digit growth.
"The best way to approach these markets is to build solutions, and
that's where our distributors are adding value," Hatler said.
Even though the channel is moving away from supplier-centric
designs, casting a wide net can still help specialty companies
secure a spot on the board. "[Distributors] have the breadth of
product and the design expertise to build development boards with
chips from 10 different suppliers," Hatler said. "That actually
opens up expansion opportunities for us."
Barbara Jorgensen, Contributing editor - Electronic Business