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A design sign of the times: Distributors boost technical support offerings

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.

By Barbara Jorgensen, Contributing editor -- Electronic Business, 11/3/2009

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 Inc. 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 analog 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 Inc. 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 Corp. 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 Corp 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 fulfill 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 catalog 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 Center (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 catalog 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 analog 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.”