August 21, 2017
Buyers look to partner with distributors
Having the right number of capable distributors can help EMS providers avoid shortages, reduce cost and manage supply chain risk By James Carbone for Electronic-Sourcing Online.
In an interview, Vexos Stephanie Martin, Senior Vice President, Global Supply Chain talks about the impact of choosing the right sourcing partners.
One of the most important challenges for electronics purchasers is determining the optimum number of suppliers their companies should use for the commodities needed for production.
Buyers want to have enough suppliers to guarantee continuity of supply and to ensure there is healthy competition for components and other production materials that are purchased. However, they also need to make sure they don’t have too many suppliers because then they could lose purchasing leverage if a large number of suppliers were awarded a small amount of business for a commodity.
The issue can be especially challenging for buyers at electronics manufacturing services (EMS) providers, who often must purchase parts from suppliers that are on their OEM customers’ approved vendor lists (AVL).
Adding to the challenge is that many EMS buyers by at least some – and in some cases the bulk – of the components needed for production from electronics distributors. Buyers at those companies must make sure that the distributors they use can provide the components and value-added and supply chain services to help the EMS provider meet the requirements of OEM customers.
One such EMS provider is Vexos, a med size, full-service EMS provider based in Markham, Ontario, Canada that builds boards and systems for OEMs in the automotive, communications, medical, safety and security and other industries. “We buy almost exclusively through franchise distribution,” said Stephanie Martin, senior vice president of supply chain management for Vexos. “We are in distributors’ sweet spot.”