Design services are for mature products, too
By Jim Carbone -- Purchasing, 3/6/2008 1:39:00 PM
When buyers decide which full-service distributors to use, they often review the design services the distributors have to offer.
In the past, buyers would closely look at the design services that center on new product introduction (NPI). However, distributors say there is greater interest in design services that focus on the value engineering of existing or mature products. That's because most companies are running lean and may have their design engineers working primarily on NPI. At the same time, there is a need to take out cost of existing products.
"We hold customer council meetings twice a year," says Marc Gsand, vice president of marketing for Avnet Electronics Marketing Americas. At those meetings Avnet customers cited the need for value engineering (VE), he says.
With VE, an OEM looks at the design of one of its existing products and tries to find ways to change the design to lower the cost, perhaps by using a different part or fewer parts.
"It seems a lot sexier to handle that NPI stuff because the margins are always large and that first product to market is always the one that gets all the press," says Gsand. "But in times like this driving cost out of existing products is critical for customers," he says.
He adds that there are often fewer resources at an OEM for engineers working on mature products, which is why OEMs need distributor support.
"Our customers are looking for us to come in and meet their maturing engineering group and figure out ways to design in new components that will have a longer lifecycle and a better cost point," Gsand adds. He says working on older products is an opportunity for Avnet "to get new registrations and treat it like a brand new design."
Gsand says Avnet's component engineers work with engineers and buyers to find ways to reduce cost for existing products. "We are hiring more component engineers that are supporting customers from a centralized perspective," he says. The component engineers can be contacted 24 hours a day via phone or the Web.
While large distributors often provide design services focused on semiconductors and printed circuit boards, some small distributors offer services centered on non-chip niche products. Case in point: House of Batteries in Fountain Valley, Calif.
As its name implies, the company sells batteries and batteries packs to OEMs and often has to design the packs as well.
"A customer may come to us and he may only have an idea on how long he wants the battery to last in his application,” says Don West, president of the company. “From there we find out if he wants low-cost manufacturers or very high quality. What chemistry does he need?"
Rechargeable lithium is widely used now, but it is not always the best solution because it is expensive and there are safety issues. "There can be NRE fees with that chemistry, but with other chemistries there are not,” West says.
There are safety issues because lithium cells have caused fires in equipment. "We have to design a safety circuit with lithium and that’s where a lot of the design work comes in," he says.
Also see: Distributors focus on optoelectronics
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