Taking an Independent Path:
Strategies for Low Risk Sourcing of
Components in a Constrained Market
LED lighting industry looks to independent distributors to address chronic
shortages in the availability of electronic components
Direct sourcing of electronic components for the LED lighting industry
used to be pretty simple. An OEM would order direct from the manufac-
turer or through authorized distributors to obtain any required compo-
nents. There was usually no need to look any further.
Today, the challenges of a highly stressed supply chain are forcing many
LED OEMs to rethink the way they source components. With parts such
as multi-layer ceramic capacitors (MLCCs) and other low-cost compo-
nents in chronic shortage with extended lead times for delivery, manufac-
turers must be able to get these parts on-time at the lowest possible cost
without assuming additional risk.
As a result, many are turning to independent or hybrid distributors for
long lead-time parts. The primary caveat: the components must meet
the specifications thereby avoiding compromising the integrity of the end
product. In other words, LED lighting manufacturers want components
that can be traced back to the original manufacturer.
For many companies, sourcing parts from the independent channel
requires a significant shift in mindset. It also requires a comprehensive
strategy for identifying and working with reliable independent stocking
distributors to ensure they get components they need, when they need
them.
“For LED manufacturers there has been harmony in the supply chain for
most of the past decade, so the need to identify alternative suppliers has
not been as pressing as it is now,” says Mike Thomas, vice president and
global general manager at Classic Components, an independent distribu-
tor based in Torrance, CA. “That means many companies have not invest-
ed a lot of time or attention strategizing about how to use independent
distribution channels effectively.
The process begins, he says, with understanding how to distinguish one
independent distributor from another. This often comes down to a mix-
ture of experience, reputation and the extent of the supplier’s global sup-
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TEC Magazine • March 2019