Let the Services Begin

Electronic News, June 18, 2001 by Heidi Elliott

Avnet Inc. last week threw its hat into the subscription-based services arena, announcing the launch of its first set of supply-chain management tools.

Phoenix-based Avnet Inc. (nyse:AVT) unveiled a host of bill-of-materials (BOM) services called BOM.Optimizer. This group of services is aimed at closing the information gaps in the electronics manufacturing supply chain. Avnet developed these tools using technology from its strategic alliance partner, SpinCircuit.

"We're building a set of services that will go from (product) concept to end-of-life," said Greg Frazier, Avnet executive vice president. The service is in beta testing with five of Avnet's customers in North America. It will be fully available on Aug. 1, and Avnet will be announcing additional services throughout the year. Users may choose a payment schedule based either on successful usage or on a subscription basis for selected services, but Avnet declined to be more specific on pricing.

BOM-Optimizer provides current information about a part or an entire list of parts. It has three components: BOM-Cleansing, which scrutinizes materials lists of partially identified products and returns valid manufacturer names, part numbers and descriptions; BOM-Matching, which matches internal part numbers across multiple cleansed-parts lists; and BOM-Grading, which evaluates products listed against a variety of indices, including suitable substitutes.

Arrow Electronics Inc. last month launched its own suite of subscription-based supply-chain services called Arrow Digital Solutions. Like Arrow's set of subscription-based services, Avnet has had this type of information available in more of a piecemeal fashion. But these services put together in a cohesive package are more useful in tracking supply chain issues and offer a broader scale of tracking.

"A good bit of this information has always been in residence at Avnet," Frazier said. "This will increase the efficiency of the sup ply chain by allowing the customer to deal with fresh, clean, factual information on the supply chain."

Part of today's supply-chain problem, distribution executives lament, is that customers don't have all the information they need in front of them. This lack of information causes a host of problems, including situations where one production site is looking to have parts expedited while another site within the same company is trying to return those very same products to the supplier.

"What we have to deal with (today) is the aftermath of the customer's forecast, Frazier said. "These tools optimize the supply chain that exists," until the fore casting mechanism improves.

"If we have learned anything from the recent turbulence in the electronics industry, it is that lack of knowledge is fatal," Frazier added. "The information gaps that exist between the design, procurement and manufacturing processes create obstacles that inflate production costs and cause products to miss their market windows."