July 13, 2011

Vendor Screening and Management Is a Must

There is a common misnomer in the electronic components distribution market. Just because an independent electronic component distributor operates in the open market, it doesn’t mean that they have an “open” policy when it comes to procuring parts. Although most technology-driven companies go to the open market to solve shortage electronic component or surplus electronic component problems at some point, some still think that independents simply click a button to purchase parts from anywhere in cyberspace – even from questionable sources. In fact, for most reputable independent distributors, nothing could be further from the truth.

At Converge, we have a very strict vendor screening and management program. Our commodity managers carefully screen each potential new supplier before any approved purchase is made. In most cases, this process qualifies the vendor as a potential sourcing partner, confirming that it is a legitimate company in good standing. Converge will not do business with vendors that fail this initial screening process.

Once a vendor makes it past our initial screening, it is registered as a new supplier in the Converge database. As an added layer of protection, every supplier is assigned a “new vendor” status for a probationary period. Throughout this probation, each supplier is graded on product quality history, performance and service fulfillment, stock supply/demand, and order history information. This information is visible on each vendor’s “supplier scorecard,” along with details about every Converge transaction with that supplier. After the probationary period, each supplier is assigned a status based on its performance. Thereafter, every supplier continues to be carefully monitored and could have its status upgraded or downgraded at any time.

Every time we purchase parts from any supplier, Converge utilizes a comprehensive 76-point electronic component inspection process to identify potential problems or concerns well in advance, before product ever reaches the customer. And we continue to make significant capital investments in the most advanced component testing equipment available, such as X-ray and decapsulation equipment. We leave no stone unturned when it comes to preventing substandard components from entering the supply stream.

Before your company works with an independent distributor, be sure to ask how they vet their suppliers. While vendor screening and management shouldn’t be an electronics distributor’s only line of defense, it should always be its first line of defense. In the open market, trustworthy distribution partners will go to great lengths to ensure safe and successful transactions for their customers. Your company should not accept anything less.

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