Digital Innovation: Improving Workflows Through Collaboration, Data, and Solutions | Keynote Panel - AltiumLive 2022

Ashley Quinlan
|  Created: February 3, 2022  |  Updated: February 27, 2022

This panel discussion brings together stakeholders from unique electronic industry perspectives, including distribution, component manufacturing, digital component aggregation, and electronic board manufacturing with a forward-looking mindset to provide insights that will aid engineers in their day-to-day supply chain challenges.

Keynote Highlights:

  • The importance of how we share data
  • Considering supply chain in the design process
  • The evolution of tools
  • The democratization of data

Additional Resources:

Transcript

Narrator:

Ashley Quinlan oversees the global distribution channel and digital marketing for Samtec her vision for the evolution of the customer journey has propelled Samtec as a leader in the digital space with unprecedented growth. Jackie Mattox is the Founder, President and CEOs of Women in Electronics which is now a global nonprofit organization. Jackie was named as one of the top 21 female influencers in September, 2021. Dave joined Digi-Key Corporation in January, 2008, bringing with him more than 35 years of electronics industry experience in semiconductor suppliers and distribution. He was named President and COO of Digi-Key in July, 2015, and served previously as EVP of operations. Chris is the co-founder and chief product officer at MacroFab. With over 20 years in technology development and leadership, he has led companies in the SaaS, robotics and manufacturing spaces. Dan has overseen tremendous growth at Octopart since joining Altium in 2017. Prior to Altium, Dan was part of the digital strategy group at Arrow Electronics and led strategic supply chain operations at Flextronics for customers such as Hewlett Packard and Juniper Networks.

Jackie Mattox:

Okay. And welcome to our panel discussion for digital innovation, improving workflows through collaboration, data and solutions. We're super excited today to be here with our panel. So what we're going to be doing is bringing stakeholders together from a unique electronic industry perspective including distribution, component manufacturing, digital component aggregation and electronic board manufacturing with a forward thinking mindset to provide insights that will aid engineers in their day to day supply chain challenges. So with that, we are really excited to get started. But first I wanted to let you know that you may have questions as we're talking, please chat in or actually use the Q&A to submit your question. We really want to get to them. We will probably answer them at the end so that we can have a discussion with the panelists that's free flowing and we'll be happy to answer your questions at the end.

So with that, all of the panelists that you see are a curated collection of individuals from companies that have chosen to collaborate digitally to improve their user experience from design to manufacturing. So with that, we will get going with our discussion for our panelists. So I think we've already introduced them in the prior video so here we go, we will just get right to it with Dave Doherty. So Dave, how have supply chain issues affected Digi-Key and what are you doing to overcome these challenges?

Dave Doherty:

What supplying chain issues Jackie? Are we having some unusual circumstances? I think many of us have been in up cycles and down cycles but this one is clearly unique. While oftentimes it's one factor, a spike in demand for cell phones or computing devices or a volcano eruption or a flood might cause this, we're having a confluence of more factors now than I can ever recall. And so we need to be aware of that first and foremost because this is different. For Digi-Key in particular, we're an inventory available model. It's not unusual to have our turns at less than one and a half. That means in normal times we'll have nine months worth of inventory on the shelf primarily to support the design engineering community, this design engineering community.

But like I said, it's different and for the folks on the call, I'm already kind of getting a sentiment that, "Hey we're not getting the parts that we need." And I think that maybe the caveat is we're not getting all of the parts that we need because I do want to frame it by highlighting that for us, I took a look and we've received 45% more product in 2021 than we did in 2020 and Digi-Key has shipped about 60% more units out the door in 2021. Now, was it enough? It's not nearly. Do we have a big backlog right now? Yes we do. But the partners, folks like Ashley's company and others have done just a tremendous job trying to keep up with this shortage situation. And again, for us, the fastest area for growth is those small shipments, the shipments going to our audience today to keep that innovation alive. And maybe with that, I'll pause and let our other panelists weigh in on these unique times.

Jackie Mattox:

Right. So Ashley, what do you have to say? What are you seeing from your organization?

Ashley Quinlan:

Yeah. We've seen of course the same shift that everybody else has seen. Prior to the pandemic hitting, Samtec's statement for years, our brand promise has always been incredibly short lead times and just the highest level of customer service that engineers have come to expect and for us, that looked like three to five days before the pandemic. I mean at the beginning, of course, the supply chain challenges were people, right? It was challenges worldwide getting people into our manufacturing facilities. And then what we've seen in the last year is we're not having the government shutdowns. We're not having the issues with quarantines that have affected capacity but really now it's raw materials.

So we've got all of the people waiting, ready to build things but the raw material challenges have inhibited some of our capacity in certain products, in certain parts. So what Samtec has done to shift and pivot and still support is really we've looked at, we manufacture over 500,000 active part numbers at the moment. So we've got over 200,000 part numbers today that we have just ramped up inventory that we make available to all of our channel partners and that's available for same or next day shipments. So we're ensuring that we're still enabling engineers to get the products that they need for those early prototype designs for the small volume business, anything that our channel needs to support their customers.

And then that long tail of parts that really we've only got one customer, two customers that are wanting a particular configuration, that stuff has gone out a little bit. It's not three to five days, it's more like six weeks. However, what we've also seen is our customers have done an excellent job of planning ahead. So even when we're saying six weeks, they're saying, "You know what? We've ordered quantities that we don't need for 12 or 16." Because they're aligning their orders with Samtec with the rest of the products that they need on their bill of materials. So I can't commend the folks at Samtec enough in our operations department for shifting our model so quickly to be able to continue to deliver but it's definitely changed the game from where it was a few years ago.

Jackie Mattox:

Wow. Really good input. Chris, do you have any insights from your organization as well?

Chris Church:

Yeah. And I think Dave hit the nail on the head earlier. It's not that everything is unavailable, it's that there's always just a few things that are unavailable. So, I hear from a lot of other manufacturers, "Hey, I can't buy parts like I used to but I've never had as much inventory as I have right now because everything is waiting on one or two parts." And that's pretty much across the board. One of the really interesting things, we work with customers who can come and upload their designs and get that supply chain information instantaneously. And if I look back to 2019, I would see on the average design being uploaded maybe 20% of them would have a defined part unavailable.

And what we're seeing now is 95% plus of the designs that are being uploaded to our platform have one or more components that are just not available. And I don't mean, "They'll be out of stock for a week." They may be out of stock for 52 weeks. And so we're really seeing a lot of customers trying to find ways to get those materials. What they always want to avoid is that redesign. Anytime we can avoid a redesign whether we can do form fit function alternatives or et cetera, that's really a benefit to the customer. So we're having to take a dual pronged approach. One is to give the customers better visibility in the supply chain earlier in their design. And we were talking about that at the last keynote with Altium Designer, really bringing that information in upfront in the parts manager.

But now also once they've gotten to the point, this product is in production and there's one or two parts missing. We've had to actually put together special sourcing teams that work with people like Dave and Ashley and other manufacturers to try to find material availability. Because sometimes our customers can't really tell their customers to wait a year for their product, right? Everyone needs something going out the door. So any of the tools that we can put together to help them develop a new strategy, they're all being deployed right now.

Jackie Mattox:

Wow, really good information. So it sounds like you're working collaboratively with your channel partners to make this happen. So Dan, do you have any comments on that?

Dan Schoenfelder:

Yeah. I would say at a macro level, a lot of the trends that Dave, Ashley and Chris have talked about, we're seeing certainly at Octopart, we're seeing that searches are up tremendously over a year ago, over two years ago. We're also seeing that with our API as well too, that calls to our API are up tremendously as well too. And so, I think unprecedented is probably a little bit of an understatement to characterize the activity that we're seeing. That said, I want to kind of talk a little bit, dovetail on what Chris was mentioning, that I think the silver lining to some of this from a part data perspective is that right now we're living in a time where there's never been more access to part data and part information than there has been in the history of this industry.

There are tools that are being developed across the board and I think that the organizations that are represented on this panel have made a conscious choice to partner with one another digitally and to really... The phrase that I like to use and I know we've thrown around in conversation is, we want to democratize information so that it can be pervasive and available in the workflows that people are accustomed to without them having to change that workflow to make their workflow more, more efficient. So, I think there's a silver lining here to the fact that these shortages and the circumstances we're finding ourselves in are actually creating innovation with companies that are forced to find more creative ways to solve problems and to do so with data driven approaches. And to me, that's, I think, going to be an exciting progression that we'll see in this industry for the foreseeable future.

Jackie Mattox:

Okay, so questions on that. So, that segues me to my next question though so Dave, I'm going to circle back around to you again because for the engineers listening right now, what role do they play in, say, Digi-Key's day to day decision making? And how do you utilize a company like yours that is so eCommerce driven, how do you stay connected to what their needs are and their future needs?

Dave Doherty:

No, you bet. That's a great a question, Jackie. And when I joined Digi-Key, the joke was I've known the company but I've never met anybody from the company and it's kind of the nature of an eCommerce company. But in today's world, the power of information and seeing what people are looking for and what they're not able to find, what pieces of information, et cetera. So I think we work hard to try to triangulate on where the engineers are going. For instance, one of the things we hear is the parts are important and we want to find the parts there but we also want to find the information around it. And so, how do we collaborate with Dan's tools so that Chris sees the handoff of that information that we receive from Ashley?

And I really liked what Dan called this, democratization of information. And so we start to get a picture and the four of us are all on that same side, the same team to support this audience out there to figure out how do we understand your needs and how together do we create an environment to serve that?

Jackie Mattox:

Really good feedback. And I'm sure a big part of this, I'm thinking of the engineers right now on call, they're thinking of NPI. What is that next step? And how does that look? So maybe I'll turn to you Ashley because I'm so curious about this, how does Samtec determine NPI? How does this work for the engineers listening? Where are they in this process?

Ashley Quinlan:

Absolutely. So, we harness quite a bit of data when we talked about exactly what Dan and Dave just said that data sharing is so integral to everyone's success right now including the engineers, right? Because they've got to be able to rely on the integrity of the data that they see on Octopart or that they see on Digi-key. And really the true heroes in my mind of our success during this pandemic has been our data architecture team at Samtec and what they've built in terms of just our real time API network to be able to fuel a lot of the engines where the engineers are getting that information has been key. And as that plays into our NPI program, partners like everyone on this panel that understand the value of sending that data back to us, sending that data back to Samtec, that activity from the engineers is really what drives so much of our decision making around a new product, around what engineers are looking at, what they're interested in.

So even on the digital side, when an engineer is working from home and they aren't necessarily in front of a Samtec sales rep or a Samtec engineer or any of our channel partners engineers, when they're clicking on pages, when they are downloading models in Altium, when they're doing any of those things, their privacy is absolutely being protected but that activity rolled up in aggregate is the information that's being fed back to Samtec and we use that every day to justify investments in certain areas, in certain product categories. And then we also take all of the information that we hear in the field from the folks that are working with our teams as to what they need in order to innovate. So, we use all of that to drive those decisions.

Jackie Mattox:

Well, that's really good information. So I wanted to circle back a little bit because I do think that we're talking about a lot of collaboration. We're talking about tools, we're talking about progressive ways of getting us ahead of some of the issues we're facing now. But part of this is what is MPI? Dave, we've talked about this before and just the full breadth of that conversation of what is MPI. But how does Digi-Key look at that, Dave?

Dave Doherty:

Yeah. NPIs are a lifeblood. To this audience, I think to the the panel here, you guys are where it matters. We're not looking at, any of us, the volume shipment into an autonomous vehicle. It's how do we keep you alive? Because I think our partners recognize. Samtec clearly knows there's a volume today but equally important, there's a volume tomorrow to serve, there's new designs. And so I think we're passionate, it's not an understatement to say that we know we need to support you and I can tell you that for 800 plus suppliers that we deal with, they respect that. And so we work with them to say, we're not looking for a gazillion parts, we're looking for enough to keep that lifeblood flowing and they're very receptive to that and know how important that is.

But NPI, I'll tell you, is also more than the physical parts. They want the information, our audience needs it. They want the footprint, they want the schematic symbol, they want to know other information around the part, risk assessment. And that's where some of these other partners come into play and why we share that information. And it's a great point, Ashley, in an aggregated format, not with any kind of proprietary information shared so that we can make that ecosystem easier because the last thing an engineer wants to do is have to go to four or five, six different sites to piecemeal all that information together.

Ashley Quinlan:

Absolutely. I'll jump in and just piggyback on that. Something that's very much shifted in our strategy at Samtec over the past few years has really been when we're choosing our partners and whether that's a channel partner, whether that is a media partner, folks like Dan's company, anytime that we are engaging with folks, the ability of those partners to be able to ingest data and then also return data is key and that's really how we are choosing our strategic partnerships today. And that's been a big shift in the past, I say a few years, I've lost a few years during the pandemic though so maybe five or more. But yeah, it's been a big change and I think that's really what has saved us in the past few years because we had that underlying architecture in place before this hit and we've just seen it take off. It's been pretty wild.

Jackie Mattox:

That's really interesting. I just wanted to ask you another question on that though, Ashley, because I know you have a ton of part numbers and you have all different variations. So maybe you can just get into that a little bit, how does that relate to NPI or are there just different variations of parts we're not even aware of that people should be looking at? Maybe I'll just turn that over to you real quick.

Ashley Quinlan:

Yeah, absolutely. Around that whole theme of customer service, right? On one hand it's 24 hour quotes, on the other hand, it's the short lead times. It's the things that have really been around for since Samtec's inception 40 plus years ago that have stayed with the company and we still incorporate that today in NPI. So when we release a product, you don't just get three flavors, it's exactly how you want it. It's so many different permutations of a single part number based on exactly what an engineer selects. And we often get the feedback, "I'm building a custom here. I'm choosing from so much. I don't want..." Customs can kind of be scary, right? Because it's long lead times or extra engineering charges. Those aren't customs for Samtec, that is very much the baseline of how we release product.

It has to be flexible in design to meet exactly what the engineer needs for the same reason that Chris was saying earlier. We don't want engineers to have to go back and redesign their boards to fit in and interconnect that they might be bringing in at the final phases. So having that flexibility and then having the tools to allow engineers to quickly configure what they need, download models immediately, search and not have to find one piece and then go back and re-search for the second piece. We've got one of the only search capabilities where we're when you search it actually returns the set. So I mean, those types of tools have been key for us in supporting that engineering audience.

And then making those tools available to all of our partners so that they can put those on their own websites or in their own environments is something that we do as well to ensure that that engineer is going to get the best Samtec experience, no matter where they are off of our own website facilitating their design or procurement process.

Jackie Mattox:

So that's a really good point because I think Dave, we had about this before with even packaging. Somebody might have a different packaging and maybe you can get the part but it's different packaging so there's those issues as well. But Chris, I wanted to ask you in having this discussion, how does this relate to the engineers and how they're now aligning with production? Maybe I'll just turn it over to you.

Chris Church:

Yeah. So one of the things we used to think in the past was that there was engineering and design and then there was purchasing and production and those were two totally separate worlds. The engineer would throw a design over the fence and, "Hey purchasing, have fun with that." And we've seen some places where that does still happen but the reality is the engineer's really involved today at every level of the design or the life cycle of that product and I think the current shortages we're dealing with really help to highlight that. If I were to look back in time again, go back to 2019 and earlier, I might have 1% to 5% of our products in production have to face a redesign for some issue. Now we're facing 35% typical in-production products facing redesigns for lack of available components.

So when we think about that, when an issue occurs in production, if we go back to the old world where you go back to a purchasing team, they're going to try to figure it out themselves and then maybe go back to the engineer. We could be looking at weeks in resolving an issue when sometimes these parts are only available for a few hours. We can find, for example, you have an alternate on your device. We couldn't buy the other one but we can get the alternate. We've got three hours, right? If you've got to go all the way back through multiple hoops to get back to that engineer to approve that alternate, you could now be facing outage, you're not producing your product. So for us, it's really important to recognize that the engineer is an integral part of the production team, not just the design team and to make sure that they have the tools to work with those production team to respond to issues very quickly.

And again this has been one of the things I love about the world we're in now when we talk about, as Dan mentioned the democratization of data, by having these data connections between us and Digi-Key, Digi-Key and Samtec, Octopart even down to the Altium designer, now we can start working with engineers and purchasing teams right where they're used to working and have that information flow in real time to all the other different teams. And that's really, I think, the future of an engineer is not someone who kind of sits in a box and just designs products but they're ones that help interact and help drive the success of their products at every stage of the design and the production.

Jackie Mattox:

Yes, it's just much more complicated. Dan, I'll turn it over to you to comment.

Dan Schoenfelder:

Yeah. I'd reiterate what Chris is saying here. I think the role of the designer and the engineer is transforming as we've seen these market conditions as they are. That there are so many other factors in play when a design is being at a point of inception or being released to production to ensure that it can be built and it's life's cycle will be supported. I feel like the new business unit that we've created at Altium and Nexar, one of the goals that we've had around that is taking this concept of having these disparate domains of expertise, be it design, be it supply chain or manufacturing and really fusing together those disparate domains through partnerships, through tools and through integration of information.

And I think that you're finding that information that typically was very much siloed to a supply chain domain is now readily available in a design tool, is now readily available in Chris's manufacturing experience. These tools didn't exist five years ago and I don't think we imagined the need for them 15 years ago. And I think it speaks to the evolution of where we're headed in this industry to really, again, break down the barriers between what has been viewed as these domains of expertise and domains of function and really bringing them much more close together.

Jackie Mattox:

Okay. Well Dan, thank you so much. We'll just keep allowing attendees to keep submitting your questions and we will get to those at the end here pretty shortly but I have a couple more questions for our panelists. So, there's a lot of stakeholders on this panel. Ashley, I'll just turn this over to you first to answer. What do you leverage to get your products in front of design engineers? So here we are, we have a lot of engineers on call. We have a lot of people in the channel both trying to connect but how do the engineers participating and hearing from you today know how you're getting to them? What is that line of communication?

Ashley Quinlan:

Absolutely. So every engineer that you talk to is going to have a very different process, right? A different site that they prefer to start search or where they prefer to get their data or their models or their information. And this is where Nexar has been key to us from a strategic standpoint and such a strong partner in helping us reach engineers. And honestly, I see the role of Nexar just becoming even more important into the future. And that's why they're such a strong partner for us in terms of just the vision for where the industry is going. We can't go, Samtec cannot go, to every individual place that an engineer likes to absorb information even sometimes in their own companies, right?

Companies have their own inside libraries or repositories of information that they use and this is something that Chris and I have spoken about before. He doesn't have the resources or the bandwidth to integrate with every possible supplier like Samtec and everyone else to call our data direct and to get that to the engineers that are using his resources. So when all of us come together as an industry and find these really innovative partners like Octopart, like Nexar, that we can give our data to and then trust them and their network of partnerships to get all of our data out to those engineers, that's key for us to be able to leverage those types of relationships so that engineers, whenever they come across Samtec information, they can trust it.

They know that if they see there's this much in stock or the price is X or Y, they know that, "Okay, Sam tech has a lot of data integrity. This is probably real live data. This is being fed by the Nexar network." That kind of stuff really builds that trust with the engineer that they can rely on the data that they're seeing. And then it helps us get that out to all... We can start with one partner and then see our data just kind of go from there. And understanding those data networks is also key to that strategy and knowing who's integrated where and what we're feeding with that pipeline.

Jackie Mattox:

Really good information. Dave, do you have any comments on that being a partner?

Dave Doherty:

Yeah. A couple things I was thinking of, it used to be maddening for engineers when they have rev control issue. "Hey, I got a data sheet but it wasn't the same revision when I went to another other site." And hopefully, and we'll get some feedback from this audience that they're not seeing that anymore. A lot of that content that we may curate comes directly from Ashley's site that we link toward. And then through an API, we make sure that we feed it through Dan or make it available through Chris, no one benefits. It used to be a war to say, "We want everyone on our site and we'll try to monopolize that." It's not realistic, it's not practical and it's not what the engineers want. So oftentimes it's that they can count on it, it's the identical information that's available so it's not necessarily as critical. Your entry point is that you're satisfied when you're at that point that you get access to what you need.

Ashley Quinlan:

Absolutely. And kudos to Dave for having that vision and that understanding because I can speak for Samtec when I say Digi-Key was the first channel partner that we had that really embraced and understood that and took data in a very direct feed from us. And didn't say, "No, give us all of the content on 500,000 parts and please let us load that up on our own sites and try to maintain it." I mean, we have vendor pages where if we change a print, it's live on Digi-Key immediately. And that's why these partnerships are so key to help support the engineers and support that audience that needs that data.

Jackie Mattox:

So basically what I'm hearing a lot of is partnership, trust, collaboration, really need to be working with channel partners and organizations moving forward that have relationships and that connect with each other and that are collaborating is so key. Dan, it seems like you want to say something so I'll turn it over to you.

Dan Schoenfelder:

No, I appreciate you sensing that. Yeah, most definitely. I think that this is a space where the tools, the individuals, the process that we've built inside of Altium, I think it's unique in that, and Dave kind of hinted at this as well too, this is not in service of exclusively Altium designer and the Altium design community. It's not done in service of just Octopart as well too. This is done in service of an industry. We realize that there are countless workflows that happen out there. And these workflows have very unique, intense and outcomes that are resultant of them. Really, the network of information that we're trying to enable here is designed to fit seamlessly regardless of what that workflow is, regardless of the tool sets.

And I want to give kudos to my leadership at Altium for having that vision of supporting an industry and supporting specifically the user and having them be front and center of mind rather than owning an audience or rather than owning content. The goal again is to get it into those workflows and to support the industry while we're doing such.

Jackie Mattox:

Awesome. Well speaking of tools, I'm going to ask Chris, I'm just going to ask you a question. How are you now automating and digitizing the experience of building prototypes and production runs? How is this impacting you, Chris?

Chris Church:

Yeah. For us, the vision was always to have manufacturing more like a cloud service. That is something that was elastic, it had real diversity in your supply chain so that you weren't tied into kind of one skillset for one product here having to go work with another manufacturer for another product over there. So for us, it has been really about mapping the requirements of the product in real time through a software driven experience to the capabilities of the factories and the material suppliers that are necessary to facilitate that building. So, that all starts with the design data and that's part of the reason why we've worked so well with Altium in this regard here is through the Nexar system, they've had the same vision that we need to kind of get out of the translation and zip file world and into direct data sharing about how to build a product, what the design intent was and taking that in in real time.

And then, at the same time, having great partnerships with Digi-Key and through them to Samtec where we can now start piecing together the different bits it takes to actually assemble that product in real time and give them that feedback. So, within moments of someone, for example, uploading a design to our platform, we can start giving them costing feedback because we have all those connections in real time. And when things change underneath, right? When a part becomes unavailable, when a factory is now no longer available for new production, we can take all that in in real time and very quickly help our engineers and our production customers route to the right workloads. We've been hearing today, the biggest thing we're hearing from everyone is supply chain diversity. They were single sourcing through an individual manufacturer for years and years because they were getting great cost out of that.

But now with shipping containers being where they are, different lockdowns in different countries, they're finding a lot of risk in this position and there hasn't been a backup plan, right? Because I can't just go find one more manufacturer and get in the same position. So we're working with a lot of companies at the production level to be able to manufacture the same product in multiple locations either in parallel or serially based on their demands and based on how the market is changing underneath them, right? If we now have shipping issues between two regions, can we redirect that workload in real time to a third region without that issue? That's really our vision and what we're working with our customers to enable them. If I want one prototype, there are many great shops that can produce that but can I get access to them right now, right When I'm done with my design?

We make that promise of reality for them but then as that design moves into production, it is really about retaining all of that knowledge so they're not starting over again. And we're able to carry all that knowledge into that production factory so we're able to build on all the experience and all the interaction we have with that engineer early on.

Dave Doherty:

Hey Jackie, if I can comment, I'm trying to put myself in the shoes of our community on the call saying, "Hey, this panel looks great. Everybody's smiling. How come I've been under more stress than I ever have my whole life? It doesn't feel as rosy." And I think if there's any call for optimism, I'll go back to what Chris said earlier, is that systems when they're stress tested that's when innovation comes and things propel forward. We think we put some good tools in place listening to our engineers? Clearly we haven't stress tested the supply chain to the extent that we have in the last two years through that convergence but I think we're going to come out of this.

I like how Chris's comment said, a lot stronger than we went into it, keep your voice loud and clear in front of any of us because what you need to know is we're champions of your efforts and we're working together to improve. The world's not static, we're at a certain place now it's gotten better and it's got a long way yet to go.

Jackie Mattox:

Really good.

Ashley Quinlan:

Absolutely.

Jackie Mattox:

Ashley, I'm sorry. You want to comment?

Ashley Quinlan:

No, I was just saying absolutely. Yeah. No, very well said.

Jackie Mattox:

So I have a question, okay? So piggybacking off what you said Dave for our engineers listening, say we have a fairly new engineer that doesn't have all the existing knowledge of the industry and the relationships and doesn't really know all the tools as of yet, if looking from that perspective, how can they access all the analytics and all the data and all the tools that have this built in now? Where do they start? A brand new engineer who wants to design a product, how do they know where to start to access all of this?

Dave Doherty:

Yeah. I don't know if there's a simple answer Jackie, because some folks, they have a design in mind and they're trying to determine what type of controller technology or what sensor technology is out there? And you may follow another path. There may be someone else that says, "I have no idea. I just want to get an idea of what type of a system could even satisfy?" "I'm a marketing person. I've got this brilliant idea for a product but I don't know where to start." So, I think the four of us are not a bad place to start but also know that whether it's any of us or others, we're here to assist and guide. When people come to us and say, "Hey, I'm looking for partners. I've got a good design opportunity but I don't know where to take it for manufacturing." And that's where we try to connect you to a Chris.

We see information around, "You know what? We're trying to do with things with slim headers or other interesting technology." And it's Ashley. "You're looking for a site where you can compare, you can contrast, you can get a wealth of information." You've got that in Octopart. And so I think that's a multi-headed beast. The big dilemma that I see for a new engineer is you're trying to balance this chasm. Ashley hit on it, that companies want to give you the diversity of product when you need that little bit of differentiation that makes a difference but you also want standard products, the most standard in other areas that minimize risk. So how do you balance risk and innovation? And that's where again, I think the tools that we've discussed here will help you get there.

Jackie Mattox:

Wow, really good comments. Does anybody else have any best practices for engineers in this regard?

Chris Church:

One of the ones I want to throw out there real fast is get that supply chain level feedback as early as possible in your design. Don't make it all the way through to the end where you've designed this perfect product and now you're starting to look in there and see what's available to you and realizing that half those things are not there. They're not readily available in the market. The sooner you can start as you're working through your design, whether you're looking it up on Digi-Key or on Nexar and Octopart or anywhere else, try to make sure that your design is actually feasible as early as possible in that because there's nothing more frustrating than getting to the very end and realizing you're missing key critical elements and you've got huge work to go back and re-do all over again.

Jackie Mattox:

Very good input. And Dan, I'll turn it over to you real quick too because you've said that online search is a leading indicator of demand. So can you tell us a little more about this, Dan?

Dan Schoenfelder:

Yeah, I'd be happy to. It's something I feel pretty passionately about. Obviously, we have a lot of searches that come in through Octopart as a site and then also a lot of queries and calls that come to our API as well too. And we talked a lot about data today but I think a lot of the data that we're talking about thus far has been static data. And when I say that, I mean, don't get me wrong, inventory and pricing is going to fluctuate but when we're talking about part specifications and data sheets and CAD models, these elements are relatively static pieces of information. What really excites me is the direction and in some ways that we are definitely taking when it comes to providing intelligent solutions and how to make decisions on component selection, on part discovery and search.

And to me, what that means essentially is turning this next generation of tools on its head where it's going to be very largely rooted in the activity that we're seeing and the indexes that that create with regard to part categories, their popularity, specific values of components and their popularity and that the risk that that inherently presents in new designs. And so I'm extremely excited about this, if we look at the data that we have going back to kind of the beginning of the severe shortages we saw that started a little bit more than a year ago now, the search signal was there. We knew that something abnormal was happening with micro controllers. We knew that something abnormal was happening in search activity and part discovery for a number of categories.

So, I'm encouraged again and I'm optimistic that the tools that are being developed are going to help even more in the future. That it's going to take that signal, that front end signal, that's coming from search journeys and turn that into usable analytics and decision making criteria for folks that are designing products.

Jackie Mattox:

That's really great. I think that what I'm hearing too is, and we kind of addressed it, Chris, you said it as far as 95% of a lot of the bill of materials that are being uploaded need an additional part that are just not able to be found. So I think that is such a critical point. And then you also said, make sure that you are addressing the supply chain issues, the availability of the parts on the front end. That means we need alternative parts on the front end, right? So how is it that engineers can do that? How is it that they can look at their bill of materials on the front end, research what parts are available or not and come up with those alternative solutions? Obviously going back to what Ashley said, they have to be flexible in their designs, right? At this stage? So can you just comment to that, Chris?

Chris Church:

Yeah. So I think it's great that we have the panel we have here because both Dave and Dan and in our platform all have excellent tools to enable you to look for similar parts or related parts. I can go Digi-Key and select some attributes and match on those, right? When I'm starting with a part that I have here. One of the things that we've recognized in particular is that engineers that are working for a company as part of a team, a lot of times they'll work within sort of like their individual silo. They'll solve their own problems and then everyone else is kind of left to go fend for themselves. But the best companies, they don't do that, right? So at some of the most advanced companies out there, they'll share part libraries whether it's through the Altium part library or through their PLM systems and they'll use internal part numbers and map those to form fit function equivalents.

What we've been able to do to help our companies do as well on that same front is to take that information in real time to all of that company's products in production. So when one product is facing an outage and an engineer solves that problem, it's automatically shared with all the other products in production at different factories. So if material becomes low for one product there, it can immediately pull in that shared information from the other designs. And so, to reiterate that point, an engineer is really engaged at so many points in the production cycle but they're also engaged together as a team as part of a larger organization. And as we, to again use the phrase that Dan used earlier, democratize that information wherever it's necessary, they can discover it very easily using the tools that the people in this call have given them. And then they need to be able to act on that in real time and share it with the rest to their organizations. So, from my viewpoint, that's very critical.

Jackie Mattox:

Very good point. I don't know if anybody else has any more feedback on that but I'm just so curious too. Say you're an engineer from a smaller organization, do you have the same access as an engineer from a larger organization? Some of the engineers might fear they don't. Dave, I'll turn that over to you.

Dave Doherty:

Yeah. No, I'm excited about that question from the sense that earlier in my career as an FAE for semiconductor manufacturer and frankly, the answer to that at that time would've been no. That you got to chase the dollars, you go to the bigger sockets. And the best part about these web-based tools is they're not look up your domain name or your address and saying, "Sorry, I can't help you." That information is there for all. And so I think that's the most wonderful aspect about the period that we're in right now.

Jackie Mattox:

Very good information. Anybody else have a comment on that?

Dan Schoenfelder:

I would just add onto that too. The barriers to entry are extremely low for a lot of this high powered decision making criteria when it comes to part selection. Essentially there's just a ton of free experiences out there with a lot of rich content and information. And I think it empowers engineers regardless of the organization size they come from and potentially regardless on the maturity and skills that an engineer has as well too. It's very much levels the playing field and I think it's going to help drive innovation.

Jackie Mattox:

Well, I agree with you. And I think a lot of the engineers that are listening are probably very concerned with the integrity of the data. So there's a lot of data out there but how do they ensure that it's real time and there's integrity? So maybe that's where these tools help out as well. But, Ashley, I know you have a lot of tools within Samtec, can you speak a little bit to that as far as the up to date information and the integrity of data?

Ashley Quinlan:

Absolutely. Our tool evolution has exploded in the past decade really around looking at what does that process look like? Chris touched on it, you can't think about the supply chain at this phase of the game. You've got to be able to consider that early on in the design. So creating tools that... I almost hate the word tools because you hear that and it's like, "I got to learn something new. I'm going to have to go through the training and the video tutorial." I almost shy away from that word. It's more like, we've made the experience so user friendly, let's just not even call it a tool. When you get to the website, you're going to click through and go, "It's so nice." I don't have know the details of the interconnect that I'm looking for because isn't this so convenient that I'm really just describing my application and they're going to serve up set that's going to work in that application?

And with that, it's not just, here's your part number but it's also, here's the lead time and volume, here is all of the stock that's available anywhere in our distribution channel right now. Click this button if you want a free 24 hour sample shipped out the door today. Here's all of the 150 different model formats that we have for both of these part numbers that you can download and you don't have to bend over backwards or install these plugins or whatever else to get access to these things. We've just really tried to make that experience so seamless and any aspect of that data is powered by that data architecture team that I told you are really the true heroes of my team, at least when I'm trying to accomplish these things.

And then we look at our partners like Digi-Key, like Octopart, anyone in our network that wants that data to either power their own tools, power their own parametric search or iframe any of our tools into their sites. Anything that they want, we've really shifted our mindset years ago from designing for samtec.com to designing for everyone. Any way that someone's going to want to ingest this capability, let's think bigger picture and design for that and then we place that data wherever it needs to go to ensure that whatever that experience is that we want the engineer to be able to have, they can have wherever they're engaging with Samtec information and Samtec parts.

Dan Schoenfelder:

Yeah. Can I add something to this as well too that I think has been somewhat of a game changer. When I joined Altium almost five years ago, every single partnership that we had with a component manufacturer, with a distributor and kind of that supply chain partner side of things, any data that we received was via a flat file at that point in time. And today, the pervasiveness of APIs, the investment that companies like Digi-Key and Samtec have made in technology to enable real time access to information, that's very much a game changer. The search experiences at Octopart are the ones that Octopart has powered historically, again five years ago, you were getting information that could be up to 24 hours behind and in some cases worse. But now you see up to the second real time information from Digi-Key.

You're going to see that again in the Octopart experience. Digi-Key is enabling that in the MacroFab experience and Samtec the same. So I think that the technologies that are being adopted, specifically APIs, are creating that part data that is quite dynamic these days. It's allowing users in a lot of different places to see and have access to real time information.

Jackie Mattox:

Well, that's a really good point and really, we only have time, unfortunately, for one more question so then we can do some Q&A with our guests. But I just wanted to ask because I know going back so many years, we all remember this, engineering and procurement were so different, two totally different departments, and they really didn't coordinate too much. Now, in our world moving forward, it has to be connected, right? We have to connect our supply chain as we're talking about our procurement with the engineering process. But are we seeing that actually happen? From your perspective, are you seeing that that could be some of the barrier with some of the things going on? So I'll turn it over to somebody. Chris, maybe you first. Do you see any of this actually improving? Because I know it was a big gap way back when and it's coming closer and closer but are we seeing that these companies are actually forging those together?

Chris Church:

Personally, we are seeing it. The companies kind of have to now, they have to get over those barriers simply because, as I had mentioned earlier, the landscape is changing so rapidly under the purchasing teams that they really need the support from their engineering teams in real time. And I think it's on us, the people here on this call, and the engineers too that are joining in to all work together to help make that happen. It's like anything else, we're only as collaborative as we each individually go out there and push for. We can't wait for supply chain to come to us and ask a question in many cases. But if we go to them and say, "Hey, I'm seeing some things like this, here are some opportunities we have to do some re-designs or to adjust our alternate lists."

Certainly and I think that's the way everything is going, the tools are going that way, the systems are going that way. And not just the companies here on this call today but I'm seeing this all over the market whether it's your ERP systems and your PLMs, they're all moving to a more interactive engagement between all the parties in the product.

Jackie Mattox:

Okay. Well, so what I'm going to do, unless anybody has any other thoughts on that. Dan?

Dan Schoenfelder:

Yeah. If we're wrapping it up, can I ask a question Jackie? Is that okay?

Jackie Mattox:

Yes, you may.

Dan Schoenfelder:

Given that we have this audience here and I'm sure there are a lot of folks that are listening in that would love to know what the stakeholders on this call think about what's going to happen over the next 12 months particularly in the component space? So I would turn it over to anybody that wants to start that off.

Dave Doherty:

I was waiting for that question to come up, Dan. I figured Jackie was holding for the zinger at the end. And if we could answer that with specificity, we probably wouldn't here.

Dan Schoenfelder:

I'm sorry.

Jackie Mattox:

It's okay.

Dave Doherty:

You know what? But I think the guidance is to hope for the best but plan for the worst because I could argue both sides to that. There's enough manufacturers that are telling us we are completely booked out for 2022 and beyond. That you have to take heed. Now I'd also tell you though that in every up cycle I've been in, people project further out because as, as Chris mentioned near the beginning, people are saying I have more shortages than ever but my inventory's higher. We're human beings and that scarcity mentality really mucks this thing up as people grab what they can get whether they need that much or not. And as soon as the confidence level starts to shift, this thing can turn very quickly.

I think it's clear in our minds, we're in a very tough spot for the first half of this year. And by Q3 and Q4, there will always be some exceptions with certain technologies but again, don't plan on it and don't take my comments to the bank but I think there's reasons for optimism. People are working too darn hard to try to meet the demand for it not to happen at some point.

Jackie Mattox:

Chris?

Chris Church:

I am hoping with all of the great hopes that I have that we will start seeing improvement in Q3 and Q4. I am planning for this to continue on at least through the end of the year and I'm keeping a very, very, very cautious eye on the bull whip effect as Dave just mentioned. We had a huge problem with this in the great capacitor crunch, the passive crunch, of 2018 where I couldn't buy anything. And then all of a sudden, everything I had on the shelf was worth nothing, right? Because it was flooding the market, all of a sudden everybody was canceling their orders. So, that's kind of where we are. I think the real risk in everyone's mind is to be the last man standing on a pile of really expensive inventory and we're all trying to avoid that.

Jackie Mattox:

All right. So Ashley, any thoughts from you?

Ashley Quinlan:

I would say, on our side, we're doing very much the same. We're managing our own inventory and our own factory stock to be able to support our channel and then ensuring that we aren't too crazy about, of course, letting the channel load up in tons and now we're all sitting here in a few years and we've just got more stuff than we can ever stock, right? So, we're being very careful about that and leveraging the data that we're getting from folks like Dan to be able to make really strategic and strong decisions based on the activity that we're seeing from the engineer. What I will say about the next year, I agree. I think we're going to see pretty much more the same for at least the next 12 months. However in that vein of optimism, we're in a really unique position because at least on our side, on the component side, we've got more visibility than we have ever seen before in terms of predicting what the next 12 months.

I mean, we've got a backlog of orders that we've never seen scaled out this far and customers saying, "This is what my demand will be." So, we're in a really unique position where we're able to plan, we're able to see a little bit further out and that enables us to do so many more things supporting the engineer side, the strategic side, the tactic side, that we can plan around that. So, it's nice that we're not just operating three days, five days, a few weeks out. We can really embrace the fact that we have more visibility than we've ever had before and work with that.

Jackie Mattox:

All right, Dan, let's answer your own question.

Dan Schoenfelder:

Yeah. I'll tie a bow on this one. From our perspective, we're continuing to see the velocity of searches grow, it is not slowing. And that is something that is a trend that's been consistent for 12 months now. And so, at this point in time, the data signal that's coming in through search channel suggests that people are still having an extremely hard time sourcing components and it's showing in that signal.

Jackie Mattox:

All right. Well, thank you all the panelists for being here, for all of your insights. I'm sure the engineers that are attending right now appreciate it. We definitely look forward to taking some questions from the attendees. And really just to sum up, this conversation was so great. I think it's just the overarching themes that we're talking about. We're talking to about integrity of data, we're talking about collaboration, relationships, utilizing the channel and just partnering together in a way that we really haven't before. So, it's just a really exciting time. We do have all these tools now at our fingertips. So really great discussion and hope that anybody beyond this conversation, just reach out to the panelists as they have invited to ask them more questions. But anyway, with that, we'll get to our Q&A.

 

 

About Author

About Author

Ashley Quinlan oversees the Global Distribution Channel and Digital Marketing for Samtec, a $1B interconnect manufacturer known for superior service and bleeding edge technology. Her vision for the evolution of the customer journey has propelled Samtec as a leader in the digital space with unprecedented growth, and is responsible for Samtec’s place as the first manufacturer to market in many emerging platforms in the electronic components industry. Previously, Ashley held key leadership positions in sales and marketing with leading B2C companies including Maker’s Mark Bourbon and Kraft Foods, giving her a unique perspective on brand building, experiential marketing, and customer loyalty that she still leverages today.   

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