Rauf,

We buy parts in two ways, (1) small volumes for prototypes, and (2) large volumes on reels for automated assembly via {90% SMT:pick&place machines, convection ovens} and some {10% THRU-HOLE:manual placement, wave solder}.

TOPIC: (1) Components for Prototype:
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Finding the right chips:
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[Utilization 85%]
We keep bookmarks to all the chip manufacturers and regularly use their online data sheets and selection guides to look for new parts or new solutions for our circuirty.

[Utilization 14%]
We subscribe to about 40 industry magazines in various topics on eletronics, components, product, purchasing, electronics and even the industry of our major customers (for advertising assessments). We do find some new chips and components this way, mostly we find new companies to check out.

[Utilization 01%]
Reading the 8051 Forum we hear of new parts and solutions.

[Utilization 00%]
We subscribe to chip manufacturers' e-newsletters for new parts and announcements but they send so much worthless email we don't even read it anymore.

[Utilization 00%]
We get lots of mail from manufacturers and vendors about their products. We keep some on file but I can't think of a case wherein we got new information.

[Utilization 00%]
Some companies are having online seminars and product announcements via web-video. I've attended a few but so far consider then useless.



Getting data sheets:
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[Utilization 93%]
We use the internet to immediately download PDF files or view online specifications. We are of the opinion that if its not on the internet, it doesn't exist to us.

[Utilization 05%]
Phone and Fax, talking to designers about parts not yet released or about specifications not published or published in error.

[Utilization 02%]
Some items still require snail-mail and sales reps. We don't allow sales reps in our building, we simply don't like them. :)



Buying Prototypes:
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First, let me say that most engineers like to get free parts/samples from distributors and manufacturers as I have also done in the past. However, with my company we generally avoid this as they ask too many questions about our project and we find that paying for the parts is quicker, quieter and gives us license to complain when they don't arrive on time. We ask for samples when a part is too new to purchase (that alone is a large percentage of our development components.)

[Utilization 65%]
We use the internet and online pricing information for tracking product cost estimates, updating at least every two months. The distributor with the best apparent pricing then receives an assembled partial BOMs (Bill of Materials) for them to quote pricing on. Included are the parts they posted best prices on, other parts we'd like them to compete on and sometimes bogus parts we are really interested in.

The trick here is the balance of volume purchasing; if its something we know we'll use in production, we'll buy high volumes at better pricing. If its a part we may replace or design out, we'll get as close to our prototype count as possible. Often FAI can quote us nice partial volumes and they tend to make us buy more than we need. Over-buys are considered lab component stock.

When we've decided what we want to buy from a particular distributor, we open up MS Excel and fill in the component information with their pricing into a standard form for that distributor. I personally use a company credit card for these purchases because it has more legal protection to resolve the order incase of disagreement. Credit card orders go much faster and involve revealing less about our project and company.

I personally FAX the order from my computer to our distributor contact. We never use internet online purchasing and never will. Those systems are useful to us for collecting information and inventory amounts only. Most communications with distributors on purchases is email based. I don't want to waste my time talking on the phone with distributors.

[Utilization 15%]
Free samples can be nice. Microchip, Hewlett Packard, National Semiconductor, Analog Devices, Aromat, Microsemi, Philips, Ray-o-Vac, BML Technologies, CoilCraft, and Texas Instruments (for the DSPs) have all provided us with ample free samples without too much project prying. When anyone asks what we are working for, we have a standard lie. :)

[Utilization 10%]
We have several electronic shops in Dallas that will sell components over the counter at prices usually three times the distributor pricing. They can be convenient if the parts requirements are generic. I like to go their now and then to look for ideas.

[Utilization 05%] !!!!
The easiest and fastest way to get chips is with those few companies than sell direct. Dallas Semiconductor will accept credit card orders over the phone for up to a 25 unit maximum on each part. I can order in 5 minutes and have the parts two days later. Analog Devices appears to be following Dallas Semiconductor's lead. This is the way of the future.

[Utilization 05%]
Others.


-Jay C. Box

PS: I was invited to a marketing focus group last month where we discussed ways of doing business through distributors and directly with chip manufacturers.