Supply Chain Risk Mitigation Applications for the Grey Market

Estimated reading time: 2 minutes

What is an Independent Distributor?

Independent distribution (ID) makes the world go round. Can't find that IC that went obsolete in 1987, an independent distributor can—it's what we are built for. Do you need 20 pieces of a part that is still in production, but not available from your authorized distributor? Call me—I'm a broker; I can find it for you. Wait a minute; are brokers the same as independent distributors? Aren't brokers the reason there are counterfeit components in the supply chain? Do you want to see my line card so you can understand my capabilities? OK, then just type
this into your Google search bar: everything.

Here is a message on behalf of the independent distribution industry to anyone involved in supply chain management, whether you are from industry or part of the federal supply chain: It's 2015, and it's time that your supply chain became educated on how to effectively incorporate the benefits that independent distributors and brokers can offer your supply chain, while reducing your risk. It's time that the word "broker" be reevaluated. If your supply chain still looks down on brokers or independent distributors, your supply chain is likely missing opportunities to reduce liability and cost, and increase readiness.

Not convinced? I realize that many readers will disagree with that last statement, which is why I have agreed to write this column. My purpose is to demonstrate each month the common misconceptions that the supply chain has regarding independent distributors and brokers. Rest assured, I will surely include some the horror stories many of you are mumbling under your breath. But I would ask for you to read along, and I would challenge you to open your mind and consider the value that a quality, focused, certified broker or independent distributor can bring, in terms of reducing the risks of introducing a counterfeit component into your supply chain.

So what exactly is the difference between brokers and independent distributors anyway? An independent distributor may (but not always) carry stock. Brokers are generally not in the stocking business, they are the modeled for just-in-time (JIT) delivery of product. However, what makes them the same when considering the risk they pose to your supply chain is the fact that neither is authorized by the OEM or the OCM of the electronic component or higher assembly you are looking for.

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Editor's Note: This article originally appeared in the August 2015 issue of SMT Magazine.