This long form blog hopes to present Orbweaver’s Products and Solutions in a context that both educates and inspires. While it may be a challenge to find inspiration in discussing your company’s Digital Platform, it is a topic we are passionate about. We aim to help make the Electronics Industry more agile, more efficient, more relevant, and ultimately to allow our clients to sell more parts.

Orbweaver is focused on Sales Automation, which differs significantly from buying activity, as detailed below. If you are interested in Purchasing Automation, you can read our thoughts on the Purchasing Cycle.

Selling Characteristics

  • On the Sell Side, acting as a Sales Representative, you are presenting your organization’s products and services for sale.
  • Your objective is to increase the audience of available clients, maximize price, and to create exclusivity by being the first to identify and respond to opportunities.

Buying Characteristics

  • On the Buy Side, acting as a Buyer or Purchasing Agent, you are representing your organization as an acquirer of products or services.
  • Your objective is to maximize return by decreasing costs and inventory through a competitive environment while making the acquisition process efficient.

The Pareto Principle

As we explore the objectives and opportunities of the Sell Side of your organization, it is also important to introduce the concept of The Long Tail. Applying the Pareto Principle, also known as the “80/20 Rule”, it is commonly accepted that a relatively small number of customers contribute the majority of your company’s revenue. In the Long Tail Theory, the small number of customers represents “The Head” and the majority represents “The Tail”.

What's Next?

Sales Automation is about the efficient movement and utilization of data to address the opportunities presented in the Long Tail. How your organization can capture this opportunity, what steps are required next and how Orbweaver can be of assistance follows in this long form blog.

Analyzing the characteristics of our long tail customers, we identified several interesting datapoints, most notably that on average, long tail customers are buying just three KEMET part number per year. If we could sell our long tail customers one more part number annually, it would have a meaningful impact on our business.

Fernando Spada
VP Marketing & Digital Engagement
KEMET Electronics Corporation

Sell More Parts Online Presence

In 2006, Chris Anderson introduced us to the Long Tail Theory, proving companies can capture significant opportunities if able to efficiently sell niche products to many "Tail" customers, rather than focusing on large volumes of commoditized products to the "Head" .

Chris Anderson Author & Entrepreneur

Things are not always what they seem.

In theory, “Head” opportunities are often more competitive, differentiation is difficult to obtain, performance guarantees are required and opportunities for profit are limited by contractual obligations.

As a result, while the aggregate revenue and profit of larger clients may be appealing, on a proportional basis, those opportunities are in fact less attractive than your other smaller clients. The challenge of course is the cost to service and identify opportunities with “Tail” customers.

The three main observations - (1) the tail of available variety is far longer than we realize; (2) it's now within reach economically; (3) all those niches, when aggregated, can make up a significant market - seemed indisputable, especially baked up with heretofore unseen data.

Chris Anderson
Author & Entrepreneur
CEO of 3D Robotics

long-tail-image

1.  Meet your customers where they are

Increasingly, your customers are online. In 2017, 79% of domestic consumers made purchases online, up from 22% in 20001. Domestic retail online sales totaled more than $500 billion in 20182 and more than $2.8 trillion worldwide, almost double just three years prior3.

Buyers are taking their own personal purchasing habits from home to work, and they expect their suppliers to have convenient, stable and feature-rich eCommerce platforms.

Of the top ten Electronic Distributors for 20184, all have a customer centric value-add feature on their website, and all but 5 of the top 25 have something similar. This feature may take the form of a complete webstore, while others may offer a client specific login page to access specific data.

  1. https://techcrunch.com/2016/12/19/79-percent-of-americans-now-shop-online-but-its-cost-more-than-convenience-that-sways-them/
  2. https://www.statista.com/statistics/272391/us-retail-e-commerce-sales-forecast/
  3. https://www.readycloud.com/info/95-ecommerce-statistics-to-know-in-2017
  4. https://www.sourcetoday.com/rankings-research/2018-top-50-electronics-distributors-list

The online experience you offer your clients is absolutely critical to addressing the opportunities of the long tail. The value of that content differentiates your offering from the noise, attracts new opportunities, and maintains those relationships - allowing you to become the preferred company to do business with:

  • A digital engagement meets your customer at their convenience so they are able to conduct business with your organization at the time and place of their choosing.
  • A rich online offering, supplemented with multiple color images, datasheets, component attributes, STEP files, leadtimes, alternate packaging, etc., provides value to your client in making a purchasing or design decision.
  • With a strong web presence, SEO optimization and supporting marketing strategies, your organization is able to attract and retain customers, triggering sales at the point of decision making.
  • A strong digital platform is scalable, offering customized client-specific content to maximize their engagement.

2.  Make servicing long tail accounts more efficient

The scale of an online digital platform is what allows your organization to reach large portions of your available market without additional proportional cost. Enabling back-end systems to deliver content through your online web presence makes for a richer client-specific engagement. And contrary to many opinions regarding published online pricing, it does not erode margins as customers predominantly understand and agree to pay for convenience and value.

To maintain a low customer acquisition cost within a long tail strategy, you need to get your digital house in order:

  • Integrate in real time with your partners to publish all component data and assets available: images, datasheets, STEP files, packaging alternatives, parametric data, country of origin, lifecycle, etc.
  • Bring that information, along with pricing, into a shared and unified Parts Information Management (PIM) resource so that data may be synchronized across your organization's business units: Marketing, Sales, Operations and Purchasing.
  • Make use of tangential internal & external data stores and services to enrich user engagement, such as cross reference information, component availability across the supply chain, and related component libraries.

Case Study: Venkel

Orbweaver saved Venkel thousands of hours previously spent manually processing millions of lines of RFQ part requests.

Download Case Study

With a unified pool of data, content can be delivered economically to long tail customers. If you are concerned about publishing this much valuable content online, remember that your client is online looking for answers. Keeping your value proposition a secret does not deliver the content your customer is looking for and allows your competition an opportunity to differentiate themselves at your disadvantage.

Another level of efficiency to be captured online results from exposing business processes and commercial activity via a client specific portal.

  • Allow your customer to enter, schedule and pay for their own order online.
  • Your customer appreciates having online access to: Order History, Invoice Downloads, Tracking Information, Contact Information, Promotions.
  • Offer multiple engagement platforms (mobile and desktop) and customized alerts & notifications via text, email or synthesized phone call.
  • Discuss your digital strategy online so your customer understands the next steps and benefits to further integration through EDI and API.

One key point to make is that these suggestions apply to both Distributors and Component Manufacturers. For Component Manufacturers, the benefits of offering rich content and information to its customers, even without a purchase transaction, has tremendous benefits.

One more thing...

A prospective buyer is more likely to complete a transaction on your website rather than a competitor if your site offers rich images.  Then more likely if your site offers current customer reviews.  Then more likely if your site offers videos.  Rather than restating the content of these articles, we would encourage your review when evaluating your online presence:

After considering several other companies, we were impressed with Orbweaver’s comprehensive understanding of our industry. They immediately spoke our language and knew the complex nature of the part data we were managing manually. They listened to our problems and provided solutions to automate key processes which ultimately had a direct impact on our business.

Anand Venkatrao
Director Of Business Development
Venkel

Sell More Parts Customer & Supplier Integration

The champ is still the greatest, as he humbly reminded us at every opportunity. His quote about the “pebble in your shoe”, and the distractions that hinder you in the pursuit of your objectives has value on many different levels. For a commentary on the personal aspects of this lesson, we invite you to read "What Are The Pebbles In Your Shoe?". For a commentary related to Customer & Supplier Integration, we invite you to continue below.

"It isn’t the mountains ahead to climb that wear you out; it’s the pebble in your shoe." Muhamed Ali

When it relates to customer & supplier integration, the “pebbles in your shoe” are inefficient and non-value add processes. There are two paths to correcting this condition and without action, the baggage you carry on your journey will impede your progress:

(1) Increase the efficiency of processes executed by your team members, thus reducing costs by increasing the throughput and velocity of their activity, and

(2) Increase the value of the work produced by your team members by enhancing the information available to them or that may be automatically integrated into their responsibilities.

You have been charged with an awesome responsibility and your company is depending on you and your team to be successful. Taking the steps to make processes more efficient and more valuable is a sound initial course of action.

Make current processes more efficient

Automation is the name of the game when it comes to efficiency.  Processes, such as Inbound RFQ Processing and Sales Order Intake & Validation can be automated, and augmented with rich data.

Improve the value of existing processes

A robust data Parts Information Management system, complete with pricing, availability and rich component attribute information can augment internal processes, providing exactly the right information when and where it is needed most.

Ultimately, the Customer & Supplier Integration conversation is two sides of the same coin. They serve each other to support both efficient & automated processes, as well as adding an additional layer of value that is useful for all internal and external stakeholders. 

Examples of Attribute Data that may be communicated in an API that you don’t always think about:

  • STEP files
  • Datasheets
  • Product Change Notices (PCNs)
  • Cross References
  • Images
  • Reference Designs
  • Country of Origin

The ultimate desire is for a Component Manufacturer and their Distributor to move as one with a unified data set, beyond the normal commerce transactions you think about, but also including:

  • Bill of Material (BOM) Data
  • Approved Vendor Listings (AVL)
  • Point of Sales (POS) Data
  • Forecasts and Embedded Orders

As a Distributor of Electronic Components, you want to know as much about your Supplier’s parts as they do. You want your system to reliably & securely import Price, Availability and Component Attribute Data in real time.

 

As a Manufacturer of Electronic Components, you want to empower your Distribution Channel with as much data as you can, enabling them to best present your product more favorably to the market than the alternative.

A Common Objective

Whether we are talking about the Customer seeking better connectivity with its Supplier, or the Supplier seeking to add value to its Customer, we recognize as a team the conversation is about one shared objective: to sell more parts.

There will be a time where the handing over of a business card will not be useful in a business relationship. In the near future, the way you do business will be by handing your trading partners a set of API credentials and you saying, “this is how you connect to us”.  It’s just the way business is going to be done. If you are not ready now, or at least getting ready for that level of connectivity, there is a pebble in your shoe.

In the world of connectivity, Orbweaver is the glue. As Digi-Key continues to invest in our digital platform, we have selected Orbweaver as our preferred data integrator.

Chris Beeson
Executive VP, Sales & Supplier Management
Digi-Key Corporation

What is an API?

An API (Application Programming Interface) is essentially a communications agreement between two computer systems. You could also think of it similar to a form that you fill out when renewing your driver’s license or applying for a line of credit: it’s a fixed format with specific pieces of data going in specific locations. When one system receives the API message, that system knows right where to look for a particular piece of data, since the structure of the ‘form’ has been previously agreed upon.

APIs are broadly more effective because they more accurately and efficiently mimic the same patterns that two humans would establish when conducting the same transition manually. The interplay between API-integrated systems is fast, flexible, and conversational. This kind of speed and efficiency is necessary and expected in today’s economy.

APIs are used for three primary functions:

(1) Retrieving Data:
This is probably the most common use for APIs, and certainly the process getting the most traction in our industry today. A common Part Lookup API is the best example of this, where one system (a distributor’s MRP, most likely) makes and API call to another system (a supplier’s Sales System) to fetch Price, Availability, and any other relevant information about a particular part in order to begin the purchase process.

(2) Storing Data:
Perhaps the distributor’s MRP data did not receive sufficient information from the Part Lookup call described above, or perhaps the buyer needs to purchase a much larger quantity than usual. In that case, the buying system may need to submit an RFQ. In this case, the buyer’s system would assemble all of the data necessary to complete typical RFQ, and then they would initiate an API call to Store data RFQ data directly into their supplier’s RFQ intake and processing system.

(3) Initiating a Business Process:
Sometimes the action to be take isn’t specific to the storage or retrieval of information, but it is intended to effect a change in business processing some way. A typical example is a PO that is currently in flight, but needs to be expedited. The person who has placed the PO can initiate an expedite request from their system, which will be converted to an API call and then sent into the seller’s system in real-time. Because of the conversational (real-time) nature of APIs, the supplier system will be able to confirm that order has been expedited and typically will respond with updated shipping information inclusive of the new expedited ship data.

How are APIs better than Flat Files or EDI?

APIs allow for a much more real-time, much more human conversation between computing systems. For example, take EDI 850 (a purchase order). In EDI, the document is physically dropped off in a mailbox. It is then picked up and processed later (sometimes days later). No feedback is provided in real-time as to whether or not the PO was correct or accepted.

However, pushing a PO via API allows for the consuming system to review all of the data and then confirm back whether or not the PO can be accepted. All of this instantly, in real time, and without the possibility of human error.

Prepare for the future or prepare to be left in the past.

As millennials enter the workforce at an increasing rate, the customer behavior is also inherently changing. Younger consumers and workers expect to be easily able to access information 24/7, with the anticipation of rapid communications. Speed may be the primary decision point, a study of value in B2B commerce in the future, like Inc., argued in 2015.

When email was first introduced and became pervasive in business, if you did not have email, you were not part of the conversation. It will be the same with API in just five to ten years. If you and your organization do not have a seat at the table, you will not be a part of the commerce conversation in the future—and likely—your competitors will.

Up Next:Product Information Management Coming April 25th