intro

Sell More Parts
Introduction

According to Milton Friedman, the primary purpose of business is to maximize profits. This objective can be accomplished by increasing revenue, or decreasing expenditures. Orbweaver can help…

Milton Friedman
American Economist, Nobel Laureate

This long-form blog presents discussion about Orbweaver’s products and solutions to educate and inspire the industry’s decision-makers. With our results-driven automated solution, we’re making the electronics industry more agile, more efficient, and more relevant. We’re empowering industry leaders to sell more parts.

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Orbweaver is focused on sales automation, which differs significantly from buying activity, which is detailed below. If you’re interested in purchasing automation, you can read our thoughts on the Purchasing Cycle.

Selling Characteristics

  • On the sell side as a sales representative, you’re presenting your organization’s products and services in an informed manner.
  • Your objective is to increase the audience of available clients, maximize price, and create exclusivity by being the first to identify and respond to opportunities.

Buying Characteristics

  • On the buy side as a buyer or purchasing agent, you’re 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.

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online

Sell More Parts
Online Presence

In 2006, Chris Anderson introduced us to the Long Tail Theory, suggesting that companies can capture significant opportunities if they’re 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

The Pareto Principle

As we explore the objectives and opportunities of your organization’s sell side, remember the significance of the long tail. In applying the Pareto Principle—also known as the “80/20 Rule”—to business, a relatively small number of customers contribute the majority of your company’s revenue. In the Long Tail Theory, a small number of customers represents “the head” and the majority represents “the tail.”

Sales automation is about the efficient movement and utilization of data to address the opportunities presented in the long tail. How your organization best captures them, and via what steps, is vital. Read on to learn how Orbweaver can assist in securing a successful digital future.

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

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Things are not always what they seem.

In theory, when pursuing “head” opportunities, competition is more intense and differentiation can be difficult to obtain. Performance guarantees also 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 actually less attractive than smaller clients. The challenge, of course, is the cost to service and identifying 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

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1.  Meet your customers where they are

Customers’ shopping preferences have quickly and drastically shifted to online marketplaces. In 2017, 79% of U.S. 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 personal purchasing practices from home and applying them to the work environment, where they expect their suppliers to have convenient, stable and feature-rich eCommerce platforms. Of 2018’s top 10 electronic distributors4, all have a customer centric value-add feature on their website such as a complete Web store or client-specific login page to access specific data.  All but five of the top 25 distributors have something similar.

  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

As the market demonstrates, the robust online experience offered to clients is absolutely critical to addressing the opportunities of the long tail. The value of that customer-centric content differentiates you from your peers, attracts new opportunities, and helps maintain better relationships, enabling your rise as the preferred business partner through the following means:

  • A digital engagement strategy delivers convenience, meeting your customer at the time and place of their choosing.
  • A rich online offering—supplemented with multiple color images, datasheets, component attributes, STEP files, lead times, and alternate packaging, to name a few—provides value to your client when making critical purchasing or design decisions.
  • Augmented site offerings that boast a strong web presence, SEO optimization techniques, and supporting marketing strategies enable your organization 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 impact on engagement.

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2.  Make servicing long tail accounts more efficient

The scalability of an online digital platform is what allows your organization to reach large portions of the available market without additional proportional cost. Back-end systems that deliver content through your online web presence generates stronger client-specific engagement. And contrary to widely held beliefs about published online pricing, it does not erode margins when customers predominantly understand and agree to pay for convenience and value.

To maintain a low customer acquisition cost within a long tail strategy, get your digital house in order with the following action plan:

  • 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 including marketing, sales, operations and purchasing.
  • Make use of tangential internal and external data stores and services to enrich user engagement with the ability to cross reference information, determine component availability across the supply chain, and access related component libraries.
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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’re concerned about publishing this much valuable content online, remember that your client is online looking for answers and keeping your value proposition a secret is not productive. Reluctance on this front also gives your competition an opportunity to differentiate themselves at your disadvantage.

A client-specific portal delivers another level of efficiency through the following means:

  • Allow your customer to enter, schedule and pay for their own orders online.
  • Grant convenient online access to order history, invoice downloads, tracking information, contact information, and promotions.
  • Offer multiple engagement platforms (mobile and desktop) and customized alerts and notifications via text, email or synthesized phone call.
  • Generate discussion about your digital strategy so your customer understands the next steps and benefits of further integration through EDI and API.

These suggestions apply to both distributors and component manufacturers. For the manufacturers, the benefits of offering rich content and information to customers—even without a purchase transaction—are significant.

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One more thing…

A prospective buyer is more likely to complete a transaction on a Web site with rich images and videos.  Current customer reviews make a site even more engaging. You may find the following articles helpful 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
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integration

Sell More Parts
Customer and Supplier Integration

The champ is still the greatest, as he humbly reminded us at every opportunity. Muhammad Ali’s insight about the “pebble in your shoe” and the distractions that hinder you in the pursuit of your objectives has value on many levels. For commentary on the personal aspects of this lesson, check out “What Are The Pebbles In Your Shoe?”. For commentary related to customer and supplier integration, continue reading.

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

When it relates to customer and supplier integration, the “pebbles in your shoe” are inefficient and non-value add processes. Without action, the baggage you carry on your journey will impede your progress. There are two paths to correcting the industry’s common challenges:

(1) Increase the efficiency of processes executed by your team members. Doing so will reduce costs by increasing the throughput and speed of their activities.

(2) Increase the value of work produced by your team members by enhancing the information available to them. This ideally presents itself when the data is automatically integrated into their workflow.

Charged with an awesome responsibility, your company is depending on you to make it successful. Take the steps to make your team’s processes more efficient and more valuable.

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Make current processes more efficient

Automation is the name of the game when it comes to efficiency.  Tasks, such as inbound RFQ processing and sales order intake and 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—augments internal processes, providing exactly the right information when and where it’s needed most.

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Ultimately, integration conversations considering both the customer and supplier perspectives are two sides of the same coin. They serve each other to support both efficient and automated processes. They also add an additional layer of value that’s useful for all internal and external stakeholders.

Examples of attribute data that may be communicated in an API include:

  • 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. This flow goes beyond “standard” commerce transactions and includes:

  • Bill of material (BOM) data
  • Approved vendor listings (AVL)
  • Point of sales (POS) data
  • Forecasts and embedded orders
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As a distributor of electronic components, you want to know as much about your suppliers’ parts as they do. You want your system to reliably and 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 over the alternatives.

A Common Objective

Whether we’re talking about the customer seeking better connectivity with its supplier, or the supplier seeking added value for its customer, the conversation is about one shared objective: to sell more parts.

The handing over of a business card isn’t enough to spark a productive business relationship. Instead, consider how the way you do business benefits others in the transaction. By handing your trading partners a set of API credentials, you’re saying, “this is how you easily connect to us.” 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
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api

Sell More Parts
API Enablement

An API (application programming interface) is essentially a communications agreement between two computer systems. Think of it like a form 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.

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APIs are 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:
The most common use for APIs, this process gets 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, likely) makes an API call to another system (a supplier’s sales system) to fetch price, availability, and other relevant information about a purchase.

(2) Storing data:
If the distributor’s MRP data didn’t receive sufficient information from the part lookup call described above, or if the buyer needs a much larger quantity than usual, the buying system may need to submit an RFQ. Here, the buyer’s system would assemble the data necessary to complete typical RFQ, and would initiate an API call to store RFQ data directly into their supplier’s RFQ intake and processing system.

(3) Initiating a business process:
Sometimes the action isn’t specific to the storage or retrieval of information, but it’s 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.

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How are APIs better than Flat Files or EDI?

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

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

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

As millennials continue to enter the workforce, customer behavior is inherently changing to favor convenience and immediacy. Younger consumers and employees expect easy access to information 24/7, with decision-making heavily influenced by response time.

Remember when e-mail became pervasive in business? If you didn’t have it, you weren’t a part of the conversation. It will be the same with API in just a few years. If your organization doesn’t have a seat at the table, you won’t be a part of the commerce conversation in the future. Instead, your competitors will dominate the discussion.

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Sell More Parts
Product Information Management

“I believe that at the end of the century, the use of words and general educated opinion will have altered so much that one will be able to speak of machines thinking without expecting to be contradicted.” 

Alan Turing
Mathematician & Computer Scientist

Seventh Inning Stretch

In summary, we’ve identified the establishment of your online presence as the first step toward developing a solid corporate digital platform. Then we detailed how that presence is enhanced through true integration with your customers and suppliers. Finally, we identified the hierarchy of data transport used to move that information, highlighting how those connections are best made through API. This section highlights best practices and methods for the storage or access of the exchanged data.

Our long-form blog will conclude with a discussion of how real-time data integration and analysis improves business operations. We hope you gain solid direction to guide  your company’s participation in the digital exchange of information. Surely you’ll understand its long-term benefits on company growth.

We have been working with and following Orbweaver’s development since their inception and it feels like the API conversation in the industry is really starting to take root. The products and services offered by Orbweaver in this regard are a real efficiency gain and serve to be a significant benefit for the industry.

Mike Okel
President
Hughes-Peters, Inc.
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What Data Does A PIM Contain?

In the electronics industry, component data is most commonly accessed or stored in a parts (or product) information management resource, or “PIM.” With cloud-based applications and data constantly in motion, the PIM has been thought of as the central clearing station for all product information. But this classification is limiting in terms of how a PIM can be deployed, explored below.

Regarding the data a PIM may store, we see four primary components:

  1. Attributes
    When we think of a PIM, this is the information we commonly associate with it—usually centered on physical and electrical component characteristics: product dimensions, termination finish, number of pins, mating type, mounting type, operating supply voltage, tolerance, RoHS status, etc. These data elements typically consist of a one-word, short phrase or numerical data point.
  2. Knowledge Base
    Additional attributes are needed to more fully complete a base of knowledge when empowering engineers to make design decisions. These rich attributes are more commonly associated with documents, images, lists and files and include: datasheets, product change notices, STEP files, alternate components, reference designs, lifecycle data, product images, and product schematics. Attribute and knowledge base data may be joined in a singular data transmission by way of reference to files stored as URLs or in external folder locations. In this way, the transmission of data between a supplier and distributor may be automated, generating significant benefits.
  3. Commercial
    Attribute and knowledge base data is often static, and in most cases we see, the PIM conversation stops there. This is because any information that is more likely to change over time is transmitted in a different file or method and stored in a different database or resource. It’s interesting to note that as humans, we often design machines that emulate human limitations. But in terms of the speed and processing capacity of computing power available today, we have the opportunity to think about data much differently. We can combine seemingly disparate data sources in one seamless user interface to deliver a more complete and useful hub of information, without any hesitancy or lag. The PIM offered by Orbweaver also provides access to commercial data—pricing breaks, package sizes, lead times, in stock quantities, and country of origin—in the same way you access attribute and knowledge base data.
  4. Referential 
    Let’s take the concept of centralizing component data even further: why not also report transactional information through the same user interface? Not to serve as the system of record, but to centralize and unify the presentation of all product information from a central access point: offers, quotes, sales, purchases, and RMAs both on historical and in-process basis.  
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How is that Data Obtained, Organized and Maintained?

The goal is that the above referenced data is always accurate, resulting from synchronous data transfers, or real-time data connections. This would contrast the asynchronous data that’s been stored since the data was originally sent and hasn’t been updated at the moment of use. Even if just a few moments have passed, in those moments a transaction (unknown to the participants) could have occurred to invalidate the data, rendering it unusable or actionable only in error.

Real-World Problems with Asynchronous Data Transfer:

In the real world, an asynchronous data transfer often results in a cancellation notification for an online purchase order you placed. Even though the site showed the available inventory, they did not actually have it at the time of your purchase. The data displaying availability had not been updated for some period of time, and in that time, someone else bought the stock.

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Dr. Michael Stonebraker, CTO and co-founder of Tamr, and recipient of the 2015 Turing Award, wrote an interesting white paper on the “Seven Tenants” of Data Unification. The paper emphasizes automation, flexibility and synchronous data exchange to obtain the scale, reliability and speed required of a PIM in the electronics industry. Read a summary of Dr. Stonebraker’s paper, a fair analysis by Alex Woodie.

The key to synchronous transfer of data is automation. Organizations dependent on manual work to send or receive files at the core of a PIM data intake or output strategy—imposing a manual ETL (extract, transform, load) process—are now seeking processes that are more scalable, secure, and efficient. These tasks, automated more effectively by machines, are becoming more intelligent, powerful and flexible due to advancements in AI and machine learning.

If you’re a distributor of electronic components, real-time data integration with your suppliers is imperative. If you’re a component manufacturer, you want to be transmitting real-time data to both your distribution partners and your direct channel customers. The intake of data can be used to populate the PIM, or its output can be distributed from the PIM.

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Features and Benefits of a PIM

A central parts information management resource empowers your team members to more efficiently acquire, create, evaluate, or publish component data.

  • Digital Asset Management
    Marketing assets across all digital platforms will share a unified data set, providing for a consistent and unified presentation of component data to customers. The descriptions, part attributes, and availability will be consistent across all access points including Web site, mobile platform, client portal, and banner ads.
  • Real-Time Data Integration
    A robust PIM, coupled with a defined digital platform, enables organizations to move data in real time, or as close to real time as possible. In a world where decisions are increasingly made by machines, you must present actionable information to those logical constructs in the microseconds during which those decisions are made.
  • Cost Savings
    A PIM digitally integrated with your customers or suppliers results in tremendous cost savings in that it is usually replacing a fragmented process. We see that these manual processes tend to be executed by multiple stakeholders across an organization who often duplicate efforts. Why wouldn’t they choose a PIM empowered with automated data transfer instead?
  • Achieve Data Scalability
    The data requirements of PIM data management are substantial. It’s not unreasonable for a PIM to handle 100 billion data points updating in real time. This volume alone exceeds the capacity for staffers with spreadsheets.
  • Easier to Manage
    It’s just smoother to visualize and manage data as it flows through your organization in one centralized node to access.
  • Synchronized Global Deployment
    All business units will share a unified data set across your organization across the globe.
  • Improve the Customer Experience
    Customers recognize how the efficient use of data improves their experience, and they appreciate it. They are more likely to return or expand their engagement as you present more accurate, actionable, consistent, and robust information.
  • Identify Data Deficiencies
    Data integrity is evaluated from a central data reference so you can identify opportunities for data improvement.
  • Part Search
    Provide users with a 360-degree view of component activity and auditability.
  • Data Connections
    Monitor the status of data integration points with your trading partners.
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Sell More Parts
RFQ Intake and Sales Order Validation

The need for automation in the electronics industry is most evident in the completion of labor-intensive tasks. Two business operations subject to manual entry errors and swivel chair effects, in particular, are RFQ intake and sales order validation.

When manually completed, these tasks are very costly to the organization for the following reasons:

  • Buyers are making smaller commitments. Objective evidence demonstrates that the average transaction value in the electronics industry is declining, and
  • Buyers are expecting increased value and service. Purchasers are applying their personal shopping habits to their workplace experience, driving supplier performance expectations higher.
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As the cost to process a transaction is maintained or increased, and the value of the transaction declines. The result for electronic component distributors and component manufacturers is compressing margins.

In our experience, companies have four responses to this challenge:

  1. Do nothing. Fortunately, we don’t see a lot of businesses unwilling to make vital changes. For a sustainable success strategy, organizations must be forward-thinking and efficiency driven. Decision-makers who don’t initiate organizational changes to solve challenges will be weeded out.
  2. Lower the cost of manual labor. Some managers decide to decrease the skill set of the workforce or engage in offshore operations. While this may help reduce costs, it doesn’t actually address the problem: efficiency must be the goal.
  1. Deploy technology developed internally. For an organization that’s profitable enough to deploy sufficient resources to address the requirement, this is a solid solution. Most businesses are economically unable to support the breadth of this effort.
  2. Incorporate third party solutions. For most organizations, this is the ideal course of action. An external solutions provider focused on corporate and industry-specific efficiency gains is typically in a much better position to lead the effort. Independently developing and maintaining the resources to consistently uphold data integrity brings many unique challenges.
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At Orbweaver, we have more expertise in data security, efficient data transport, feature development and documentation. And that should not be surprising—this is the problem we are in business to solve.

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The largest differentiator we see regarding the long-term viability of internally and externally developed systems is in the maintenance of the resource after initial deployment. It’s critical that organizations continue to deploy resources to keep technology current, uphold security protocols, and regularly reinvest in the platform.

The make versus build decision is a complex one. Read more in this blog.

Either way you go with software development, be sure the developed applications that support and automate business processes receive continual investment.

In a third-party SaaS model, your service provider will be making this investment. Consider asking the following questions about their roadmap:

  • What features and benefits do you intend to deploy in the coming months and years?
  • What additional technologies are you considering as the technology continues to evolve? (e.g. blockchain, artificial intelligence, and machine learning)
  • Do your developers seek out continuing education opportunities? What conferences do they attend? It’s imperative that their skills and industry knowledge remain current.
  • What service level agreement (SLA) do you support?

If you intend to develop the application internally, these questions may also serve as a roadmap for your consideration.

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Deploying automated and scalable practices helps component manufacturers and electronic component distributors lower operational costs, specifically relating to RFQ intake and sales order intake and validation.  Process velocity is increased, resulting in increased capacity. Finally, data accuracy is enhanced and additional information via business analytics improves decision support practices.

Sales Automation

The concept of sales automation is a relatively new topic of discussion, led by companies like HubSpot. They provide a thorough review of the topic here.


Benefits of Streamlining the RFQ Process Through Automation

A manual RFQ process leaves many improvement opportunities for automation. Often, a manual process isn’t standardized, requiring employees to create a new process for every submission. This makes scalability difficult to achieve. Utilization of quote data for purposes of business analytics and future quote decisions is equally challenging since the results of prior activity are often siloed or inaccessible in the workflow. 

Furthermore, analyzing a quote requires that employees spend hours of valued time to validate thousands of lines of data to pull together a single document.

An automated RFQ solution streamlines and standardizes the process, allowing companies to maximize their time and resources. Employees can focus their efforts on higher level activities that help to gain new business, improve customer relationships, and achieve strategic objectives.

Automating the RFQ process can help an organization improve intake and response times, a bonus both for prospective clients—who will receive information more quickly—and for suppliers, who can generate and respond to more RFQs and potentially gain more business.

Companies can generate a quote request based on accurate, verifiable data in minutes. Quotes can be structured to include information about availability, acceptable alternative parts, customer and volume discounts, and more. 

Fast, streamlined processes mean employees can generate more quotes and maximize opportunities for gaining new business. Improvements in efficiency and a reduction in costly errors means that your most valuable resource—employee time—can be channeled to high-value activities.


Benefits of Automated Sales Order Intake and Validation

In practice, a sales order intake resource serves as a central repository for incoming sales orders, prior to its entry in the organization’s MRP system or record.  A centralized and automated sales order intake and validation resource provides tremendous benefit.

As a consolidating resource, several different channels may be unified to present a single work queue to the user.  This includes inbound orders that result from web orders, EDI, API, and email, as well as other files, methods and formats.

Elimination of manual entry and errors.  Component part numbers in the electronics industry can be more complicated than encrypted passwords developed by computer operating systems. Alpha numeric part numbers that are 20 characters long are often mistyped; these errors are eliminated in an automated intake flow.

Validate component availability and cost immediately to the client-specific contract price and in consideration of all other orders and production lead time. In this process, you can be assured only accurate and actionable data is being passed on to your system of record.

De-duplication of inbound orders may be automatically detected. Nothing disappoints management like having a big booking number revised downward because orders were duplicated.

Accelerate order confirmation to your customer. As part of the intake and validation process, automated correspondence can be generated and sent to your customer. This helps improve relationships and maintains that high level of valued customer service.

Lower costs of sales order review and entry. Automation enables scale for your business and increased velocity means capacity increases while costs go down.

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conclusion

Sell More Parts
Conclusion

This concludes our long-form blog, which emerged from our “Sell More Parts” email campaign.  Stay tuned for updates to this informative resource that will help you … sell more parts.

Got questions? We’d love to speak with you directly.