Machine learning sets the pace of distribution

October 27, 2015 // By Julien Happich
Last July, Dave Doherty took the helm of global component distributor Digi-Key Electronics when long time president and COO Mark Larson handed over the reins to him. For EETimes Europe, Doherty shared his views on today’s consolidation climate and how distribution is set to evolve. Excerpts…

First, it is worth mentioning that over the last 40 years, the catalogue electronic components distributor has enjoyed an impressive growth, from under a million dollars to USD 1,760,000,000 in annual global sales revenue, with staff growing from 14 employees to more than 3,400 employees globally, with double digit growth figures recorded annually.

EETimes Europe: How is 2015 different?

Dave Doherty: In 2015, we’ve seen a relatively flat growth. But although it looks flat on the surface, we see continued growth. In fact, we’ve had good growth in Europe but it was tempered by the Euro to Dollars currency exchange. It is a fact that we’ll report relatively flat revenues in 2015, but our fundamental business drivers remain stable.

EETE: How big a market represents the new wave of DIY makers, open-source projects and crowd-sourced startups for Digi-Key compared to engineers working within more established companies?

Doherty: From Digi-Key’s roots some 43 years ago, there’s been a continuous evolution from the early days when our customers were professional engineers by day and hobbyists or innovators by night.

Often, they were the same people buying from a different perspective. With their professional hat, they may have access to more budget, while with their hobbyist, or maker, hat, they may be working on completely different one-off projects. The cost of innovation has decreased considerably over the years. Nowadays, through STEM initiatives, there are more science engineering projects at school, there is a renaissance of engineering interest.

While growth used to be driven by discrete components, now it is often driven by board-level products. Take MEMS components which are fairly complex devices to design with, but more easily accessed through a functioning board level integrated module. There are numerous modular products offered by companies such as SparkFun or Adafruit, implementing specific one-off functionalities, making it easier for professionals and makers alike to start designing, hence broadening our customer base among innovators in general, not just professionals.

EETE: To what extend do distributors need to spoon-feed these new engineers with pre-built design kits and recommendations?

Doherty: Better than a spoon, a fire hose would be more appropriate. We can’t get enough content online to satisfy them. No two makers are the same. Some are designing something unique for their own use, others want to incorporate a company.

We put all the information material and tools to foster their innovation, with cost effective ways to do 3D drawing and CAD simulation. You get a headstart when you can get your hands on a board that does 80% of what you want, leaping off to innovate. By integrating our libraries within available EDA tools, we want to make it easy for our customers to access all the information they need from a single environment, regardless of their choice of platform.