Why Big Data Matters When Searching for Electronic Components

By Logan Wamsley

McDonald’s is back in the news this week as a $300 million buyer. While that could certainly buy a lot of Big Macs, the fast food staple is putting that capital to much better use with the purchase of Tel Aviv-based startup Dynamic Yield. This represents the largest single acquisition McDonald’s has made since Boston Market in 1999.

Dynamic Yield provides retailers with “decision logic” technologies. This is the kind of Big Data-driven tech that allows companies to track these transactions and develop models that can not only identify other high-probability purchases based on the consumer’s tastes, but identify weaknesses in the company’s own offerings and processes. What demographics are attracted to each offering? How much is inflated pricing affecting sales against discounted pricing? Are certain products often purchased together in bundles, and is there any way to take advantage of this in a way that’s beneficial to both the buyer and seller? The potential for what such accumulated data — when stored, sorted, and properly analyzed to tell a coherent story — can do for a company at any stage of its supply chain is quite literally limitless.

McDonald’s agrees, and they plan ultimately to use this technology to minimize losses at all levels of the company, from the register to the acquisition of ingredients. “Ultimately you can see we’ll be able to use predictive analytics…further back through our supply chain”, says McDonald’s CEO Steve Easterbrook. “[A]s you start to link the predictive nature of customer demand all the way through your stock levels in the restaurant and the kitchen, you can almost flex it back down through the supply chain.”

Electronics OEMs are subject to the same supply chain inefficiencies as any other company, and over time even a few of these can add up to significant revenue losses – losses that could have been better spent innovating, improving infrastructure, or expanding their workforce. Big Data is the secret to identifying where these pain points are, and where the process begins developing initiatives to address them.

And the best part is that these OEMs do not need $300 million to incorporate Big Data into their supply chain management strategy. In fact, it can be free.

Case in point: Partstat’s Part Search feature gives all users complete and unlimited access to all 50 billion data points that make up our Big Data pool. This data provides OEMs with an unparalleled overview of the state of the market for over 20 million individual parts, given in the form of easily-digestible charts that visualize trends in average price, lead times, and inventory levels in a real-time model. When trying to determine whether critical electronic inventory is going to be available when needed, at a price representative of its honest market value, such detailed information proves invaluable. Without it, OEMs run the risk of not only putting needless strain on their appropriated budget, but incurring additional costs related to supply chain disruptions. Placing an order for an electronic component that posts a lead time of 52 weeks without considering alternative distributors, for example, points to a significant and costly inefficiency that could be easily avoided by simply consulting Big Data.

In a competitive environment, the market transparency Big Data provides puts control firmly in the hands of buyers, empowering them to find inventory that is reasonably priced in accordance to what the market dictates, from authorized distributors who reflect their own values in relation to quality and integrity. Every dollar and minute counts, and over time the additional savings wrought from these inventory procurement best practices can result in real capital the OEM can see and feel in their annual budgets. Stretch goals that were once considered pipe dreams suddenly become legitimate possibilities that set the organization up for success for years to come.

To see exactly what Big Data the world’s largest free electronic component search engine can offer your supply chain, sign up for a free Partstat account here.