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Comment by jwr | Hacker News Reader

This exposes a bit of something that everyone in the electronics industry knows, but nobody speaks about openly — that the electronic component distributors are IT dinosaurs. Their computer systems are dated and their software not up to today's standards. Most of them haven't realized that it is their software that is their core value right now, not the parts they have sitting on shelves.

I think this market is up for disruption once somebody brave enough appears and enters the market, starting from the software side.

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Bad handling of out of stock components aside, I'm routinely amazed at how effective DigiKey and Mouser are. I can order a cart of 40 different items, each costing $0.05, getting 1 or 2 of each, and somehow they manage to routinely deliver in 2 days exactly what I ordered. They must lose quite a lot of money on those R&D orders - there's just no way you can make money having someone hunt down a specific resistor, cut 3 of them off a reel and put them in a bag.

Ah, that depends on order volumes (overall, not average order size) and their warehouse set-up. And it depends a lot on how much you pay for shipment. That being said, there are automotive parts suppliers that ship, reliably, orders of 3 screws, two nuts and 4 washers. From the UK to the EU nonetheless.

I could imagine either dirt cheap labor in well laid out warehouses or some form of automated picking solution.

> I could imagine either dirt cheap labor in well laid out warehouses or some form of automated picking solution.

i'd love to see a proper dive/writeup from someone in-the-know. lacking that, here's a third, completely speculative theory:

from what i hear, these big distributors are excellent at providing quick turnaround time. suppose that in order to guarantee this for large customers -- who presumably provide the bulk of revenue and who most value this service -- DigiKey must continually over-provision its operations. and so whenever there isn't a number of outstanding rush orders, there's extra staff available, at no marginal cost to the business, to assist the little guy.

This. It is astonishing how efficient they are.

I sometimes feel bad having to order a 3 cent part at Farnell/Element14. Which is then packed and shipped from the UK to the Netherlands without any handling or shipping fee. Usually it is delivered within 1 business day.

That said, they are treating a 3 cent part equal to a 100.000 dollar piece of equipment, which probably makes financial sense for them. Its the consistency that I, as a professional customer am willing to pay for. Farnell has become my one-stop-shop when it comes to parts and tools, I may be able to get something cheaper elsewhere, but the convenience and speed make up for that.

I think the problem is that it is an actual hard problem which is not trivial to solve. There are just so many different parts and they all come in different versions (packaging, industrial - automotive - military, etc.) with productions sites all over the world. I am actually pretty impressed by sites like octopart, how well they organize all that data and I am not quite sure what they could do better. But of course it's true, electronic products have so many different components and even one small missing component can cause havoc.

Like a state-of-the-art ERP system?

Given that a "successful" ERP rollout seems to entail paying an army of ABAP consultants for years, and a major revamp of company processes, maybe the ERP market is also ripe for disruption? ;-)

Good luck with that. Because any ERP roll-out will involve the rework of business processes, whether you use SAP with expensive ABAP consultants or something else. Reworking the business processes to match the ERP is, by the way, the way it should be. Trying to do it the other way round is usually a good route into disaster.

> I think this market is up for disruption once somebody brave enough appears and enters the market, starting from the software side.

Starting from the software side doesn't help very much, when you need enormous amounts of capital to build up initial inventory.

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