Issue link: https://iconnect007.uberflip.com/i/1477844
SEPTEMBER 2022 I SMT007 MAGAZINE 51 Johnson: You have a certificate from the dis- tributor vouching for the parts as being tested and confirmed when they le the distributor. Ghalili: Exactly. Johnson: You mentioned that you're trying to work with your normal distributors. But you're also diversifying and adding new distributors for more sourcing. Talk me through the pro- cess of qualifying a new distributor. Zou: is is an AVL validation of the vendors. Two documents need to be done internally: purchasing certification and supplier quality assurance certification. We also do a survey on suppliers' capability and financial status. Besides requesting certificates, such as ISO, we ask for environment certifications like ROHS and REACH as part of the standard process. ose documents are prepared, archived, and audited yearly. e SQM team will do an onsite audit at the factory or the distributor to deter- mine whether this is a qualified vendor. Once the vendor is set up in the AVL, and we begin to purchase, we do monthly perfor- mance evaluations focusing on on-time deliv- ery (OTD) and IQC rejection rate. Every quar- ter we evaluate each AVL vendor on five fac- tors: price, OTD, IQC, responsibility, and risk. is score card helps us determine whether the vendor meets the AVL standard, or whether we need to carry out an improvement plan. Barry Matties: I'm curious what changes or shis you have seen from your customers' per- spective as it relates to component sourcing and requirements from the OEMs or the cus- tomers. Zou: Customers are even more nervous than we are about supply issues. ey push us very hard to know all the available options for sourcing components. Sometimes customers will give us sources and ask us to determine their reli- ability. For critical components, we may do the sourcing together, where we do some sourcing, and the customer checks their own resources. Sometimes customers find a source online and give us the link, but usually we cannot use that information. Basically, they rely on us to judge whether this is a reliable supplier. Matties: What I'm hearing is that customers will say, "Here's a source we would like you to explore, and we trust your judgment." Zou: Yes, and the cost might increase for some small quantity purchase. is is a global issue, not just for us. In one case, the original price was only several dollars, but with the small quantity, the price is more than a thousand. Ghalili: We had a European customer who was extremely frustrated when we said the compo- nent was not available. He kept saying, "No, I can find it. I know I can source it." He found a source and sent it to us, but Meghan and the team checked into it. Meghan told him, "is is not a real source." So, you have that dynamic with some customers who want to find sources, but we can't verify them. Foad Ghalili