GM of Converge: “I start my day by checking out the global weather forecast”
5 June, 2014
Eric Checkoway of Converge: “In a perfect world there would be no need for an independent distributor. But in reality, all the OEM manufacturers require our services"
“We estimate that today there are about 10,000 independent distributors active globally. But 99% of them are run by one person with just a table and telephone”
“Converge, the largest independent component distributors, plans on widening their activities in Israel and increasing their workforce in the country”, said Eric Checkoway, Vice President and GM of Converge to Techtime during his visit to Israel. This will be a very significant step in the Israeli electronic components market since Converge is a major distributor, and according to Eric, “we are the largest independent distributor in the world”.
Living in un-perfect world
Since being acquired by Arrow Electronics in 2010, the company has not published sales figures, but in comparative surveys from before the merger they have been continually listed as one of the largest independent distributors in North America. Today Converge is active in 19 countries with large distribution facilities in Boston, Massachusetts USA, Amsterdam, The Netherlands and Singapore, and works directly with major component manufacturers around the world.
Independent distributors have a problematic Reputation. Who needs them?
Eric Checkoway: “In a perfect world there would be no need for an independent distributor. In a world without surpluses or shortages of components and where all forecasts are 100% accurate, there would be perfect equilibrium in the supply chain, and independent distributors would not be required. However, in reality, all the OEM manufacturers require the services of independent distributors during the year. Whenever there is a disruption in the supply chain, they go to the open market, and this is why there is a need for an independent distributor”.
What types of disturbances?
“After the tsunami in Japan, large quantities of components produced by Japanese organizations were purchased to safeguard against forecasted problems in the supply chain. Additionally, small local events can disturb the supply chain. In the past I started my work day by watching news on the economy. Today, I start my day by checking out the global weather forecast”.
So what is this problematic reputation I mentioned?
“We estimate that today there are about 10,000 independent distributors active globally. But 99% of them are run by one person with just a table and telephone. We call them brokers. Brokers do not hold supplies or stocks of components. They do only back-to-back deals without any quality control. They completely rely on their suppliers”.
Considered suspect until proven otherwise
Eric joined Converge in 1991 as a salesperson. In 2010, Converge was purchased by the major global components distributor Arrow Electronics and he became Vice President and GM of the Converge business unit. He is proud to point out that most Converge employees have worked at the company an average of 12 years, where the average for a salesperson is 7 years. “This longevity demonstrates that we are a company that builds relationships and provides solutions and are not focused on a quick sale”.
How do you differ from brokers?
“We work and think in a different way. Basically everything we do is focused upon quality. We have fully-stocked warehouses and are very particular about the quality inspection of our components. It all begins with our suppliers, which are tested and filtered to our supplier scorecard. For example, we visit their sites, check their history and make inquiries about how long they have been active. You need to check that suppliers are reputable and not companies that suddenly appear today and leave the market tomorrow. After suppliers are certified and we begin purchasing from them, we have a team of engineers that perform daily inspections of all components to ensure no substandard parts enter our supply chain”.
How do you handle the problem of fake components?
“We continually invest in equipment and employee training to inspect components and operate according to our zero tolerance policy. If we receive components from suppliers that do not meet our strict standards, they immediately stop being one of our suppliers. In our market, you are considered suspect until proven otherwise, so we choose our suppliers carefully. In our opinion, the war on the fake components phenomenon can be fought, but we always need to be one step ahead of the forgers. And we are taking all the necessary steps to stay ahead every day ”.
How do you fight forgery?
“The fight starts by carefully filtering suppliers all the way to performing extensive inspection on components, such as X-ray, decap and electrical tests. Sometimes tests can last for 12 weeks. When we do not have a full history and track record of a component, we send it to an external laboratory for functional tests”.
Have manufacturers learnt to handle this phenomenon?
“Up until 5 years ago, companies bought components from anyone. They considered only price and fast delivery times in their decision making. Today most customers have implementing some level of vendor inspection procedures. For example, many customers approaches us and want to check our work procedures in order to authorize us as their supplier. From our perspective, the more advanced forgers become the more attractive Converge becomes, given our ability to stay one step ahead of forgers”.
What is the aim of your visit to Israel?
“We have decided to broaden our offices in Israel, which are managed by Oren Gadel. We want to focus on the growing Israeli market, as we believe that there is room for substantial growth. Our offering suits the Israeli market since we have no limitations on the size of orders.
“We supply orders to many different market segments helping customers to grow to a level where we become their full service partner fulfilling their supply chain needs. At the same time, we provide full traceability and inspection for companies defined as high reliability such as, security, airports, vehicles and medical equipment”.
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