Electronic Component Exchanges Compete

FRAMINGHAM (08/17/2000) - Engineers in the electronic-components industry must sift through mounds of catalogs trying to find the specific parts they need. By one count, a single database for the industry can contain 12 million entries.

Out of this jumble come attempts to unify all the players in the form of online business-to-business exchanges, such as New York-based PartMiner Inc. and ChipCenter, San Jose-based SpinCircuit and Bloomington, Minn.-based Central Resources Inc.

These companies are staking their claims in the estimated $437 billion market for electronic parts that Cambridge, Mass.-based Forrester Research Inc. predicts will be in place by 2004.

Kathy Drake, president of Harrington Signal Inc. in Moline, Ill., said her company not only uses PartMiner's Electronic Commerce Free Trade Zone marketplace to buy parts, but also pays an extra fee for PartMiner to search for older, obsolete parts not readily available. Harrington Signal assembles electronic components for alarm systems and escalator and elevator units.

"We have a customer who is making assemblies using older parts, and they have told us they are not redesigning their circuit boards," she said. "That means we have to find these parts."

No Phone Required

Rather than dialing around looking for various quotes and suppliers, Harrington Signal, with 95 employees, now uses PartMiner to locate the parts it needs, and "we are also able to find multiple resources," said Drake.

"We know where to go for specific parts by pointing and clicking rather than making lots of time-consuming phone calls or going through the Yellow Pages," she added. "This saves money on our end."

To a $16 million company like Harrington Signal, which serves companies such as elevator and escalator maker Kone Corp., even small savings can mean a lot to the bottom line.

Forrester analyst Navi Radjou said he's confident that exchange services such as PartMiner's will be successful.

"In the future, the sellers will help the buyer not only with purchase decisions, but with all aspects of design and manufacture. . . . The competition is going to be between the large exchanges - such as e2Open, where IBM Corp. is the dominant player - and the niche players, such as PartMiner," said Radjou. "Success will depend on what kind of expertise and help these sites can bring to the customer."

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