Whether you are accessing this article via smartphone, tablet, laptop or some other electronic device, your product of choice was most likely prototyped using parts sourced from global electronic component distributor Digi-Key Corporation. Throughout the 40+ year history of the company, its parts have made their way into numerous industries and applications, even hitching a ride into space on a NASA space shuttle.
Digi-Key Corporation is a world-class electronic component distributor, with annual sales exceeding $1.6 billion to a global customer base of over 550,000 professional engineers, component purchasers and others interested and/or involved in product design and development. The company stocks over one million individual components, available for immediate shipment from their 800,000 square-foot warehouse. These facts and figures often draw comparisons to other industry leaders, but the basic vital statistics are truly where the similarities end.
Unlike many of their closest competitors, Digi-Key is not based in or near a large metropolitan area. The company is nestled in Thief River Falls, a northwest Minnesota town of less than 9,000 people. Founded in his hometown, Dr. Ronald Stordahl started Digi-Key in 1972 with the intent of overcoming a typical problem for other electronics enthusiasts: sourcing electronic components in non-standard quantities. Prior to having access to Digi-Key’s unique model, electronic components could only be sourced in standard quantities, often in excess of 1,000 individual components. Digi-Key took a novel approach to sourcing these components by taking the carrying cost out of the equation, breaking down the standard packages, and shipping components in quantities as small as a single part.
The company enjoyed tremendous success, growing rapidly year over year as customer adoption of the Digi-Key model spread like wildfire. As orders continued to grow unabated, and packages flew off the shelves, they began to realize that timely delivery of these products to a worldwide customer base was a top priority. However, Digi-Key’s lack of proximity to major transit routes and shipping hubs presented a hindrance to continued growth. At that time, Digi-Key stopped processing orders at 4 p.m. to accommodate UPS and FedEx pickup hours. The carriers then made the six-hour trip to Minneapolis, loading the packages onto planes headed to the carriers’ hubs in Louisville and Memphis.
Digi-Key quickly realized that if it could process orders later into the day, all involved companies would stand to see increased business, faster order-to-delivery times, and thereby, increased profits. Executives met directly with the carriers to work on finding a solution to the shipping quandary.
After much thought and deliberation, the best solution was the simplest: the designation of Digi-Key-specific flights in and out of Thief River Falls. Both carriers now provide multiple flights in and out each day, allowing Digi-Key to process orders up to as late as 8:00 p.m. while offering the attractive option of overnight delivery anywhere in the country. The arrangement has been well received by all companies involved. UPS and FedEx have been able to streamline their delivery and pickup operations and provide better service, and Digi-Key has realized exponential increases in sales, even expanding operations in Europe, Asia and the Middle East.
However, while the concept seems simple in theory, much more than just redirecting a few planes has gone into making this arrangement a success.
Digi-Key orders are typically entered, boxed and ready for shipment in a matter of minutes following a confirmed order from a customer. Enabling the carriers to smoothly transition these parcels onto their trucks and out to the airport necessitated another creative solution. Digi-Key has designated specific areas within the PDC (Product Distribution Center) to allow the carriers to prepare and stage shipments. UPS and FedEx employees are onsite during the pick and pack process, scanning and loading packages. The packages are pre-sorted by Digi-Key into containers by zip code, shipping method, or by the specific region to which the package will be sent. FedEx has even gone so far as to pack the boxes directly into their unique shipping containers, which can then be easily loaded onto the waiting planes at the airport.
With a sizeable portion of the county employed at Digi-Key, the city and airport recognized the need to continue fostering the growth of the company, and rallied to provide much needed support for the initiative. A new 20,000 square-foot hangar on-site at the airport provides a controlled environment for loading and housing freight aircraft. Following suit, the city and county formed an airport authority in 2013 to support future upgrades and maintenance of the airport.
As far back as its earliest origins in 1972, Digi-Key has traditionally taken the path less traveled, opting to seek out what would be best for its customers, rather than looking over their shoulder to see what everyone else was doing. Eschewing traditional business models and blazing a new trail within the electronic component distribution industry has allowed the company to realize incredible growth. Whether through innovations such as early adoption of the e-commerce model, a wealth of online technical resources, and 24/7 product support, or through low-tech value such as speaking with a real person whenever you pick up the phone to call Digi-Key, the company has made a living out of bucking trends and making customers happy.
“Though it may sound cliché, our customers are our greatest resource,” said Dave Doherty, Executive Vice President of Operations at Digi-Key. “We have built a business around getting the right product into the hands of our customers, on their timeline, and providing support throughout the process of bringing their designs from prototype to production. Our unique relationship with our carriers has been integral in continuing to make good on this value proposition, and we look forward to continuing to grow our businesses together.”
Digi-Key Corporation is a world-class electronic component distributor, with annual sales exceeding $1.6 billion to a global customer base of over 550,000 professional engineers, component purchasers and others interested and/or involved in product design and development. The company stocks over one million individual components, available for immediate shipment from their 800,000 square-foot warehouse. These facts and figures often draw comparisons to other industry leaders, but the basic vital statistics are truly where the similarities end.
Unlike many of their closest competitors, Digi-Key is not based in or near a large metropolitan area. The company is nestled in Thief River Falls, a northwest Minnesota town of less than 9,000 people. Founded in his hometown, Dr. Ronald Stordahl started Digi-Key in 1972 with the intent of overcoming a typical problem for other electronics enthusiasts: sourcing electronic components in non-standard quantities. Prior to having access to Digi-Key’s unique model, electronic components could only be sourced in standard quantities, often in excess of 1,000 individual components. Digi-Key took a novel approach to sourcing these components by taking the carrying cost out of the equation, breaking down the standard packages, and shipping components in quantities as small as a single part.
The company enjoyed tremendous success, growing rapidly year over year as customer adoption of the Digi-Key model spread like wildfire. As orders continued to grow unabated, and packages flew off the shelves, they began to realize that timely delivery of these products to a worldwide customer base was a top priority. However, Digi-Key’s lack of proximity to major transit routes and shipping hubs presented a hindrance to continued growth. At that time, Digi-Key stopped processing orders at 4 p.m. to accommodate UPS and FedEx pickup hours. The carriers then made the six-hour trip to Minneapolis, loading the packages onto planes headed to the carriers’ hubs in Louisville and Memphis.
Digi-Key quickly realized that if it could process orders later into the day, all involved companies would stand to see increased business, faster order-to-delivery times, and thereby, increased profits. Executives met directly with the carriers to work on finding a solution to the shipping quandary.
After much thought and deliberation, the best solution was the simplest: the designation of Digi-Key-specific flights in and out of Thief River Falls. Both carriers now provide multiple flights in and out each day, allowing Digi-Key to process orders up to as late as 8:00 p.m. while offering the attractive option of overnight delivery anywhere in the country. The arrangement has been well received by all companies involved. UPS and FedEx have been able to streamline their delivery and pickup operations and provide better service, and Digi-Key has realized exponential increases in sales, even expanding operations in Europe, Asia and the Middle East.
However, while the concept seems simple in theory, much more than just redirecting a few planes has gone into making this arrangement a success.
Digi-Key orders are typically entered, boxed and ready for shipment in a matter of minutes following a confirmed order from a customer. Enabling the carriers to smoothly transition these parcels onto their trucks and out to the airport necessitated another creative solution. Digi-Key has designated specific areas within the PDC (Product Distribution Center) to allow the carriers to prepare and stage shipments. UPS and FedEx employees are onsite during the pick and pack process, scanning and loading packages. The packages are pre-sorted by Digi-Key into containers by zip code, shipping method, or by the specific region to which the package will be sent. FedEx has even gone so far as to pack the boxes directly into their unique shipping containers, which can then be easily loaded onto the waiting planes at the airport.
With a sizeable portion of the county employed at Digi-Key, the city and airport recognized the need to continue fostering the growth of the company, and rallied to provide much needed support for the initiative. A new 20,000 square-foot hangar on-site at the airport provides a controlled environment for loading and housing freight aircraft. Following suit, the city and county formed an airport authority in 2013 to support future upgrades and maintenance of the airport.
As far back as its earliest origins in 1972, Digi-Key has traditionally taken the path less traveled, opting to seek out what would be best for its customers, rather than looking over their shoulder to see what everyone else was doing. Eschewing traditional business models and blazing a new trail within the electronic component distribution industry has allowed the company to realize incredible growth. Whether through innovations such as early adoption of the e-commerce model, a wealth of online technical resources, and 24/7 product support, or through low-tech value such as speaking with a real person whenever you pick up the phone to call Digi-Key, the company has made a living out of bucking trends and making customers happy.
“Though it may sound cliché, our customers are our greatest resource,” said Dave Doherty, Executive Vice President of Operations at Digi-Key. “We have built a business around getting the right product into the hands of our customers, on their timeline, and providing support throughout the process of bringing their designs from prototype to production. Our unique relationship with our carriers has been integral in continuing to make good on this value proposition, and we look forward to continuing to grow our businesses together.”
