Whether you have a hobby in a garage workshop, are a start up with great electrical engineering ideas and products, or a multimillion-dollar electronics concern, you will need electrical components throughout the design and manufacturing process. Saving money on this will either keep the hobby from becoming a money sucker or allow your business to save and grow.

Most business savings are made on inputs and this will be the focus herein.

The Best Way to Save on Components is to use Reputable Components

Although the initial outlay may seem more costly, by paying more upfront you save later down the line because your parts will not need to be replaced as often. Finding a reputable supplier means creating a partnership which will reward both of you – you get parts that you know are going to last and do the job and your supplier has a customer for life.

Remember to read what others have said about the components or the supplier because word of mouth is a powerful and generally honest way of finding what you are looking for. The main concern here is to source products and components that work consistently as you need them to and that your design and manufacturing process produce excellent quality.

Compare Prices

Doing a bit of extra research and looking beyond the usual suppliers might allow you to find excellent prices for those niche components that you need. This is not only important for small business or hobbyists, but big companies should shop around for the best deal and make sure your supplier knows that you are aware of the competition. Remember to include all the costs associated with the purchase however, because although a component might seem well priced, you may need to consider other associated costs such as delivery charges,  sales taxes or shipping costs which have not been included in the price of the component.

Search the whole of the market. Find what you need and make part comparisons quickly using the component part number on Octopart the preferred search engine for electronic parts.

If you are able to do this, not only will you save money, but you will also be able to  find the most cost-effective components and check all specifications thoroughly.

Use Just in time (JIT) Inventory Management

Sometimes referred to as the Toyota production system (TPS), this is a method of inventory management whereby you only keep enough inventory and materials to meet actual demand numbers. Only buy what you need to make the products that you have definite demand for. There is no need to spend on warehousing for either components or the finished products. This will cut down on the amount of waste and also ensure that the business maintains positive cash flow.

To succeed at JIT, you will need a competent component and raw material supplier, who believes in rationality and continuous improvement. They need to have the parts you need when you need them, thus requiring your supplier to have scale as well as flexibility.

These are three simple tips that can save you and your business a great deal of time and money and allow you to drive the business forward. Be sure to monitor and record changes as you implement such tips so that you know empirically what works for your business.