APIs in the Electronics Value Chain – Curse or Blessing?

This article has been updated in May 2023.

Connectivity defines our era: we are connected to the world and each other like never before, and this is possible because of data being immediately available in more than one place at a time. But how does this actually happen? It's thanks to APIs, or Application Programming Interfaces.

And while the electronics industry is providing the prerequisites for this technology, its own processes along the value chain are still very disconnected, accounting for many of its current challenges.

APIs defined

An API is an interface that facilitates communication and connectivity between two or more software applications, like a 'messenger' that takes your request to a system and returns its response back to you. 

Think about the weather forecasts: if you search “weather” and your city’s name on Google, you will see a box at the top of the page showing you the current weather conditions. Since Google is not doing their own weather forecasts (yet), they get this information from another provider via APIs.

So, API integrations can carry specific information from the place it already exists to the place where people need to see it – instantly, saving the time to manually collect it from different sources or to wait for it to be delivered in a different way. Modern software ecosystems are built around APIs, therefore creating progress by automating business processes and the sharing of data.

API vs. EDI

Currently still more common than APIs, in the electronics industry, is EDI, Electronic Data Interchange, the standard document exchange method that has been around for some 50 years now. EDI works by establishing a connection between only two parties, making it necessary to build all these 1:1 connections individually and to ensure that all parties have compatible versions, as well as accept the same transmission guidelines. This way of communication requires human intervention and data is stored in separate databases, which results in a rather slow and effortful process.

Integrating APIs in the Request for Quotation (RfQ) process, for example, has the potential to boost supply chain efficiency and create a competitive advantage. Sourcing data, such as stock levels, lead times or prices, from several suppliers and distributors can be automatically retrieved at once, regularly and automatically updated, and compared – no action required. So, by setting up a few connections to other existing systems, a manual and long process is made faster and more precise.

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Shifting mindset

APIs are the basic building blocks for any future systems that communicate smoothly with each other to exchange information along the value chain, while still keeping the decision-making power about what is shared and what isn’t with the respective players. The availability of APIs makes it possible to transmit relevant information in real-time from one point to another, benefitting all players in the electronics value chain; from the hardware engineer, who can obtain the relevant data on selected components in their ECAD system, to the procurement manager, who can access and evaluate availability and delivery times in real-time from their suppliers. 

More and more players along the electronics value chain have an API to exchange process-relevant data with partners. At Luminovo, we integrate this multitude of APIs into our software solutions for EMS providers, OEMs and PCB suppliers, collect and process all data, and build it into our workflows so that the diverse users receive the right information in the right place at the right time.

Are you ready to shift your mindset? We’re here to help! Reach out to us or book a demo today to transform your business tomorrow.