There's definitely multiple ways to do this. Another way I've found that's powerful, especially when getting into complicated assemblies, is using joint origins together with rigid joints. So say for instance you have a component A, and this cylinder is a subcomponent B within A. You can create your first joint origin for A creating a sketch in A containing a point, or just turn on visibility of the WCS Origin for A. Then go to Assemble > Joint Origins, click on the A WCS Origin so the joint origin is placed at 0,0,0. It will by default have its z axis aligned with WCS z axis, and you can in joint origin dialog box choose to select a different z axis, by choosing that option then choosing a different WCS Origin plane to have the z normal to.
You can then enter an offset for the appropriate joint origin axises, in my case diameter/2 for x and also y, diameter being a user defined parameter for the cylinder diameter. Note it's always good to first establish desired joint origin orientation, before entering offsets.
Once done, the joint origin will automatically go into a Joint Origins folder within A, since the joint origin was defined on a sketch, body, Origin etc contained in A.
Next create a joint origin defined on the cylinder in B, and joint origins has a handy Between Two Faces type to quickly place a joint origin right in the 3D geometric center. Finally create a rigid joint between the two joint origins, just being sure you're selecting joint origins (will kind of highlight) rather than creating a new joint origin when making the joint. The rigid joint will go into a Joints folder at an automatically determined location in the Browser tree based on the components relationships.
A few additional notes are when wanting to edit a joint origin offset or add an additional offset to a joint origin axis, do not edit the joint origin in the timeline, but rather find it in the Edit Parameters spreadhseet, otherwise parametric equations for the joint origin offsets will be lost, due to a current limitation it seems. Also, when placing joint origins on a line or edge, the first left mouse click will select the line, then the second click will determine if want joint origin at first end, middle, or other end of the line.
Jesse