Effectively managing a huge pool of electronic parts from various suppliers necessitates an in-depth understanding of the key commodity trends, strategies, and the shortages of components and parts. Failure to obtain the critical parts on time can have a wide-ranging impact on the electronic manufacturers’ business, including:
Delayed Product Launch
- Manufacturing delays due to component shortage.
- Loss of market share and competitive edge.
Loss in Revenue; unable to meet demand forecast
- Shortage or out-of-stock conditions during the high demand periods such as holiday season, events, or tradeshows, or being out of stock due to extreme weather conditions.
Fluctuations in Production Cost
- Component cost fluctuations caused by shortage.
Price variations while considering alternate options.
- The core team is unable to focus on innovation.
- There emerges a need for product re-certification and compliance.
COVID-19 further aggravated the supply chain issues and costed many companies millions of dollars. According to Jabil’s Special Report, Supply Chain Resilience in a Post-Pandemic World, about two-thirds of surveyed Original Equipment Manufacturers (OEMs) lost $50 million or more because of the supply chain issues. About one-third lost more than $100 million, and 8% lost more than $500 million.
Although the pandemic scenario has improved, the supply chain shortage trend is likely to persist. To mitigate the shortages, there are strategies and design considerations that we would like to discuss in this blog.
Consider Components with Multiple Sourcing Options
Drop-in components are hardware components that can be swapped out without requiring any additional code or configuration changes. These components are preferred because there is no negative impact. Components like MOSFETs, BJT, SMD, Memories and Power regulators come in standardized packages. To ensure that the design is source able over several production runs, consider components in your product lines that have compatible pinouts and standardized packages, with adequate alternatives and sourcing options. More the drop-in replacements, lessen the chances of re-designs.
Plan Design Variant
It is difficult to find drop-in replacements for complex Integrated Circuits (MCUs / MPUs). At times, there is an alternate component with similar land pattern and specifications, but with a pinout mismatch. Alternatively, we may have a suitable replacement on specifications, but with different packages. Then, hardware re-design is the only option to accommodate the pin-out and packaging differences of the alternative parts.
Design variants are spin-offs of the original design with specific layout changes to incorporate the alternate parts. However, it’s important to design variants that can integrate most of the alternate parts to save on the overheads of documentation, certification, and inventory management.
Reshoring Electronic Component Part
The COVID-19 pandemic has brought to light the supply chain’s volatility. The longer the supply chain, higher the risk of disruption. To mitigate this risk, electronics manufacturers should seek component suppliers who are located near them. This will streamline the logistics, reduce the lead times and the risk of production delays.
Design managers of leading product companies across all industries now prefer reshoring. It helps decrease the risk of potential cybercrime. Delivery on time is another advantage of reshoring.
Although reshoring does not guarantee elimination of component delay in the manufacturing process, component suppliers located closer to the manufacturing destinations are more likely to adhere to the schedules.
Keep a track of your Design
A typical product company usually has a variety of product designs and variants, and a long component list. The product design team should accurately track the Bill-of-Materials (BoM) list for any roadmap changes. The designers often leverage software tools to get alerts on part changes, identify NRND (Not Recommended for New Design) parts and parts going End of Life. Various component-search and BoM management tools can give insight and visibility into the supply chain. They can also help in anticipating a potential component shortage. Silicon Expert is one such tool that is widely used by top product firms.
The Silicon Expert P5 Platform enables you to plan, prepare, prevent, perform, and protect profitability. It offers features like Part Search, BoM Analysis, Alert Management, and Supply Chain Trackers. You just have to upload the BoM list and the tool automatically scrubs the entire list, flagging all high-risk parts using the risk analysis algorithms, holistically improving the BoM. The tool will also notify you when part changes occur. The goal is to proactively plan for the probable stock and lead time changes for critical components.
Leveraging these tools, a design partner can help identify electronics components and propose a long-term strategy for supply chain management, manufacturer identification and production scaling.
eInfochips can help you address the product manufacturing delays caused by component shortages by capitalizing on its two decades of design experience, the Silicon Expert tool for component insight and the Arrow Electronics global network of suppliers. We offer an integrated suite of managed services to help you efficiently orchestrate your supply chain, allowing you more time to focus on your core competencies and strategic activities.
- Periodic Design Reviews.
- Intuitive tool to identify risky parts through 4 risk statuses (strategic, market, performance, demand).
- Form-fit-function analysis; alternate parts identification across database of 1 billion parts.
- Alerts and lifecycle forecasts for proactive planning.
- Hardware re-design; BOM optimization.
- Design to manufacturing transfer support.
- Component procurement; multi-sourcing options.
- Inventory management; Fulfillment and Logistics.
Our Success Stories
- Alternate supply chain setup for A $5B industry leader to avoid delays.
- Handled 3 hardware re-spins due to component EOL issue; Achieved 18% hardware cost reduction for FORTUNE 500 industrial & transportation conglomerate.
- Extended Product Lifecycle by 5 years by performing re-design with long assured supply components for US-based multinational conglomerate.
To know more about our services, please contact us today.