Reading time ( words)
It’s easy to frame all our supply chain woes around the COVID-19 pandemic. However, at Screaming Circuits, we started receiving dire warnings about component shortages in early 2018. At that time, we were told that the supply upheaval could last years and that we should expect it to get much worse before it got better. Now, four years later, I would say those warnings nailed it.
A bit ironically, these problems have success at their root, not structural problems within our industry. The same prognosticators I just mentioned gave the explosion in wearable internet-connected devices and electronics in cars as the driving factors behind the wayward silicon. I might add that despite these shortages, trade wars, pandemics, and now actual war, worldwide electronics manufacturing output has continued to increase. Our predicament is being caused by dramatic growth rather than a systemic breakdown.
We’ve certainly seen our own business grow along with the industry, and that’s great for us, but it’s no consolation for the engineer trying to get some boards built with parts 52 weeks out. Nor is it any fun for the folks on the front lines of quoting those assembly jobs.
In the quick-turn and on-demand manufacturing world, time is often more important than money and time is where these shortages will bite. An all too common scenario has us receiving a bill of materials (BOM) to quote along with an assembly order. We’ll check with our suppliers, get costs on most line items, but find that a few are not available and need subs. We’ll send the list back to the customer, either with proposed alternates or with the request to give us alternates. Once we receive the updated BOM, we will requote and find that a handful of parts that were available at the first go-round have since gone out of stock. This cycle can be repeated multiple times before we get a complete BOM quoted and approved. This can add days or weeks to the total build time.
Sole-sourced or highly popular components can turn this difficult process into an impossible one. I could give you a long list of components that have lead times ranging from 52 weeks up to “you will never see this part again, so just give up.” The manufacturing industry has had to look for creative solutions to keep the machines running.
One of the most important improvements is automating the data connection with components distributors. By directly connecting an online BOM quote system with multiple vendors, much of that quote cycle I described above can take place before the BOM is delivered to a purchasing department. Screaming Circuits and Macrofab have both recently announced an increase in the number of distributors that are automatically queried during the online quote process.
Transparency tools are also helpful aids. Our online quote system will list the maximum stocking quantity that we find and any minimum order quantities (MOQ), then display icons to indicate if a component is out of stock or in short supply. The short supply indication helps the customer determine the sense of urgency. Good supply usually means that there are enough around so the risk of it going out of stock in the next few days is minimal. A low-stock indicator can be used to incentivise a speedier approval cycle.
To read this entire article, which appeared in the May 2022 issue of SMT007 Magazine, click here.