Supply Chain in Crisis

Estimated reading time: 2 minutes

The ripples start at the very front of the process. The engineering and design teams make choices about the performance characteristics for their project, then select components that fit their performance windows.

Hundreds and even thousands of little choices must be made about which capacitor, resistor, tolerances, materials, and packages; it goes on and on and on. In a traditional design flow, the project team tends to use the parts they already know and have footprints for—maybe a little long in the tooth, but known quantities, after all.

Except these are not traditional times. Component supplies, prices, and lead times are in a great deal of turmoil. The automotive, IoT, and telecommunications sectors are vacuuming components out of the supply chain at a record pace, exerting influences like early obsolescence of older components and more.

With the design completed, the design team passes the bill of materials—including components and the fabricated board, etc.—to the procurement folks. The job is done for the design team, right? Not so fast. Some of those little component decisions—especially the ones to go with a tried-and-true, always-been-there, two-cent passive—may actually be little bombs waiting to go off in that BOM.

Procurement takes over, goes through the BOM line-by-line, and finds all sorts of parts that are no longer able to be sourced through primary suppliers. Those time-honored big-package discretes have gone end of life! Nothing in that size can be found! By the time the buyer finds something that fits the performance specifications, it’s in a 0201 package—but the BOM calls for a 0804.

Now, the procurement team sends two memos: one to the design team to identify the sourcing stalemate, and one to the product manager to tell them the new product introduction schedule is now at risk. Then, procurement makes a flurry of phone calls to try to source parts in non-primary channels, maybe even turning in desperation to grey-market sources.

The problem is even if this crisis gets resolved in procurement, the team still isn’t in the clear. As fast as component availability is changing currently, things aren’t sorted just because the project has moved into manufacturing. Those parts shortages could still arise during manufacturing or between the first and second production runs. No, it isn’t over yet. It seems like it right now, but it’s never over. The repercussions ripple up and down the supply chain at will.

To stay competitive and create long-lived products, design teams need to improve their component selections—and their design skill sets in some cases—to use the parts that will be available long term. They need to pay attention to parts availability in the short term too.

It may begin with the designers—and the designers certainly end up being held accountable to updating the design to keep the product current—but it takes the entire supply chain being in communication to keep everyone informed and in production.

To read the full version of this article, which appeared in the January 2019 issue of SMT007 Magazine, click here.