Bringing resilience at the point of design

This blog was written by Chad Jackson, Chief Analyst & CEO at Lifecycle Insights, and comments have been provided throughout by Stephen Chavez, one of our own product marketing managers. Check it out and join the conversation below!

Designing complex products with electronic components has never been an easy task. But, a recent Lifecycle Insights study showed that companies are having to replace components more than 25 times per design thanks to a lack of component availability or component lifecycle or compliance issues. That’s why it’s more critical than ever for manufacturers of electronic products to have access to accurate and reliable component supply chain electronics intelligence. When companies have real-time intelligence into the component supply chain, it helps ensure the components they need are available, verified, and within budget when it comes time to fabricate a design.

Why supply chain electronics resilience is necessary

Lifecycle Insights’ 2022 Engineering Design for Resilience (EDfR) Survey sought to shed light on electronic component sourcing and supply chain electronics issues. The findings revealed that traditional supply chain visibility had significant shortcomings, chief of which was real-time sourcing intelligence. A staggering 89% of engineers reported they had to remove or replace electronic components from their printed circuit board (PCB) designs due to unexpected supply chain disruptions.

In light of these findings, it is hardly a surprise that 84% of respondents noted that they are working to strengthen their supply chain intelligence. Those efforts include multi-sourcing, or looking to multiple vendors for a single component, instead of traditional single sourcing, and making targeted improvements to the processes their engineers use to select components. Companies are also having to expand their approved vendor lists (AVLs) to include alternate sources of supply. Their goal is to circumvent component supply shortages while also ensuring pricing targets are met.

Between a global pandemic, geopolitical tensions, and a variety of natural disasters, the electronics supply chain has gone through more than its fair share of disruptions over the past few years. And manufacturers’ reliance on electronic components to design and produce new products is only going to increase. The ongoing supply chain challenges have shown just how vital good intelligence is to mitigating the effects of supply chain disruptions—and reducing delays and costs along the way.

Blind spots in traditional supply chain processes

Historically, engineers have selected electronic components using a “throw over the wall” design flow approach. That is, the engineer will manually select specific design components without collaborating with other teams to ensure availability. Still working in isolation, the engineer creates a bill of materials (BOM) and then “throws it over the wall” to get the appropriate parts sourced. To get the necessary insights into availability and cost, engineers would look to Google or search directly on known supplier sites. They might also refer to internal databases from past projects to identify potential sources for the necessary components. From there, the design team and the supplier would use emails and spreadsheets to exchange BOMs.

This approach is woefully inadequate in the face of unprecedented supply chain disruption. Data is disconnected and not accessible to all stakeholders. Design tools and data systems are not integrated, so there is a lack of collaborative intelligence. The lack of integration also means that engineers will not be alerted when components become, or soon will become, unavailable. This disconnected approach also means companies will have difficulty optimizing costs when spot buys are required for alternate parts.

In larger companies, design engineers select components and then create a BOM to pass over to the new product introduction (NPI) engineer for further refinement. In smaller companies, the BOM created by the design engineers is often directly submitted for purchase, without any further input from downstream teams. In both cases, when component decisions can be made early in the design phase, supplier price and availability issues will not be as volatile.

How cross-functional supply intelligence works

Traditional component selection processes offer limited insights into the future availability of a part. The design team is the predominant driver of component decisions—and if a part becomes unavailable after design is complete, issues will arise. Today, as manufacturers try to manage the risks inherent to an unpredictable supply chain, taking a cross-functional approach to supply intelligence has become a necessity. In such an approach, all stakeholders have visibility into the component change and the possible implications of that change, which can impact everything from mechanical fit to emissions compliance.

Cross-functional supply chain electronics intelligence provides real-time insights into component availability and cost data. In addition, it also alerts teams when supply issues emerge so they can be addressed when the cost of change is still manageable. Companies that have access to cross-functional supply intelligence can better ensure design teams, suppliers, and manufacturers are aligned and that they have the visibility and insights required to manage the risks involved with component selection.

When there is a lack of cross-functional intelligence, manufacturers will likely experience:

• Delays in design and production, as well as product time-to-market;
• The need to engage in expensive spot buys; and
• Data changes that are more likely to cause errors or fail to satisfy design requirements.

Accessing design intelligence to start

When companies have access to real-time supply chain intelligence, they can navigate supply chain issues as they arise all the way through the design flow, from concept through manufacturing. With design-to-source supply chain intelligence across the entire design flow, all engineering disciplines are positioned to react to issues as early as possible. This helps to mitigate the kind of risks that lead to substantial delays and expensive spot buys. When engineers can see what is happening in real-time, they can make changes when costs are lowest.

Companies whose design flow includes integrated supply chain intelligence can identify issues, respond quickly, and better manage risk, even when they are hit with unexpected circumstances during design and production. Supply-chain-connected design flows can also help manufacturers lower costs by eliminating last-minute supply issues and corresponding spot buys, which, in turn, eradicate design cycle time and rework.

Mitigating supply chain electronics risks

The last few years have shown the importance of supply chain resilience. One of the first steps to achieving it involves gaining access to timely and reliable component supply chain intelligence. As products evolve to include more electronic components, engineers need to find ways to avoid design delays and expensive spot buys when those components become unavailable. Progressive manufacturing organizations are looking at new technologies and processes to implement cross-functional supply chain intelligence. In doing so, they can mitigate risks involved with supply chain disruptions, and ensure they can acquire the electronic components they need while still meeting key deadlines and staying within budget.