Today, due to the coronavirus pandemic, we have faced numerous difficulties in purchasing electronic components. The outbreak of the coronavirus can lead to long-term closures of many companies and the suspension of production of raw materials such as circuit boards and electronic components. Many industries face difficulties in manufacturing their products. The Automotive industry, PCB manufacturers, medical device manufacturers, PCB design companies, etc. This article describes all aspects of a PCB manufacturer’s raw material purchase situation.
First, as the name implies, the supply chain is a chain of manufacturers that connects the produces all pieces and sub-pieces of a final product, and the failure of one of them breaks the chain and has a direct impact on the availability of that final product, product manufacturers, PCB designers, electronic designers are no exception to this rule. In recent years, the shortage of electronic components has brought many challenges to manufacturers and has become a global problem.
As a result, COVID19 has increased the demand for electrical components centered on ICs. most of the other short parts such as resistors, capacitors, fuses, and diodes, … are mostly replaceable, but ICs are not. On the other hand, there are some problems and issues in the manufacturing of electrical components. However, the number of available products to present to the market is decreasing. Due to the pandemic, some companies are either closed or working remotely. For instance, a company needs raw materials to make a product, if the particular item is not available, the entire process can be down.
This ultimately results in higher prices for the products and much longer to manufacture them.
To give an instance, special medical equipment should be manufactured in the industry of medical device technology. In normal situations, when all parts are available there will not be any issue producing any quantity of that medical device, but when critical parts of that specific medical board are not available, redesign is needed, and this needs time, money, and delay in production which is not desirable to a business and the consumers.
That being the case, the manufacturers do not guarantee an exact delivery date. Even if they provide a date, it will not be certain. Also, by changing the design, the product may lose its certifications.
Another factor that can delay the delivery of items is shipping time, as the average shipping cost increased significantly after the pandemic. Surface shipping is much cheaper than air, therefore, it is a preferred way of shipping, but because of the delay in the supply chain in some situations, manufacturers need to use air shipment to compensate for the delay while it costs much more.
Considering the challenges, we are facing in manufacturing and delay in delivery, here are some suggested possible workarounds:
Planning and ordering parts on time can be a possible solution. If a new product design is underway, it is better to have a good forecast of production and purchase the parts ahead of time before even finalizing the design.
Overstock for possible future needs
One of the most efficient ways to be prepared is to buy a reasonable number of the needed components. Therefore, in critical situations, the chance of facing a shortage of required components is high. It is helpful to buy and stock much more than what the customer ordered and use it in unpredictable situations like COVID-19 where products are in short supply around the world. For instance, a PCB manufacturer might order ten pieces, but it could be better to buy 15 or 20 pieces and stock them in order to use on essential occasions.
Having a complete BOM with identified alternates
A Bill Of Materials (BOM) is a list of the raw materials, sub-components, etc. Using updated BOM is important, once any difficulties are encountered in finding alternate components, it can be so helpful to put alternates into the Bill of Material to make sure production can use these parts as much as possible.
Having enough options is another way to keep the process running. Having three replaced components that match the original component instead of one, probably will help to bring the final product to market as soon as possible. In this case, if the first soaked item is not accessible, the opportunity to look for the second and third options is available. Consider using options in products and production, so if one option is not available at least another option of product can be produced, so the whole production does not go into a halt.
Using common electronic components
Avoid using special parts which are not very common, design your circuit around popular ICs and parts as they are less prone to be obsoleted or become unavailable. Special parts may not have too many customers and manufacturers may kill their production because of lack of need.
Having multiple vendors
It is always good to have multiple vendors for a part, this would reduce the chance of having issues with that specific part. Some companies have to delay a multi-million dollar production because a vendor for a special screw is out of business. Automotive industries are very familiar with this process and for every part, they have at least three different vendors identified.
In short, business owners face a lot of typical business challenges, but something unpredictable like a Pandemic and supply chain impact can be hard pressure on them, these unexpected things can get or break the business. Therefore, preparing for unpredictable situations through planning and research can be beneficial.
Always reserve enough margin for every critical part of the business, in stock, production capacity, vendors, financial reserves, human resources, etc.