How the electronics design industry can avoid future supply chain disruptions
Q&A with Dunstan Power, Director of ByteSnap Design
ByteSnap Design recently conducted research Navigating COVID-19: The New Normal which revealed how the electronics industry is responding to the coronavirus pandemic.
We surveyed professionals across a range of industries including automotive, industrial, MedTech and components.
In the midst of a global health crisis, now more than ever, electronics companies have an opportunity to show how we can support healthcare systems and governments in fighting to protect lives, while also positioning ourselves to protect our businesses and employees.
With 18% of respondents seeing an increase in disruption to their business, ByteSnap Director Dunstan Power discusses the major upheavals in the electronics global supply chain in this Q and A:
How have electronics design companies changed, as a result of demand for products and services changing?
Of the electronics design professionals we surveyed, 11% are holding more stock in-house rather than JIT (Just-In-Time) and 80% said they would consider more onshoring – especially with component supply difficulties and as the market contracts.
If there are enough other people in the same boat as you, that latent demand can help alternatives appear, which may not have existed originally.
What are the main methods for success in avoiding supply chain disruptions?
Given the disruption to various industry supply chains globally, many electronics designers needed to build extra time into their projects to allow for delays in sourcing and shipment of parts/modules/components.
It’s best to schedule kitting of parts early on in a design process, as – even for stock items – parts are on extended lead times. Plans will need reworking to take this into account. For instance, where we would normally kit each build of prototypes prior to the revision, we have now switched to kitting later builds as well as the first revision, once the BOM is ready.
The small wastage from changes to the design after the first revision is easily offset by the potential saving in time which would have been spent waiting for component deliveries.
We’d advise close liaison with suppliers to understand how they will get any necessary parts for your development. Will they deliver to your barebones office or directly to engineers’ homes? Confirm those details as soon as possible to avoid vital components going astray, which will only add costly delays to projects.
Tracking devices for supply chain management also come in handy, so you know where your parts/modules/components are en route to you.
Is there a reliance on imports from China and other international markets?
There has been and the reliance on Chinese imports must be addressed. From our survey a respondent explained how their use of components from Taiwan has ensured business continuity, ”we work with Taiwanese manufacturers that were able to help take up the slack during lockdown as Taiwan had very low COVID-19 cases as they took precautions in December 2019.”
I would expect to see less reliance on China for production now. Consequently, more global diversification could be on the cards.
Do we need government assurances, for design and manufacturing security, to avoid expatriation continuing?
Without government interest, the bad habits of over-extended supply chains and expatriation of design and manufacture will continue. Government needs to address design and manufacturing security, in much the same way it used to regard food production as a priority.
How did the lockdown affect supply chains’ inventory, and prototyping and development processes?
There was a natural reduction of inventory as the manufacturing supply chain was affected by lockdown, and prototyping and development processes took longer than usual. Both of these were partly due to delays in shipments caused by restrictions. Also, the new working arrangements that the pandemic brought with it meant many electronics teams had to work from home to deliver what customers needed on time.
Since the lockdown began, millions of workers have become more reliant on remote working and, in some respects, electronics product design already involved elements of remote collaborations. But, when it’s your company’s staff having to work from home, it’s still a major adjustment. We’ve discovered that developing key protocols and procedures has helped us acclimatise to what may well become the new normal. At the same time, those protocols and procedures are ensuring teams don’t just survive this challenging period, but thrive.
Sadly too, some companies are hoarding electronics. One of our respondents shared that “we had 55 boards prepaid and reserved, we still did not get them as our supplier sold them to other customers – we were gazumped by larger customers.”
How long will recovery take after movement restrictions are lifted?
An encouraging 22% of respondents state that they are not experiencing any dip in sales activity, while the majority (86%) believe we will be back to normal within a year. 12% expect recovery to take from 12 months to two years and sadly 3% expect that they will never recover.
Unsurprisingly, the medical/healthcare industry is the healthiest with quicker recovery anticipated. 50% respondents are not experiencing a dip in sales or activity, followed by 21.5% who believe they’ll bounce back within the next 3 months. 21.5% have said it will take 3 to 6 months and 7.1% estimate recovery to take the longest period of 6 to 12 months.
At the other end of the spectrum, our survey found that workers in the automotive sector expect that the recovery will be slower, with 15.3% experiencing no sales or activity dip, 1% looking to recover in 3 to 6 months, a further 23% in 6 to 12 months, 31% in 3 to 6 months and finally 23% expecting to recover within the next 18 months or so.
Why are those who regularly review their supply chain better placed for survival moving forward?
Supply chains need reviewing to ensure those who outsource to other parts of the globe have a robust solution for tackling the delays and dips that the recent lockdown and remote working environment brought about.
Those who cannot adapt to dips and troughs in the supply chain are less likely to survive, so having measures that enable projects to run to time are key from the outset. Always have a contingency in place, so that any disruption does not put your entire project on hold.
Published in CIE Magazine in November 2020
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