Supply chain partnerships can reduce costly design respins

Author : John Dignan, Owner and Managing Director of Dynamic EMS

03 July 2017

This article looks at how design engineers can increase productivity, retain flexibility and get to market faster by partnering with an EMS company that can act as a consultant, bringing its deep insight into the supply chain to bear on the design process.

This article originally appeared in the July 2017 issue of Electronic Product Design & Test; to view the digital edition, click here β€“ and to register to receive your own printed copy, click here.

It’s not unusual for design houses to work closely with their EMS providers at the design stage. Over the last two decades, Design for Manufacturability (DfM) has proven a popular and successful concept, where both parties work together to enable the design of a product that can be tailored to the exact manufacturing process of the provider.

DfM enabled design houses to cut down on the number of costly design respins and get the end-product to market faster. As with any concept, initial substantial productivity gains eventually slowed as the technique was streamlined, leaving designers and manufacturers searching for new ways to cut costs and boost productivity. Another promising area is leveraging this existing design house and EMS partnership to maximise potential component availability.

Many design changes in the electronics industry are caused by breaks in the supply chain. These breaks can happen for a number of reasons, including: suppliers changing distributors; components going end of life; stocks running low, leading to allocation; or even natural disasters that impact component manufacturers.

The global supply chain is in a precarious state at the moment. Component manufacturers are going through a phase of reducing inventory, and, as a result, components may become hard to source until production is ramped up. This could see component allocation become widespread in the industry.

The effects of any shortage could be multiplied if expected product sales figures are exceeded and production needs to be rapidly scaled up. Supply chain problems may not only be due to the availability of components; price changes due to currency fluctuations could see carefully calculated cost projections become obsolete overnight, as happened with the sharp drop in the value of sterling following the Brexit referendum.

Design houses can avoid the worst of these pitfalls by partnering with an EMS provider as a supply chain consultant early in the design process. An EMS with strong supplier relationships can provide deep levels of visibility into component availability over long timescales. The overall spending power of the EMS can also ensure allocation of components in times when sourcing is difficult, as well as allow the EMS to form agreements with suppliers for set-price orders – providing price stability to customers. This spending power also helps secure component stocks quickly in the event of increased production.

Dynamic EMS has pioneered this approach for its customers, and to ensure these supply chain relationships remain close, it hosts regular supplier days. Its latest supplier day was held recently at its manufacturing HQ in Dalgety Bay, Scotland. The event was attended by distributors and suppliers representing 85% of its overall component spend. Suppliers attending included: EBV; Digi-Key; Avnet Abacus; Arrow Electronics; Rutronik; Farnell element14; Future Electronics; Rebound Electronics; and America II Europe.

As well as enhancing relationships and providing insight into the current state of the supply chain, the event also acts as a forum where suppliers and representatives of Dynamic EMS can explore ideas together to reduce costs and improve efficiencies – delivering further benefits to OEM customers.

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