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Good morning. This is Bolaji Ojo, editor in chief at EBN. Our Live Chat session with Douglas Alexander on the challenges and opportunities of alternate parts sourcing will begin in approximately 20 minutes.
Welcome to today's Live Chat with Douglas Alexander, components engineer, consultant and regular blogger on EBN. Today, Douglas a veteran of the electronics industry will be addressing the subject of alternate parts sourcing and focusing on the challenges as well as opportunities in this area.
First, some housekeeping. Teh views expressed here today are those of the individuals and don't necessarily represent those of EBN and UBM LLC. To start, we will ask Douglas for some opening remarks to be followed by questions from EBN editors. Please hold your questions and comments until we open up the floor.
Thank you for joining me on this discussion. I would like to start by asking: When is an alternate part search performed and who does this? It is best not to have to do a part search as an emergency response but life happens and not having approved alternate parts plan is like living in an earthquake region without an emergency plan. You don't really know when the “big one” is going to hit, but it is best to be prepared by taking specific precautions to meet the potential disaster.
A solid engineer will try to find an alternate during the design stage of development. The Design Engineer takes ultimate responsibility for the product design including component selection. This does not let the Component Engineer off the hook, but the CE needs the Design Engineer's approval before adding to the AVL. Hopefully, the company is using formal ECO/ECN procedures with routing authorization signatures. There are services like Datasheets.com that list “suggested alternates and also Total Parts Plus, pay service, so there is no shortage of resources out there, but the buyer must also have the final approval of the Design Engineer before purchasing the part. Unless there is a routing specification on EOL Notices, the DE usually doesn't hear about an EOL situation on a mature product unless the subscriber to the service lets him or her know. Also, the Item Master database should also note EOL under “Part Status” field.
Nothing rattles a production operation more than a line-down emergency due to a component availability problem. Be prepared for the “Big One”. There really is no better disaster preparedness than knowing when, where, and how to identify, qualify, and source alternate parts needed to resolve and rescue a factory in distress.
Initial alternate part search at design time – Non emergency The main procedures for alternate part sourcing happen when a new part is selected for a design.
When someone is faced with this–say, in a rush to find that second source–what are tehir biggest challenges? Some tell me it too much information to cull thorugh
The line has come to a stop because the part on a PCB or other assembly cannot be completed and so higher level assemblies cannot be produced. This is a very “HOT” emergency because not only the line goes down but other resources are redirected and costly set-up and tear-downs are instituted to redirect the labor force. In the worst case, there is a complete work outage and people are sent home. Field Emergency – Customer equipment cannot be repaired This can severely impact customer satisfaction with not just your products, but also your company. Your reputation is on the line as some companies are so tightly connected together through industry trade connections or the supply chain in general; word of mouth from an unhappy customer to a prospective customer may kill future sales.
In IT it has become a very common problem-Most vendors want to offer Single point windows for everything-even if it leads to massive overload/numbness for the end-user
Hi Douglas. One of the compliants I hear from engineers, at desgin or at the last minute, is comparing data from site to site. IS something such as Datasheets the fastest way to find alternatives?
Datasheets is one I suggest as the service is fast and comprehensive. I also know that Total Parts Plus has a good listing of alternates but I believe that is a pay subscribtion service.
I would add that these part alternates should only be considered as suggested parts until a Design Engineer or Component Engineer has reveiwed and approved them.
I see you emphasize the components engineer but not the design engineer. I guess that must be because the design engineer has already moved onto other work.
I commented on EOL earlier and I think that EOL notices don't get to the Design Engineer on mature products unless he is on the EOL routing notifications.
@Barbara-Its a very real problem;very often Design Engineers select parts that the Buyers are unable to locate easily.This creates a lot of heartburn for all concerned;simply because of the delays involved in the project.
It makes sense to have alternatives on the AVL or in the item master. In the event that they are no longer available for purchase, is a Rochester or e2v the next step? Or is there another alternative?
There's an interesting dichotomy here. Do design engineers design all the time with alternate parts in mind or do they leave this to purchasing? Do design engineers get involved in issues such as green certification, etc., or do they just leave all these to the procurement guys and the components engineer. These are some of the rhetorical questions I wonder about in this process.
@Bolaji, Correct. The DE is consumed with Development. Sometimes there is a Manufacturing Engineer or Sustaining Engineer that can handle the alternate part emergencies along with the Component Engineer.
Please dive in with your comments or questions for Douglas. It's important to note he may not be able to answer all questions. EBN editors will respond as necessary to some and we welcome the views of people on this live chat too.
The DE disciplines will require the best effort to find an Alternate Part. If not, then Purchasing is notified and the Item Master indicates that this is a sole source part.
In my opinion the final responsibility of an alternate part usage lies with the design engineer. So why not have a process in the design deptt to take care such issues?
We titled this session as “Alternate Parts Sourcing: Challenges & Opportunities”. What are the opportunities a company can gain from having a flexible alternate parts strategy?
@Douglas -I understand that but very often when One person is filling more than one responsibility things get very messy in coordination between the Designer/End User and the Supplier.
@tech4people, Correct. At many companies the design engineer is also the components engineer, manufacturing engineer and the procurement guru. For companies like this the responsibilities merge quite easily.
@Douglas: How many alternate vendors/suppliers should company keep in their records for each component who can be contacted once the primary supplier cannot supply?
@tech. The biggest hat is product availability for production and that means the product can be produced reliably over its life cycle. The DE should keep part availability in mind.
May be it is the joint responsibility of the DE and component engineer to identify the need for alternate parts sourcing and give the approved alternate parts list to purchase people for keeing the sources ready to supply
@Douglas-As an Engineer I have faced this issue many times when the Supplier tends to mislead u regarding the Availibility of such and such part.IN such a situation would'nt the best option be to straightaway say No.We don't have it and don't know where to find it?
@adeniji–sometimes never. However, engineers have to keep purchasing in mind and buyers increasingly have engineering acumen–the systems owrks better this way
Suggestions are good. But that is just the starting point. There can be a serious conflict of interest issue and many times the sales person is not familiar with your particular design idiosyncrasies and parasitic issues. That is to say, they are not your engineer familiar with all the gotchas of your product subtleties. Â In the end, they are trying to sell you a product. It could be your end if you take their advice as gospel.
@TaimoorZ, I would say the best answer to your question would be that it depends on the resources available to the company and the nature of the product being sourced. A recent article by Ken Bradley talked about companies that have “Virtual Second Source”, which in reality may be qualified sourcing partners but in reality may not be viable alternate sources for various reasons.
@tech4people: I think one of the things you should consider while selecting a vendor is their integrity and commitment. This is as important as the quality of their materials.
Hi Douglas. When a part goes EOL, often someone will buy up the last existing inventory. What partner is the best to do this: the OEM? EMS? maybe a distrbutor? Is there a best practice for this?
Ultimately, the Design Engineer and Component Engineer are responsible for all alternate sourcing approvals. Purchasing must validate the source and an ECO should be used to incorporate the part.
If there is a requirement to buy obsolete components, then the sources must be pre-approved or quickly surveyed and approved before buying from them. This is a main highway for counterfeit or used parts. There are certification programs for distributors of obsolete parts. These certificates are based upon having anti-counterfeiting procedures in place and in action.
@tech4people, That would be the morally and obligatory thing to do but often companies don't want to lose a sale and don't think about the longer-term relationship with the customer. I believe one of the things Douglas has emphasized in previous blogs is that the final responsibility for the bill of materials should never be transferred to a third party no matter how important the relationship. A company must maintain control of this kind of decisions.
@Ariella-Typically what tends to happen is Salespeople move around a lot(Jump companies whenever it suits them);so they are more focussed on closing the deal rather than whether the customer gets the right product.
@Ariella, For short term gains. And if they only expect to do this one business with the customer. This can easily be the case with unscrupulous brokers.
If the reputed distributors like AVNET can have parts catalogues where equivalant alternate parts can be mentioned . probably this would be from their technical team and not from their sales people
@Bolaji @tech4people Yes, that is what salesmen usually do. I can see it for a one-time sale. But they still risk damage to their company's reputation.
@Tech4people, I agree but you just highlighted a potential problem with that scenario. Even if a company outsources all production, it should still keep some insight into the BOM. Not to do this could be corporate suicide.
@tech4people I have done sales. Though I never misreperesented the service, I found that many in the same industry did. Consequently, I was tarred with the same brush. For ex. it was always assumed that the price I quoted was inflated, and that I could be bargained down. That's b/c it is typical for people to quote double what they are willing to settle on.
Douglas, By the way, you didn't highlight the role of the C-level executive in this situation. CFOs and CEOs have become highly interested in supply chain issues and in procurement because they realize these are areas of potential cost savings. How do they influence this process?
@Brian75137, I agree and also in the medical as well as industrial markets too. There are challenges as well as advantages to these markets too. In many cases the components go end of life long before the devices but this also opens up opportunities for after-market suppliers to support that product, which can inject counterfeits into the system …
The recent workshop i attended organized by AVNET people who presented and recommended components and parts to vendors were design engineers. Even a participant asked question at AVNET stand the guy there said he has no clue about the question – “sorry am not a technical person please wait let me for the guy who could answer your”. question
@Bolaji: That's a good point. I think C-level executives would look for suppliers that suit them in the long-run rather than go for short-term savings..
To reduce the burden on DE and also to have the technical opinion on whether an alternate part is a perfect fit for a given design, we need third party reports from distributor companies who can invest in such parts evaluations. It is similar to the drugs – for any given drug there are always alternate brands with similar formulation
Not just cost savings, but these guys are concerned with Company reputation and sales potential. I have seen a CEO get involved with personal contacts to help buy parts from a competing company to keep the lines up.
A separate sourcing team with more power to control the part sourcing will produce better results than engineering team over seeing both design and part selections. The more focus put into this by the executives they would result in more right time deliveries.m
Similar is a dangerous word when it comes to alternate part qualification. For the most part, you are looking for drop in replacements with the same form, fit, and function. Substitute parts using Temporary Manyfacturing Deviations accommodate higher voltages like for capacitors, but they are not alternates because you do not want them in your item master as direct drop ins as case height may not work in another assembly.
@Tech4people, The issue is not just money. It also has to do with qualifying the parts and also depends on the nature of the component. There are application specific parts that cost millions and which may be available only through only a handful of suppliers. In this case, what companies try to do is ensure they can second source — but from the same supplier. That doesn't sound as impossible as anyone may think. They just try to ensure that the same supplier has enough redundancy built into the production system that one line down doesn't shut down production.
Good point. Anytime an exec is involved in makes things happen faster because priorities are adjusted. IN ISO 9001 or QA in general, the Execs make the enforcement happen. They have to sign up or the program fails.
A good point Douglas on drop-ins. From what I understand, even after-market manufacturers such as Rochester can make a component two ways: the first is an exact replica and the other is “performs like.”
Douglas, By the way, just to clarify. The reason you emphasize the importance of proven alternate parts sourcing strategy is not just because of pricing, is it?
@Ariella, the game of quoting double of what you are willing to settle for is something I have never understood. It's a game everyone plays knowing it's a game. Then when there is someone that doesn't play the game he/she is taken as someone who does just the same.
Pricing in an emergency takes a back seat. The cost of adding a buck to a component vs shipping a $25,000 product to a customer on time speaks for itself.
@Barbara, Correct. The other point to note is that the design might have even changed. The enclosure might be slightly different or a particular connector could have been dropped in favor of another one. Sometimes I think about the day Apple decides to drop the connector for charging the iPhone and the iPod and replace it with something else. Does anybody have an idea how many Apple devices could suddenly have to find alternate support?
Maintenance and Repair have to be compliant as well. Usually the depot or OEM Repair and Return departments of Customer Service are tied into the same Item Master AVL database and therefore all replacement parts are drawn from specific part numbers that are RoHS compliant as well.
@Anna-need not be so.There will always be a first time for any such task.U have to be willing to experiment a little.I like to do that during the Beginning of the Financial year(when company is flush with funds) and I know its easier to get them to release cash.
ABolaji: I just went through the tangled mess that is all the connectors I don't use anymore. An industry standard would be great for the consumer. Not so much for the manufacturers, though
@TaimoorZ, Everything should be documented with the change order notice and information provided to all parts of the supply chain. The problem is that many companies just don't have the processes in place when a change occurs.
The service and reapir departments have to handle the EOL parts replacement and many a times the original design team and related documentation may not be even traceable. In this situation the service dept has to rely on external help to get alternate parts
@tirlapur: I don't think it's easy. I believe it is less of a problem becuase double-ordering was one of the reasong for the glut of 2001. So many companies got burned that double-ordering is no longer SOP. But that's from distrbutors…was wondering what buyers say
When the DE has moved onto other companies, another Engineer should be assigned to the mature product. There has to be a three-way connection among the R&D, Manufacturing, andCustomer Service at all times.
@Barbara, An industry standard for connectors? That wuld be good but it's not going to happen. Why? Because even the lowly connector market has gotten technology! And, the after-market support service providers don't want it. The HDMI connector for my phone costs $40! It's just a cable with some pins at the end but because it's special to the phone I had to order it direct from Samsung! That's the way companies keep after-market support sales inhouse.
Douglas, What's the role of the contract manufacturer in all this? Do they get to swap and advice on alternates and do they have the resources inhouse to support such offerings?
Double ordering can lead to allocations in the worst case. The book-to-bill ratio goes off the map and that causes a panic buying spree and price escalation. Of course this is not always the case, but after awhile a distributor figures out that you are double ordering when you pull in and push back order receipts too often.
@Bolaji: I think contract manufacturers should have a say in the quality of the parts and the vendor because their output can directly affected by these.
It looks like the component distributors have a key role to play in this issue as they can be the co-ordinating party between the dE, CE and purchase and service.
A CM may have an onboard CE but you never want to take that advice more than just a suggestion. It is a good starting point but again the DE and CE needs to approve the part. In the end, the CM is not responsible for your product integrity. YOu are.
@Tirlapur, Double-ordering has also in the past boosted sales into the broker market because it distorts demand/supply. In the end, manufacturers end up returning or reselling components they can't use, which end up at brokers and can lead to the mix-up of genuine and fake parts.
@Douglas: Are there agencies that can do supplier evaluations on your behalf and help you in determining whether the supplier is good enough to work with?
I want to thank you too Douglas for answering our questions and the insight. Thank you to all participants too for your comments and for making this a lively exercise. We will be hosting another Live Chat soon on EBN. Please check the site for our promo soon.
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This is a test
Hi, Bolaji. I came to test, too, because all my Internet connection has been acting weird.Â
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Good morning. This is Bolaji Ojo, editor in chief at EBN. Our Live Chat session with Douglas Alexander on the challenges and opportunities of alternate parts sourcing will begin in approximately 20 minutes.
Hello, hello, everyoneÂ
@Susan, hello, you're early. So am I. I just wanted to be sure I had the right address.
We will begin our Live Chat with Douglas Alexander, consultant and components engineer, in 15 minutes. Please stand by.
Hi all!
Hello everyone and good afternoon. (I just finished my dinner)
Hello, Ariella, and Anna
We will begin our Live Chat with Douglas Alexander, consultant and components engineer in 5 minutes. Please stand by.
Hello Susan and Ariella.
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Hi everyone! 🙂
Hi, Anna
This is Barb checking in
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Hello Barbara.
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Hi, Barb
Welcome to today's Live Chat with Douglas Alexander, components engineer, consultant and regular blogger on EBN. Today, Douglas a veteran of the electronics industry will be addressing the subject of alternate parts sourcing and focusing on the challenges as well as opportunities in this area.
Hi all 🙂
Hi Douglas
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Hello everyone.
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First, some housekeeping. Teh views expressed here today are those of the individuals and don't necessarily represent those of EBN and UBM LLC. To start, we will ask Douglas for some opening remarks to be followed by questions from EBN editors. Please hold your questions and comments until we open up the floor.
Hi, Barbara, Taimoor, and Prabhakar
Thank you for joining me on this discussion. I would like to start by asking: When is an alternate part search performed and who does this? It is best not to have to do a part search as an emergency response but life happens and not having approved alternate parts plan is like living in an earthquake region without an emergency plan. You don't really know when the “big one” is going to hit, but it is best to be prepared by taking specific precautions to meet the potential disaster.
Hi Susan
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A solid engineer will try to find an alternate during the design stage of development. The Design Engineer takes ultimate responsibility for the product design including component selection. This does not let the Component Engineer off the hook, but the CE needs the Design Engineer's approval before adding to the AVL. Hopefully, the company is using formal ECO/ECN procedures with routing authorization signatures. There are services like Datasheets.com that list “suggested alternates and also Total Parts Plus, pay service, so there is no shortage of resources out there, but the buyer must also have the final approval of the Design Engineer before purchasing the part. Unless there is a routing specification on EOL Notices, the DE usually doesn't hear about an EOL situation on a mature product unless the subscriber to the service lets him or her know. Also, the Item Master database should also note EOL under “Part Status” field.
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Hi all…
Douglas–what about when the shortage is on the production line? WHo usually gets the call?
In general component engineering team along with component review board will make the choice of second sourcing components.
I feel there should always be back up options in the design phase.
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Please hold off on questions for now.
my internet too has been misbehaving some how too
Usually, the Production Supervisor who will forward the request to either the stockroom or purchasing.
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Nothing rattles a production operation more than a line-down emergency due to a component availability problem. Be prepared for the “Big One”. There really is no better disaster preparedness than knowing when, where, and how to identify, qualify, and source alternate parts needed to resolve and rescue a factory in distress.
Good Morning everyone
Brian75137
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Initial alternate part search at design time – Non emergency
The main procedures for alternate part sourcing happen when a new part is selected for a design.
When someone is faced with this–say, in a rush to find that second source–what are tehir biggest challenges? Some tell me it too much information to cull thorugh
It needs to undergo a big design cycle once again from identification upto new fabrication
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@Barbara-I agree.We all suffer massively from Information overload today.
is componet availability the problen or not having access to original components
Information overload tends to lead further to massive Mental Saturation too
Please hold off on all questions for now until Douglas completes his prepared remarks.
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I will notify you when to jump in.
we can not really do without information
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The line has come to a stop because the part on a PCB or other assembly cannot be completed and so higher level assemblies cannot be produced. This is a very “HOT” emergency because not only the line goes down but other resources are redirected and costly set-up and tear-downs are instituted to redirect the labor force. In the worst case, there is a complete work outage and people are sent home.
Field Emergency – Customer equipment cannot be repaired
This can severely impact customer satisfaction with not just your products, but also your company. Your reputation is on the line as some companies are so tightly connected together through industry trade connections or the supply chain in general; word of mouth from an unhappy customer to a prospective customer may kill future sales.
In IT it has become a very common problem-Most vendors want to offer Single point windows for everything-even if it leads to massive overload/numbness for the end-user
Few components are stopped due to various reasons
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Thank you Douglas for those comments. I believe Barbara had some prepared questions.
Good morning Barbara
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Hi Douglas. One of the compliants I hear from engineers, at desgin or at the last minute, is comparing data from site to site. IS something such as Datasheets the fastest way to find alternatives?
Datasheets is one I suggest as the service is fast and comprehensive. I also know that Total Parts Plus has a good listing of alternates but I believe that is a pay subscribtion service.
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I believe that's one of the issues being discussed earlier about the availability of information.
okay
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Are alternatives usually identified in the designer's library?
I would add that these part alternates should only be considered as suggested parts until a Design Engineer or Component Engineer has reveiwed and approved them.
Alternatives are identified by them
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Another issue I hear about is an engineer selecting a part that the buyer cannot source, for EOL or antoher reason. Is this still a common occurance?
Usually, if the DE has designed with alternate parts in mind, the alternates are listed on the Apprvoed Manufacturers List AVL in the Item Master.
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@Douglas,
I agree with you on that
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Hi Everyone
I see you emphasize the components engineer but not the design engineer. I guess that must be because the design engineer has already moved onto other work.
I commented on EOL earlier and I think that EOL notices don't get to the Design Engineer on mature products unless he is on the EOL routing notifications.
@Barbara-Its a very real problem;very often Design Engineers select parts that the Buyers are unable to locate easily.This creates a lot of heartburn for all concerned;simply because of the delays involved in the project.
It makes sense to have alternatives on the AVL or in the item master. In the event that they are no longer available for purchase, is a Rochester or e2v the next step? Or is there another alternative?
@Bolaji, there's always people to do the job. And perhaps the design engineers are working in a team
Design engineer comes only at macro level
There's an interesting dichotomy here. Do design engineers design all the time with alternate parts in mind or do they leave this to purchasing? Do design engineers get involved in issues such as green certification, etc., or do they just leave all these to the procurement guys and the components engineer. These are some of the rhetorical questions I wonder about in this process.
@Bolaji, Correct. The DE is consumed with Development. Sometimes there is a Manufacturing Engineer or Sustaining Engineer that can handle the alternate part emergencies along with the Component Engineer.
@tech4people rather like composers who write music that is difficult to play? They focus on the final product rather than process.
Please dive in with your comments or questions for Douglas. It's important to note he may not be able to answer all questions. EBN editors will respond as necessary to some and we welcome the views of people on this live chat too.
hello everyone.
@ Bolaji.
The DE disciplines will require the best effort to find an Alternate Part. If not, then Purchasing is notified and the Item Master indicates that this is a sole source part.
@Ariella i agreed with you.
@Douglas-What about in small companies;where one Engineer usually wears many Hats?
In my opinion the final responsibility of an alternate part usage lies with the design engineer. So why not have a process in the design deptt to take care such issues?
Â
We titled this session as “Alternate Parts Sourcing: Challenges & Opportunities”. What are the opportunities a company can gain from having a flexible alternate parts strategy?
Â
Rochester and e2v are companies that manufacture components from original die and specs, for those of you that might not be familiar with the names…
@tech4people good question, I had similar doubt.
at what point do componet engneer and design engneer get to meet
@Douglas -I understand that but very often when One person is filling more than one responsibility things get very messy in coordination between the Designer/End User and the Supplier.
@tech4people, Correct. At many companies the design engineer is also the components engineer, manufacturing engineer and the procurement guru. For companies like this the responsibilities merge quite easily.
@Douglas: How many alternate vendors/suppliers should company keep in their records for each component who can be contacted once the primary supplier cannot supply?
hello everyone.
@tech. The biggest hat is product availability for production and that means the product can be produced reliably over its life cycle. The DE should keep part availability in mind.
@Prabhakar, that's the challenge being faced by most of the manufacturers.
The CE meets with DE reularly to “thicken” the AVL with alternate parts.
May be it is the joint responsibility of the DE and component engineer to identify the need for alternate parts sourcing and give the approved alternate parts list to purchase people for keeing the sources ready to supply
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@Douglas when you say regularly how often do they meet ? And how critical is it that CE and DE are in synch with each other ?
@Taimoor
At least two. Parts on the PPL should have at least two and upwards.
@Douglas-As an Engineer I have faced this issue many times when the Supplier tends to mislead u regarding the Availibility of such and such part.IN such a situation would'nt the best option be to straightaway say No.We don't have it and don't know where to find it?
@adeniji–sometimes never. However, engineers have to keep purchasing in mind and buyers increasingly have engineering acumen–the systems owrks better this way
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It would save a lot of time for all concerned parties.
@Prabhakar, that is very good suggestion.
@tech
Suggestions are good. But that is just the starting point. There can be a serious conflict of interest issue and many times the sales person is not familiar with your particular design idiosyncrasies and parasitic issues. That is to say, they are not your engineer familiar with all the gotchas of your product subtleties. Â In the end, they are trying to sell you a product. It could be your end if you take their advice as gospel.
@TaimoorZ, I would say the best answer to your question would be that it depends on the resources available to the company and the nature of the product being sourced. A recent article by Ken Bradley talked about companies that have “Virtual Second Source”, which in reality may be qualified sourcing partners but in reality may not be viable alternate sources for various reasons.
@tech4peopl why would they want to mislead them?
@Douglas-Quite right. I don't but thats come with experience and always having a backup supplier on hand.
@tech4people: I think one of the things you should consider while selecting a vendor is their integrity and commitment. This is as important as the quality of their materials.
Hi Douglas. When a part goes EOL, often someone will buy up the last existing inventory. What partner is the best to do this: the OEM? EMS? maybe a distrbutor? Is there a best practice for this?
@Ariella-Life is never as Simple as it looks.
“Virtual second source” is interesting cocnept. where can we get more info about it Bolaji ?
@Taimoor-Words like Integrity and Commitment sound Good in Theory;In practice its a completely different story.
Ultimately, the Design Engineer and Component Engineer are responsible for all alternate sourcing approvals. Purchasing must validate the source and an ECO should be used to incorporate the part.
@tech4 True, but I do wonder why people would do that if it would boomerang on them.
@tech4people: I think recommendations from other companies about these vendors should give you an idea about these..
@Barbara
If there is a requirement to buy obsolete components, then the sources must be pre-approved or quickly surveyed and approved before buying from them. This is a main highway for counterfeit or used parts. There are certification programs for distributors of obsolete parts. These certificates are based upon having anti-counterfeiting procedures in place and in action.
@tech4people, That would be the morally and obligatory thing to do but often companies don't want to lose a sale and don't think about the longer-term relationship with the customer. I believe one of the things Douglas has emphasized in previous blogs is that the final responsibility for the bill of materials should never be transferred to a third party no matter how important the relationship. A company must maintain control of this kind of decisions.
@Ariella-Typically what tends to happen is Salespeople move around a lot(Jump companies whenever it suits them);so they are more focussed on closing the deal rather than whether the customer gets the right product.
@Bolaji
Exactly
@Douglas what does these certification programs exactly do ? Are these certified products safe to use ?
@tech4people, why do you have to put on paper if you cant practise what you preach?
@Ariella, For short term gains. And if they only expect to do this one business with the customer. This can easily be the case with unscrupulous brokers.
@Bolaji-Non-transferrence of BOM to Third parties ??? Its become very-very difficult today..
If the reputed distributors like AVNET can have parts catalogues where equivalant alternate parts can be mentioned . probably this would be from their technical team and not from their sales people
@Bolaji @tech4people Yes, that is what salesmen usually do. I can see it for a one-time sale. But they still risk damage to their company's reputation.
@Ariella It may be not for misleading, but to retain the customer so he doesn't go to another supplier.
@Anandvy,
They train to the testing and inspection requirements for anti-counterfeiting purposes. Black-topping detection, Logo fraud etc. and much much more.
@Bolaji-I would like to do a Poll here-How many people here are Business Owners/Salespersons?
@Tech4people, I agree but you just highlighted a potential problem with that scenario. Even if a company outsources all production, it should still keep some insight into the BOM. Not to do this could be corporate suicide.
@tech4people, I am neither business owner nor sales person, I am just end user.
@tech
Owner of CE Consultants
Having alternate parts identified and pre-qualified is especially important within the Aerospace community.Â
@tech4people I have done sales. Though I never misreperesented the service, I found that many in the same industry did. Consequently, I was tarred with the same brush. For ex. it was always assumed that the price I quoted was inflated, and that I could be bargained down. That's b/c it is typical for people to quote double what they are willing to settle on.
Douglas, By the way, you didn't highlight the role of the C-level executive in this situation. CFOs and CEOs have become highly interested in supply chain issues and in procurement because they realize these are areas of potential cost savings. How do they influence this process?
@Brian, not only aerospace but also defence deals
Correct. I include anything Mlitary or Space related as having the same criticality
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@Brian-Its become important everywhere today,especially after last years Tsunami in Japan and Floods in Thailand.You cant depend on one supplier only.
@Brian75137, I agree and also in the medical as well as industrial markets too. There are challenges as well as advantages to these markets too. In many cases the components go end of life long before the devices but this also opens up opportunities for after-market suppliers to support that product, which can inject counterfeits into the system …
The recent workshop i attended organized by AVNET people who presented and recommended components and parts to vendors were design engineers. Even a participant asked question at AVNET stand the guy there said he has no clue about the question – “sorry am not a technical person please wait let me for the guy who could answer your”. question
@Bolaji: That's a good point. I think C-level executives would look for suppliers that suit them in the long-run rather than go for short-term savings..
To reduce the burden on DE and also to have the technical opinion on whether an alternate part is a perfect fit for a given design, we need third party reports from distributor companies who can invest in such parts evaluations. It is similar to the drugs – for any given drug there are always alternate brands with similar formulation
@Bolaji,
Not just cost savings, but these guys are concerned with Company reputation and sales potential. I have seen a CEO get involved with personal contacts to help buy parts from a competing company to keep the lines up.
Douglas, is relying on a partner, say a distributor, to identify and source alternatives a good idea?
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@Tech4people, You'll be surprised how many company execs tell us they can't afford to double-source components!
@Tech: I have done both business owner and salesÂ
I disagree. You musr Prequalify all of your suppliers and use the AVL to identify altrernate parts.
A separate sourcing team with more power to control the part sourcing will produce better results than engineering team over seeing both design and part selections. The more focus put into this by the executives they would result in more right time deliveries.m
@Wale unfortunately that is not uncommon.
@Bolaji-I know its an issue wid Liquidity being tight everywhere but u should know how to negotiate with Your company's Finance Department!
@prabhakar
Similar is a dangerous word when it comes to alternate part qualification. For the most part, you are looking for drop in replacements with the same form, fit, and function. Substitute parts using Temporary Manyfacturing Deviations accommodate higher voltages like for capacitors, but they are not alternates because you do not want them in your item master as direct drop ins as case height may not work in another assembly.
@Ariella, a situation the designer not available? What do you do?
@tech negotiating with finance dept is tough task
@Tech4people, The issue is not just money. It also has to do with qualifying the parts and also depends on the nature of the component. There are application specific parts that cost millions and which may be available only through only a handful of suppliers. In this case, what companies try to do is ensure they can second source — but from the same supplier. That doesn't sound as impossible as anyone may think. They just try to ensure that the same supplier has enough redundancy built into the production system that one line down doesn't shut down production.
@anadvy, negotiating with finance department to part with money is always a tough task anywhere.
@Bolaji-Yes I agree entirely wid that thoughtprocess.Makes sense.
Hmm, just tried to put in a reply, but I don't see it.
@elctrnx
Good point. Anytime an exec is involved in makes things happen faster because priorities are adjusted. IN ISO 9001 or QA in general, the Execs make the enforcement happen. They have to sign up or the program fails.
A good point Douglas on drop-ins. From what I understand, even after-market manufacturers such as Rochester can make a component two ways: the first is an exact replica and the other is “performs like.”
Douglas, By the way, just to clarify. The reason you emphasize the importance of proven alternate parts sourcing strategy is not just because of pricing, is it?
@tech: this is why there should be continual disalogs going on between the CE & the DE.
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ONly thing is I prefer to second source from a Manufacturer in a completely different country.
@Ariella, the game of quoting double of what you are willing to settle for is something I have never understood. It's a game everyone plays knowing it's a game. Then when there is someone that doesn't play the game he/she is taken as someone who does just the same.
But @Douglas such alternate parts could be quite useful for service department where urgency of repairing a failed board is quite important
@Bolaji,
Pricing in an emergency takes a back seat. The cost of adding a buck to a component vs shipping a $25,000 product to a customer on time speaks for itself.
@Prabhakar-Regarding this situation of Urgent parts,we tend to store those parts which tend to wear out frequently(on-site).
@prabhakar, i dont alternate part would do the perfect work, considering a critical application scenario.
@Barbara, Correct. The other point to note is that the design might have even changed. The enclosure might be slightly different or a particular connector could have been dropped in favor of another one. Sometimes I think about the day Apple decides to drop the connector for charging the iPhone and the iPod and replace it with something else. Does anybody have an idea how many Apple devices could suddenly have to find alternate support?
@Susan that's exactly the problem.Â
@Prabhakar
Maintenance and Repair have to be compliant as well. Usually the depot or OEM Repair and Return departments of Customer Service are tied into the same Item Master AVL database and therefore all replacement parts are drawn from specific part numbers that are RoHS compliant as well.
Double-ordering is much less of a problem than it used to be, from what I understand. Readers: true, or untrue?
@Tech4people, sourcing from unknown source in a different company is a challenge.
@Barbara-True.Double ordering is easier today.
@Bolaji: Shouldn't this change in design be reflected by incrementing the model number of the components?
@Anna-need not be so.There will always be a first time for any such task.U have to be willing to experiment a little.I like to do that during the Beginning of the Financial year(when company is flush with funds) and I know its easier to get them to release cash.
@Barbara, true double-ordering is pretty easier these days.
ABolaji: I just went through the tangled mess that is all the connectors I don't use anymore. An industry standard would be great for the consumer. Not so much for the manufacturers, though
@TaimoorZ, Everything should be documented with the change order notice and information provided to all parts of the supply chain. The problem is that many companies just don't have the processes in place when a change occurs.
The service and reapir departments have to handle the EOL parts replacement and many a times the original design team and related documentation may not be even traceable. In this situation the service dept has to rely on external help to get alternate parts
@Barbaray, why do you think double-ordering is easier these days ?
@Tecc4People, I'm aware of risk taking. I'm just curious as to how to detect a counterfeit this instance.
@Anna-You just know-Experience.
@tirlapur: I don't think it's easy. I believe it is less of a problem becuase double-ordering was one of the reasong for the glut of 2001. So many companies got burned that double-ordering is no longer SOP. But that's from distrbutors…was wondering what buyers say
@prabhakar
When the DE has moved onto other companies, another Engineer should be assigned to the mature product. There has to be a three-way connection among the R&D, Manufacturing, andCustomer Service at all times.
@Barbara, An industry standard for connectors? That wuld be good but it's not going to happen. Why? Because even the lowly connector market has gotten technology! And, the after-market support service providers don't want it. The HDMI connector for my phone costs $40! It's just a cable with some pins at the end but because it's special to the phone I had to order it direct from Samsung! That's the way companies keep after-market support sales inhouse.
@Prabhakar-Yeah.Documentation,that's one other story entirely.
@tech4people, hmmmm. I suppose so
@tech4people, is it just experience ? I think detection of counterfiet needs much more than that.
@Prahakar i dont foresee big OEM have that problem – not be able to trace.
Douglas, What's the role of the contract manufacturer in all this? Do they get to swap and advice on alternates and do they have the resources inhouse to support such offerings?
tirlapur, I agree. I thought so too.
@tirlapur
Double ordering can lead to allocations in the worst case. The book-to-bill ratio goes off the map and that causes a panic buying spree and price escalation. Of course this is not always the case, but after awhile a distributor figures out that you are double ordering when you pull in and push back order receipts too often.
@Anna, as douglas mentioned getting certifications really helps us to detect counterfiet materials.
@Tirlapur/Anna-I dont like to complicate things too much.It makes things way too hard!
@Bolaji: I think contract manufacturers should have a say in the quality of the parts and the vendor because their output can directly affected by these.
It looks like the component distributors have a key role to play in this issue as they can be the co-ordinating party between the dE, CE and purchase and service.
Bolaji: If you are going to use a contract manufacturer, you need to have all the controllinng documentation in place.
@Bolaji,
A CM may have an onboard CE but you never want to take that advice more than just a suggestion. It is a good starting point but again the DE and CE needs to approve the part. In the end, the CM is not responsible for your product integrity. YOu are.
@Douglas, intresting correlation between double-ordering and book-to-bill ratio. Thanks for sharing your insight.
So far, how has certifications dealt with counterfiet materials?
@Tirlapur, Double-ordering has also in the past boosted sales into the broker market because it distorts demand/supply. In the end, manufacturers end up returning or reselling components they can't use, which end up at brokers and can lead to the mix-up of genuine and fake parts.
@tirlapur, absolutely. It easier that way to keep track and ensure authenticity
@Douglas In the end, the CM is not responsible for your product integrity. YOu are. That is key.
Douglas: I agree, but how many OEMS have the resources to double-check on such things?
@tech4people, lol!!!!
@Ariella
Absolutely!
Hi all: We have about 5 more minutes with Douglas. Please direct your last questions to Douglas now.
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@Barbara,
A CE is one of the most under appreciated positions in a company until the line goes down and the CE is on the line for rapid resolution.
Are there outsourced providers who can help a company prepare alternate parts list?
@Douglas, can you give some details of the different certification programs that help to identify counterfiet materials.
Bolaji, that is a good idea
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@Douglas: Are there agencies that can do supplier evaluations on your behalf and help you in determining whether the supplier is good enough to work with?
@Douglas-Good point. Here
In the end, the CM is not responsible for your product integrity. YOu are.
But what I have tend to noticed is that most people don't want to take more responsibility!!!
@Bolaji…Leading question. There are many Component Engineering Consultants that wil work with your comapny to find alternate sources.
Approved screening houses
@Anandvy, We will be detailing this online soon on EBN.
@Brian, Thank you.
I'm going to start to wrap this up now. Douglas–thank you for your time. Readers: You can also talk to Douglas on line vis his blogs.
@Douglas do you think of Component Engineers as regard cloud innovation and supply chain?
Thank you Douglas !
@Douglas-How efficent do u feel those Counterfeiting programs are today?
@Douglas, Thank you!
@Bolaji, thank you.
Thanks, everyone for your time. Douglas, thanks for making yourself available. You enrich us all. I'm going to call this a wrap.
I want to thank you too Douglas for answering our questions and the insight. Thank you to all participants too for your comments and for making this a lively exercise. We will be hosting another Live Chat soon on EBN. Please check the site for our promo soon.
@Douglas-Do they give u better than 90% success rates(on capturing counterfeits today)?
Thank you Douglas – good discussions.
Thanks alot Douglas!
@Wale. CEs are multitasking and highly skilled at various technologies. You can find the best of the best by looking at their experience.
but what are the side effects of double ordering
@Douglas, thank you for sharing your thoughts…very informative
Thank you Douglas.
Thanks everyone. I will now cool my typing fingers in cold water. It has been a pleasure working in real time.
Thanks, Douglas, and EBN
@Adenji-what side-effects do u see personally in double ordering?
Thank you Douglas.
@everyone:
 It'a always about the money. What are he trade-offs?
Readers: Plese continue your discussion. I'll be signing off now, though. Behave!
🙂
Oops looks like I lost the connection!
@Bolaji/Barbara-Thanks a lot!
thank you all
hi