Resolving Design Chain vs. Supply Chain Conflicts

The modern supply chain could benefit from a 3D simulation tool. The process is no longer linear: a better model might be the known galaxy with a bunch of suppliers (planets) circling around a sun (the customer). But a supply chain analysis has to start somewhere, and for the sake of the electronics supply chain, it starts with the design engineer.

This month, EBN and Velocity have been examining steps and strategies to build an effective supply chain. “Effective” means different things to different constituents: for engineers, it's a wide choice of products, technical support, and fast prototyping; for buyers, it's quality, price, and dependability; for customers, it's all of these, plus after-market services. Each partner has a specific role to play and a wish list on how things could work better.

I will try to break these roles down, step by step, in coming blogs; analyze the functions of these roles; and see if granting supply chain wishes is even viable. I'll primarily look at design engineers, component suppliers, distributors, logistics companies, EMS providers, OEMs, and after-market sales and support. I'll also review some of tools available that work toward efficiency.

Design engineers traditionally haven't been a part of the classic supply chain. The process used to begin when a design was done and purchasing developed the BOM. But engineering responsibilities have expanded over the years. Designers now have to consider the price of the components they're using; the lifecycle of these parts; compliance with environmental mandates such as RoHS; and a host of other issues. Engineers, like everybody else, are being asked to do more with less at a faster pace than ever. So what would make a designer's job more efficient?

A study conducted by Technology Forecasters Inc. found that engineers visited 25 or more websites before even starting a design. Engineers are looking for new parts, the price and availability of these parts, potential EOL issues, and environmental sustainability. In a perfect world, all of this information would be available by visiting just a few sites. But it's not. Suppliers have their own websites with their parts; distributors host sites that feature their franchises; and some sites focus only on new products while others focus on maintenance, repairs, and overhaul (MRO). Most sites now host the RoHS status of devices, but there are now different RoHS standards for different countries.

Then there's the data itself. Engineers can find data sheets at suppliers' sites, distributor sites, and third-party sites. But not all data sheets are created equal. Some sites just aggregate suppliers' data, which may get out of date. Distributor sites are timelier — they get end-of-life (EOL) notices from suppliers — but data may be organized by supplier, by technology, or by application. Suppliers may or may not provide tech support. Distributors usually do, but they may steer engineers toward a specific component. Worse, a sales rep might call on an engineer who was just making an inquiry.

Environmental compliance data is usually available through suppliers and distributors and is also compiled at consultancy, government, and NGO sites. Some sites cross-reference compliance status with actual devices, while others provide general guidelines.

Engineering research could be made easier by compiling real-time component data at one master site. The site would cross-reference part numbers, suppliers, component specs, and applications. It would automatically flag a potential EOL or noncompliance issue. The perfect site would be agnostic (not tied to a sales or marketing strategy) and anonymous (engineers don't have to register).

Technology support is another factor that weighs in here heavily. But this, too, would be web-based with the option of personal support. This site could be linked with a research site or stand alone. Ideally, a support person would be available 24/7 by phone or by live chat. They'd speak or write in the engineers' language and they wouldn't be tied to a supplier or distributor. Based on an engineer's questions, the technical staff would anticipate potential problems and help select supporting components. Then they'd tell designers where they could get samples of these components. This could link to a third site or direct users back to a research page, where one-click purchasing is available. Parts would be delivered the next day.

If engineers were designing for their supply chain, they'd pick a widely available, low-priced part that could be sourced anywhere in the world. It wouldn't be a proprietary part, and it wouldn't have a lead time. This part would be in no danger of going EOL, and it would be automatically compliant with global environmental regulations. Somehow, though, the engineer would source this component only through a chosen supplier or a chosen distributor and not through a competitor. And even though the part is low-priced, there would be a healthy profit margin built in to the sale.

But engineers don't design for the supply chain, they design for their customers. The needs of the supply chain and the design engineer aren't perfectly matched, but they can be better aligned. In my next post, I'll look at ways this alignment is evolving.

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1 comment on “Resolving Design Chain vs. Supply Chain Conflicts

  1. mike_at_DCA
    December 18, 2012

    This is why manufacturers should have teams to define the “Safe Design Space” for product development. Design Engineers need to know what suppliers and parts are OK for them to select and use in new designs, and what the consequences are for going outside that. And going outside is fine; the point is to raise the fact that engineering thinks they need a new supplier, new part type, new technology, etc. to accomplish some function. The implications this can have for the other internal stakeholders (procurement, quality, supply management, manufacturing engineering, marketing, etc.) needs to be assessed and understood by the team, and the go ahead given or denied. Its not meant to stand in the way of product development but rather to take the time to ensure that the resulting supply chain is capable of delivering the product at the cost, quality, and volumes necessary for success.

    Unless you align your design and supply chains you constantly run the risk of making avoidable, and costly, supply chain related decisions during the product development phase.

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