Mitigating Supply Chain Disruption Risk

In a perfect world, component suppliers increase production as demand increases. In the real world, component supply and demand is a delicate equation that can become imbalanced for a number of reasons. In 2020, COVID-19 driven supply chain disruption was balanced by reductions in demand as global shutdowns reduced production activities. In 2021, unanticipated pent-up consumer demand, 5G ramp-up, increased medical equipment production and periodic COVID-19 related supplier shutdowns have created materials market constraints and increased costs. Reduced transportation capacity driven by reduced sea and air passenger travel is adding to this disruption.

Supply chain management is a core electronics manufacturer services (EMS) provider discipline that gets tested when supply chain disruption occurs. EDM’s team sees four strategies that can help mitigate supply chain disruption. Read the full whitepaper here.

Engineering a Cost Competitive Made in USA Solution

There is no question that there are a number of countries with manufacturing costs lower than the U.S. At first glance, the cost differential make may outsourcing in those regions the best solution. However, when the total costs of logistics, transit time, flexibility and quality of communication are considered, the cost differential of a Made in USA solution vs an offshore or nearshore solution can be fairly small. The engineering team at Electronic Design & Manufacturing, a regional electronics manufacturing services (EMS) provider in Lynchburg, VA, has worked to level that playing field even more.

The engineering analysis starts by mapping the process flow and evaluating the cost drivers in the assembly process. While this level of analysis is routinely done for high volume, dedicated line projects within the EMS industry, it isn’t always done thoroughly in mid-range projects.  This typically happens because companies building those projects lack the engineering resources necessarily to develop cost effective custom automation solutions.

While EDM’s team looks at the traditional areas of cost reduction through design for manufacturability (DFM) during that analysis, there is also a focus on identifying opportunities where production tooling or custom automation could take cost out of process steps that are manual, time consuming or challenging. In many cases, these custom automation solutions can be achieved with open-source hardware. The team considers solutions that involve no design changes as well as those that may involve redesign.

Solutions typically fit into five categories:

  • Automating a manual process via a custom solution
  • Reducing process time through a combination of panelization and automation
  • Redesign to better utilize blended process technology
  • Optimizing firmware to reduce the time required for test or a downstream process
  • Utilizing a custom tooled solution to reduce manual processing time.

Read our full Circuits Assembly magazine article here.

EDM Adds Fourth SMT Production Line

Business is growing at EDM and recent investments in a new SMT line enable its team to better serve specific customer needs.

“We felt adding a fourth line would increase capacity and enable us to better align our available production line options with our customers’ product mix. By focusing each line on specific production characteristics we can optimize utilization and ensure all our customers get timely support when demand changes,” said Georgeann Snead, EDM’s President and CEO.

With four lines in place, there are now two lines dedicated to higher volume production that requires fewer line changeovers. A line has also been dedicated for lower volume, older technology jobs. The fourth line is focused on medium volume, higher technology production.

The equipment investment includes a Juki G-Titan screen printer, Juki RS-1 high speed pick and place machine and a Heller 1826 8-zone reflow oven. A second Heller reflow oven was also purchased to upgrade one of the existing lines.

The Juki G-Titan screen printer has a built in inspection system for accuracy and is easy for operators to set up. Juki RS-1 places a wide range of component sizes, utilizes advanced laser centering technology for more precise placement and dynamically optimizes line balance for improved throughput. The Heller 1826 reflow oven has 8 temperature zones to ensure an accurate heating and cool down process.

Understanding 2021 Materials Challenges

Material 1
Future Electronics Q2-2021 Market Conditions Report shows a number of products on allocation or exceeding 52 weeks’ lead-time.

In periods of relatively stable demand, supply chain management (SCM) strategy focuses on ensuring material is available to meet demand within targeted cost. When a disruption hits the market, a good SCM strategy ensures alternate sources are available. This year, every electronics company’s SCM strategy is being tested as never before because as manufacturing ramps up around the globe in a world still experiencing some level of COVID-19 disruption there are material constraints across the board.

There are many reasons for the current market constraints:

  • Pent-up consumer demand for appliances and automobiles
  • Backfill of finished goods inventory for industries that shut down
  • Restock of rental car inventories
  • 5G infrastructure
  • Increased medical equipment demand due to COVID-19
  • Replacement products for businesses and homes damaged in 2021 weather events
  • Increased emphasis on electric vehicle production (which use double the resistors and capacitors in gasoline vehicles).
Material 2
Future Electronics Q2-2021 Market Conditions Report also shows a growing number of products whose longest lead-time estimates exceed 40 weeks.

Transportation cost and lead-time is increasing and cost is also increasing in a number of the base commodities used in components and printed circuit boards (PCBs).

So, how does a supply and demand imbalance this large get fixed? The short answer is that EDM’s purchasing and engineering teams are part of the solution. On the purchasing side, EDM’s supply chain expertise in identifying suppliers with available components combined with its financial ability to stock critical components in-house helps ensure good material availability. On the engineering side, EDM’s team is available to identify alternate components or support redesign efforts. For example, recently when a real-time clock crystal on a customer’s product went obsolete, EDM’s engineering team looked for drop-in footprint compatible replacements. When none were available, the team suggested a new layout which accommodated an available part. The customer adopted the suggestion and there has been no production interruption.

The challenges in today’s constrained materials market require a concerted effort to fully resolve. Forecast visibility is a critical element. With the current lead-times in some commodities, it is necessary to place orders at least 12-18 months out.   EDM’s purchasing team is working with both distribution and individual suppliers to assess lead-time trends in each commodity and adapt ordering practices to address increasing lead-times. EDM’s program management team works with individual customers with constrained material to identify product design stability and establish as long a forecast as possible.

No one in the electronics industry likes the current situation. When supply and demand is this far out of line, the reactionary environment impacts everyone’s profits. EDM is focused on executing an SCM strategy that ensures material availability for each customer while minimizing cost and liability, wherever possible. That said, the current situation requires EDM, its customers and its suppliers to work together in atypical ways.  Many of the product segments EDM serves are not experiencing the spikes in demand that are causing electronics constraints so it can be difficult to understand how constrained some components have become.

While 2021 represents a year of significant material challenges, EDM’s goal is to minimize material liability and cost, while ensuring each customer’s products are built and delivered on time.

Tips to Minimize Material Constraints

  • Share information on new product launches with EDM at least six months in advance. EDM’s engineering team may have suggestions on best choices for the approved material list (AML) based on availability trends
  • Provide a 12-18 month forecast for existing, stable products
  • Be open to recommendations from EDM’s team on potential substitutions, long lead-time orders or redesign options

The EMS Partnership: Four Areas to Audit

The term, “partnership” gets bandied about in electronics contract manufacturing relationships a lot. Both electronics manufacturing services (EMS) providers and their original equipment manufacturer (OEM) customers have differing views. The complexity of the EMS relationship is what sets it apart in the supply chain. An EMS provider is not simply building a product. They are managing a supply chain, enhancing quality and efficiency in production, and often providing post-manufacturing support. At the same time, they cannot do those things well in a vacuum. The term partnership is used because both sides need to support the end goal of putting superior quality product where it is needed, when it is needed. That requires discipline on both sides. EDM, an electronics manufacturing services (EMS) provider in Lynchburg, VA believes there are four key areas where this partnership needs to be especially strong. This whitepaper looks at the capabilities that should be in place in each of these areas and the partnership responsibilities of each side. These areas are:

  • New product introduction (NPI) support
  • Supply chain management
  • Efficiency enhancement
  • Post manufacturing support.

Read the full whitepaper here.

Aligning Product Development Teams and a Contract Manufacturer: Five Issues to Consider

While the production aspect of the electronics contract manufacturing model is fairly uniform across the industry, the engineering support aspect can vary widely. And while some assume contract manufacturer size influences its engineering resource strength, that isn’t always the case. At EDM, an electronics manufacturing services (EMS) provider in Lynchburg, VA, we apply engineering expertise to improve our customers’ competitive advantage wherever possible. This whitepaper looks at five areas where strong alignment among customer and contract manufacturer engineering teams can help lower costs and improve competitive advantage. These areas are:

  • On demand or “gap-filling” engineering expertise
  • DFX – Design for manufacturability, testability and assembly
  • Automation strategy
  • Component engineering
  • Support for future product generations.

Learn More About Trends in Medical Contract Manufacturing

Electronic Design & Manufacturing was recently featured in Medical Product Outsourcing’s annual EMS trends article. President & CEO Georgeann Snead discussed the importance of an EMS provider serving as a central point ensuring that all the pieces of a project come together. She also discussed ways EDM’s engineering team had been able to fill gaps created by OEM engineering team work-from-home situations during the height of the pandemic. Read the full article here.

Utilizing Automation to Keep Made in USA Electronics Assembly Cost Competitive

Most companies outsource manufacturing to lower costs in one form or another. Often there are tradeoffs in achieving that cost savings. For example, moving a project offshore may lower the cost of labor while increasing logistics and inventory cost. This drives a balancing act in terms of assessing advantages and disadvantages of a specific manufacturing location or contract manufacturer. At EDM, we apply engineering expertise to level the U.S. playing field whenever possible. We’ve found that when all costs are considered, an optimized automation strategy keeps labor costs competitive, especially when the cost advantages of improved responsiveness, and lower finished goods inventory in transit and simplified logistics are considered. This whitepaper looks at some of the ways we’ve applied this strategy. Read the full whitepaper here.

EDM’s Automated Potting Solution Reduces Time While Ensuring Uniform Fills

Does your product require potting? EDM offers this service using Glenmark Systems’ Portionator AM100. In this video, Joe Cowell (EDM’s Production Controller) explains the benefits of this machine and shows it running.

EDM’s Custom Solution to Handling and Tracking Moisture Sensitive Parts

When it comes to building quality into products, little things matter. One area of concern is moisture-sensitive parts. At EDM, our focus on quality includes a focus on keeping your parts safe from damage that can be caused by over-exposure to moisture.

EDM has always protected and tracked your moisture sensitive parts, but our new custom-designed software has improved our efficiency and accuracy of this necessary task. Take a look at this short video on why moisture can be a big threat to your PCBs and the innovative solution that EDM’s Engineering Team has developed.