5 Areas Engineers Impact Procurement

In putting together the slides for a technical review, I realized that two thirds of the staff at Lytica have technical degrees; mostly electrical engineering but also computer science, mathematics and related fields. While not a total surprise, it is unusual to have this technical depth in a supply chain company and it is also a reason why Lytica has such a strong focus on component engineering and a passion for educating designers about supply chain design.

One of our projects, the SCM Book Project, is our supply chain management book titled “Supply Chain Fundamentals: A Guide for Electronic Designers and Supply Chain Professionals” which is being written interactively online with our readers. When I write first drafts or revisions of chapters, they will be posted for comment by anyone interested in helping with this book. I am doing this so that the book is comprehensive, readable and relevant. I want a university level book that anyone can read to enhance their understanding of electronic supply chains.

The book’s focus on designers is critical because they influence so much of the supply chain, procurement and the performance of the electronics industry. While all of the progress made on design involvement is good, there are untouched areas that fundamentally affect supply chain cost and performance. I hope this book will be used to educate designers to influence their decisions towards supply chain excellence. I want to provide designers with tangible things that they need to consider and do during the design stage which will have real impact.

Following are a few of the concepts that I will be writing about in the book. I would appreciate your feedback on these ideas and related thought. Once the designer has made choices in these areas, supply chain professionals can do little about it.

  1. Architecture: Choices between hardware and software, commercial or custom, chipset platform need to be made with full knowledge of product lifecycle consequences.  Each choice affects risk, cost and supply chain flexibility.
  2. Pricing Leverage: Designers shouldn’t make design award to a manufacturer before appropriate pricing has been agreed. A supplier quote is not acceptable pricing. The price needs to be benchmarked to verify its appropriateness and, if inappropriate, negotiated. Once the award is made you have no leverage for years to come.
  3. Simulation and documentation: Often when products work with one manufacturer’s component and not another’s equivalent device, or if yields or rework rates are erratic, it is a sign that there is not enough design margin for the product to work over the specified ranges of temperature, voltage and manufacturing variations. It is important that designs are thoroughly simulated and that simulation files and results are documented.During the design process, the designers need to document what simulations or tests are required to verify that an alternative component would work. Obsolescence, disaster-driven shortages and cost-reduction that occur after the design team has disbanded are reasons to support this extra documentation effort. Once the knowledgeable designers are gone, the cost of substation verification goes up and the probability of the substation occurring goes down. The perceived risk of change is high due to the lack of detailed product understanding.
  4. Single points of failure: Many products are designed so that single points of failure cannot affect the product. The same should be true of supply chains. Alternate sources or, if not possible, a security of supply plan for each component need to be in place at time of product qualification or release.
  5. Design for portability: Product design determines what the manufacturing and test process looks like. If the test solution involves a multi-million dollar tester rather than product self-test or custom assembly equipment, a company’s ability to change manufacturing sources becomes constrained and negotiating leverage is reduced. Product designers should be cognisant of the lifecycle implications that their design choices have on manufacturing location options and sourcing flexibility.

These thoughts, amongst others, will guide the content of our book; I will provide updates on its progress in future blogs. You can also review the latest content and provide commentary on Lytica’s website under the SCM Book Project; let me know what you think.

By Ken Bradley – Lytica Inc. Founder/Chairman/CTO

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Ken Bradley

Ken Bradley is the Chairman/CTO & founder of Lytica Inc., the world’s only provider of electronic component spend analytics and risk intelligence using real customer data.

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