“Engineers realize that they must design their products from the outset to allow for the possibility of switching to other components and suppliers midway through, allowing more flexibility in their designs. Designers must have a better understanding of procurement and supply chain, and work more closely with these functions, so that engineering teams are well prepared to change direction quickly if necessary to ensure long-term business continuity.
Since Avnet began investigating the component shortage challenges facing its customers in late 2021, the industry has continued to find solutions to the current predicament, and progress has been slow.
But when the industry actually finds this ultimate solution, the world of Electronic engineering as it is known will be revolutionized and will lead to stronger partnerships with procurement and supply chain experts.
This dilemma is not just because manufacturers are temporarily unable to supply specific devices. Demand for electronic components is on the rise for everything from cars to light bulbs, with no end in sight. While component suppliers are expanding capacity, there is still a supply-demand imbalance for the thousands of electronic components the industry needs every day.
We are going through an unprecedented test that will affect every aspect of people’s lives.
To get out of this predicament, two major shifts in mindset must be made:
• Treat inventory more as an asset than a liability in manufacturing
• The design process will be more than just a board design consideration, it will be an important consideration in device selection along with sourcing and supply chain
Parsing chip shortages
One of the key findings of Avnet’s inaugural “Analyzing Chip Shortages” report is that global component shortages are not only extending order fulfillment times and lead times, they are also changing product designs, prompting design engineers to find new ways to integrate them. products to the market.
Key findings from the survey of 530 engineers worldwide, released on March 1, include:
• 75% of respondents indicated that access to electronic components has become a very significant challenge due to supply shortages.
• 93% of respondents said they experienced a significant impact from longer lead times.
• Designers are looking for other ways to obtain electronic components, such as through agency channels.
• The majority of respondents are concerned about the control of counterfeit products.
• 64% of respondents said they design with electronic component availability rather than preference in mind.
Components are still “hard to find”, and most respondents expect shortages to intensify
In this survey, 75% of the engineers surveyed said that obtaining electronic components has become a very significant challenge. Engineers in the telecommunications industry are even more stressed, with 83% of respondents saying they are facing major challenges.
Of those respondents who have been significantly impacted by chip shortages, 93 percent cited extended lead times for electronic components as a top challenge. At the same time, respondents also said that production schedule delays (74%) and price increases (72%) also had a significant impact on them. Although the specific impact of each industry is different, for example, the telecommunications, aviation and electronics industries may be most affected by the price increase, but everyone’s prediction of the future trend is the same.
There may be more challenges in the future. Of the respondents who were forced to delay production schedules, 75% said the delay was less than six months. But the vast majority of respondents (96%) are concerned that delivery times will be further extended and prices will continue to rise over the next year and a half.
Create greater value with distribution partners
Engineers realize that they must design their products from the outset to allow for the possibility of switching to other components and suppliers midway through, allowing more flexibility in their designs. Designers must have a better understanding of procurement and supply chain, and work more closely with these functions, so that engineering teams are well prepared to change direction quickly if necessary to ensure long-term business continuity.
The automotive market is a good example of how a mature industry must be able to turn nimbly in order to follow the trend and keep moving forward. According to industry estimates, about 300,000 electric vehicles will be sold in 2020, and 35 million electric vehicles are expected to be on the road by 2030, which will drive rapid changes in the automotive industry. As the size of the electric vehicle market expands, the existing charging infrastructure begins to appear “stretched”, and insufficient charging facilities may constrain the development of electric vehicles. According to public data, as of the end of 2021, the number of new energy vehicles in China is 7.84 million, the number of charging piles is 2.617 million, and the vehicle-to-pile ratio is 3:1. This also means that there is still a large gap in the domestic charging pile market. In fact, the problem of the charging pile market has also attracted the attention of government departments. Various localities have introduced relevant policies to promote the planning and construction of charging infrastructure. These moves will also further deplete the electronic components available in the market.
In this regard, a strong and outstanding distribution partner can really help customers add value through a comprehensive design approach. This is also where technology distributors and solution providers such as Avnet can come into play. As a distribution partner, Avnet is able to combine extensive design expertise with deep data-driven insights, allowing engineers to take a holistic view and thinking beyond board design, choosing options that allow them to remain flexible Component selection in an agile and agile manner to prepare for any future supply disruptions.
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