The design of PCBs for manufacturing is complex enough without worrying about the logistics of component and material acquisitions. The purchase volume can make it highly susceptible to market forces, and those without experience dealing with procurement may find themselves burning through budget or unable to meet production timelines while awaiting delivery. Instead, a trusted contract manufacturer (CM) can guide the component procurement process. Not only does a CM have ample experience stepping through the procurement process, but they can use their bulk purchasing power to reduce per-component costs below what design teams with new product introductions (NPIs) or other limited-volume production runs can feasibly achieve.
| Improving Component Procurement | |
|---|---|
| Alternative Components | Designers can work with their CM to source alternate components that offer identical or similar performance to the requested components. |
| Optimizing Lifecycle Purchasing | Component manufacturers can discontinue product lines after developing an improved or replacement component. Shrewd CMs can time purchases at the first sign of end-of-life (EOL) production to maximize purchasing power. |
| Multi-Vendor Sourcing | With component allocation (a cap on purchase order sizes to ensure all customer orders are at least partially met), a CM can coordinate with multiple vendors to meet the PCBA’s procurement requirements. |
The Variables of Component Procurement
Component procurement starts with the BOM, but this can be misleading as the BOM can vary throughout the design process as the scope of project functionality changes and in response to market supply. As manufacturer supply dwindles or remains on backorder, procurement teams may face one or several challenges in securing the assembly as requested:
- Cost – The simple response to a low supply is a greater purchase cost. Depending on the PCB project, this may be acceptable in the short term or for low production quantities where optimizing per-board costs is less of a factor than starting or maintaining production quantities. However, this is usually not a viable long-term strategy as it eats into per-board profit (sometimes significantly).
- Lead times– Few or constrained component supplies mean that lead times are more likely to extend far enough to impact production schedules and require creative procurement solutions.
- Availability – Due to component allocation, Procurement teams may have to source orders from multiple vendors/resellers. Manufacturers use this method to attempt to supply constrained components fairly to all purchasing parties.
A CM Can Improve Manufacturing Outcomes With a DFM Focus
In the wake of manufacturing shutdowns and slowdowns due to intentional and unintentional under-staffing, component procurement remains challenging even several years out. While efforts are underway to fortify the component manufacturing sector domestically and internationally, procurement and design teams need to be on their toes to navigate the many potential issues with ongoing supply issues. When evaluating the design during simulation or after limited production prototyping, ask these questions to make the design more impervious to supply chain fluctuations:
- Is a function necessary? – Feature creep is a real issue as devices must contend with pressure from the Internet of Things (IoT). Designs should be lean, covering only the features/functionality necessary for operation and end-user expectations. While working through the schematic and BOM, designers can differentiate between defining and nonessential circuit blocks.
- Can performance handle a reduction in quality?– Regarding assembly performance, quality is often a measure of tolerance, i.e., how long, at what temperatures, or to what precision/tolerance can this component operate? Suppose manufacturing processes or end-use environments are not particularly demanding. In that case, designs can substitute more cost-effective components that meet the design intent with minimal effects on the product lifecycle.
- Can the design accommodate alternative packages?The form factor of designs can be incredibly exacting – especially when dealing with consumer electronics – but if the MCAD-ECAD integration, board size, etc., have some wiggle room, designers can substitute through-hole packages instead of SMD (as one example). These packages, whether because of a larger landing pattern area or a more intricate assembly process, usually have greater supplies, shorter lead times, and lower per-unit prices, making them ideal for substitution if the design permits.
A CM with ample PCB assembly experience can leverage industry contacts to aid sourcing. Since CM’s bulk orders are likely larger than design teams sourcing for a single project, designers working with a CM can enjoy improved per-unit costs that enhance profitability. Additionally, since a CM needs to build inventory for many potential PCB assemblies at any one time, on-hand availability of components may encompass the totality of manufacturing needs, all without worrying about lead times that can extend out weeks and months at a time.
Your CM Simplifies Procurement and Other Manufacturing Processes
Component procurement is a necessary step in a fabricated bare board through final assembly and in providing the essential functionality and features of the electronic device. Therefore, a straightforward procurement process that proceeds without issue (or unmanageable expenses) will keep PCBA production on schedule and within budget. An experienced CM can take the reins during procurement and let product developers focus their skills and time on their areas of expertise. At VSE, our engineers are committed to building electronics for our customers. We and our trusted manufacturing partners have delivered quality and reliable products for life-saving and life-changing applications for over forty years.
