1. Supply Chain Management for Electronics Manufacturing Contract
Due to the fast development of the global electronic business, an ultra-competitive, shorter product cycles, quick turnarounds, faster time-to-market requirements, and effective supply chain management system are just a few of the challenges that every OEM project has to face.
As part of the manufacturing operations of electronics systems and PCB production, the function of supply chain management is imperative. Without a whole aspect plan, shortages of components or raw materials may cause a decline situation. On the contrary, a burden of oversupply and inventory can cause large carrying costs which can affect profits.
Then, it is important to manage the information from customer to the final end-delivery & stock management.
2. Project Objectives Promote Inventory
The project should control the targets for the acceptable amount of inventory to hold at all aspects of the production process. This will include:
- Design and Engineering
- BOM Components
- Raw PCBs
- Mechanical Housings
- Cabling Harnesses
- Manufacturing Process: 3D Print, CNC Machining, Rubber Keypad, Wire Cable, Stamp Press, PCB manufacturing
- Quality Assurance
- Packing Process
- Global Logistics
- Warranty & Repair Service
The required financial of the project will drive the procurement orders, and identify the quantity of material that can be held on-hand in the working process.
Despite your enterprise, it is important to collaborate with your CM to identify what they can stage at different points in the manufacturing process–Raw materials, Partial/Sub-assemblies, Finished Goods Inventory. A comprehensive logistics plan is necessary to consider all impacts involving all stakeholders factors–internal, CM, distributors, vendors, order fulfillment, shipping, and customers.
In order to establish logistics planning for components & parts, review the entire BOM for long lead-time items and custom components. Based on the manufacturer and the distributor, each BOM item shall have a lead-time.Once the longest lead times are identified, a worst-case logistics schedule could be planned. Full kitting services by your CM can push the burden of this component logistics to their operations team, instead of owning this scheduling internally with your own direct procurement.
Ideally, each component listed in the BOM should have multiple substitutes available. For best planning purposes, identify as many practical substitute components that can be as close to your inventory as possible. This will mitigate the unfortunate circumstance when the primary components are unavailable due to shortages, long lead times or obsolescence. By kitting a system BOM through your CM, a list of viable substitute components can be made available for comparison and selection at the time of quotation.
4. Planning and Forecast
Logistics scheduling will be determined by order patterns based on end-customer demand.
Demand forecast is core to driving order rates and establishing a final logistics plan.
The old adage prevails that without accurate information, garbage in equals garbage out. An electronics manufacturing platform with a network of manufacturing sites can provide access to a factory with optimum capabilities for your needs to minimize logistics hassles.
The logistics of receiving materials into the inventory department at the factory should be reviewed with your CM. This will include how they receive material into their system and the time duration until component availability on the manufacturing floor. By planning to this detail, scheduling of new builds at the CM can be done with a single day resolution. Keep in mind that there may be up to three part number designations to manage for a single component – the manufacturer’s part number, your internal part designation for your schematic and the contract manufacturer’s number. All three have to be in agreement across the entire BOM within your business intelligence databases.
From the start of the manufacturing lifecycle, the lead time from end product forecast, order and delivery will determine the cycle time and these factors will dictate logistics:
- Ordering lead time
- Amount of inventory to be held
- Assembly schedule
- Intermediate shipment duration
To gain manufacturing insight advantage, collaborate with your CM for the best ways of sharing information across business intelligence tools. Forecast, purchase orders, inventory count per stage, and order fulfillment by the CM are all analytic data that can be leveraged with your CM partner for logistics optimization
5. Plan B in Advance for Future Uncertainty
Some very high-performance systems may reach the technical limit of acceptable sales internationally to the point where they may be restricted by the US Commerce Department. A clear set of technical thresholds are defined by the agency to establish what products will have an export restricted designation. If this is the case for your system, the first set of logistics defense is to have your business planning tools prevent any unauthorized movement of products that could be in violation. These criteria will include product model, geography within the world and the final customer delivery point. However, manufacturing locations also need to be considered when planning for these products. Intermediate points in the manufacturing process may be considered a final product, so the qualification of the performance at a given factory location should be vetted
When high demand creates limited available manufacturing capacity for a given time, it is important to establish product priorities with your CM. Otherwise, this decision is left up to unauthorized interpretation.
6. Parts Obsolescence Management
For many reasons, a lot of parts manufacturer may choose to discontinue selling some particular components, rendering it obsolete. Sometimes they may offer a pin for pin substitute, but this scenario cannot be relied upon. What is typically offered in this situation is an opportunity for “Last Time Buys” over a one to two year time period. This creates a need to develop a plan with your CM to hold inventory and transition to a different BOM. A component obsolescence review plan should have a review owner that either gets automated alerts from manufacturers or intentional software tools that routinely checks for updates. Your CM may have access to this information across wide distribution channels. These verification should have a known periodicity. Eventually, a final decision maker within the design team needs to be identified for a change to the BOM for obsolete part substitutions.
Similarly, gray market components for your system should be avoided with every effort. These spoof devices are maliciously inserted into channels with the intent of masquerading as their authentic electronic counterparts. The fake components may have come from the scrap bin of a semiconductor assembly supplier or re-marked grading from another entire product. Even worse, they may be completely empty packages. Nearly full price can often be charged for the devices with the unsuspecting buyer not becoming aware of the problem until weeks later during a final electrical test step. In times of long lead times, scarcity or deep discounts, using unapproved channel distribution can seem enticing. However, without properly purchasing material through authorized channels that are sanctioned by the original manufacturer, there may be no guarantee that the components are bonafide. It is best to work with a CM that only source parts from reputable distributors.
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