2018 has seen the chip market experiencing a period of nearly record demand, especially for chip capacitors, resistors, and memory such as NOR and NAND Flash.
Although this surge was largely anticipated by many industry analysts, the sheer scale of it nevertheless has caught even some of the world’s leading chip manufacturers off guard. Even some of the most commoditized components on the market have turned into valuable assets – and the struggles suppliers have had meeting orders have not only dramatically increased component prices and lead times, but have forced OEM customers to make difficult decisions regarding their products’ life cycles.
Compounding this issue is the recent trend of OEM outsourcing to EMS providers, who take the primary responsibility for the manufacturing and final assembly of the product. One of the benefits of outsourcing, in theory, is to share the burden of manufacturing between two equal partners. In reality, however, this more often results in significant push and pull over who bears responsibility for the procurement of the necessary critical components. Should stock for a component experience a shortage, who should make the final judgment call on how to best react? High demand means time is of the essence, and waiting for final approval from an OEM is a luxury many EMS providers simply do not have.
The cure-all for these issues is to find a way to increase the window of time for OEMs and EMS providers to react in this competitive marketplace. This means not only reacting to component allocation at the point of designation, but taking a proactive approach to realizing the signs of impending allocation before it occurs. This will give the company a head start in the race to submit orders for viable alternative components before the competition realizes what is happening.
Unfortunately, the idea of predicting allocation, historically, has been nothing more than a pipe dream — an inherent market need that the supply chain industry has yet to find a way to fill.
EDX Electronics, as part of our BOM Monitoring Solution, is the only supply chain service provider on the market that can actively predict component allocation.
The secret to our unique solution is our access to Big Data. For over a decade, EDX has been collecting data on electronic components and semiconductors. In fact, our open-source Big Data platform Partstat consists of over 9 billion rows of current and historical data on over 25 million unique electronic components and semiconductors – courtesy of over 2,000 global suppliers which include industry heavyweights such as Arrow, Mouser, Avnet, and Digi-Key.
From there, this data is then combined with a series of advanced algorithms which allow customers to easily price, monitor, predict, and, with our help, confirm the life cycle status for virtually any electronic component, semiconductor, or peripheral product in a real-time model. Our data is updated every 15 minutes, and if lead times for a critical component are trending toward allocation, the customer will immediately be notified. In a fast-moving sellers’ market, the extra few weeks or month window this provides can prove invaluable. From the day we introduced our service, the customer response from OEMs and EMS providers alike has been overwhelmingly positive.
Allocation can be predicted and ultimately overcome, and EDX can prove it. For more information about our BOM Monitoring Solution, including our ability to monitor for component obsolescence, click here.