Issue link: https://iconnect007.uberflip.com/i/1406534
48 SMT007 MAGAZINE I SEPTEMBER 2021 in stock a month ago, or even a couple of weeks ago, is still in stock. For passive components, you should find alternates ahead of time. Someone will send us a bill of material, the component is out of stock, they send us an alternate, we dou- ble-check on that, get an ap- proval to purchase it, go back to the vendor and it's out of stock. is happened in 2018, and we see the cycle again this year. It can happen two or three times in a row—if we have to go back and forth repeatedly, each cy- cle has us requoting it, getting approval, order- ing it, and a potential for that part to go out of stock. Whoever you're working with as an as- sembler, get some alternatives ready so that you can stop that cycle. Also, be on top of your communication. If an engineer sends us a design on ursday, we send it back on Friday and tell them, "ese parts are out of stock. Can you give us some al- ternates?" en they send us some alternates. By Friday aernoon, we can quote, determine they're in stock and order right then. But when they don't get back to us with approval until Monday, those parts could be out of stock al- ready. So, be willing and able to communicate at a moment's notice. Johnson: ere's this dynamic that feels like you're dealing with agricultural futures pric- ing—pork bellies or something. Benson: Some brokers are buying out popu- lar inventory; things that would have cost 30 cents, now they're saying, "You can buy a hun- dred of them for five bucks each." ey're play- ing that game. And then they're bidding them: "Oh, you'll pay five bucks? at other assem- bly house or that other manufacturer, they'll give me $6.50 for them. How desperate are you?" Speculation, I think, has become an un- welcome part of the economy, whether we like it or not. Demand-based pric- ing has its place, but when it's minute by minute and it be- comes exploitation, that's not good capitalism. Johnson: It sounds like having alternates is a good business practice for the design team even as they're preparing to go into prototype? Or should they wait until they're prepping for manufacture? Benson: It goes from prototype into manufac- turing. When you're going into volume man- ufacturing, say you need 150,000 of a particu- lar resistor, and the manufacturer can buy all those reels for the first three months. But for the next three months, that part is gone, and it's a 24-month lead time. In this case, have a couple of alternatives and unfortunately be willing to commit for longer-term inventory. e car manufacturers are getting hammered right now, partly due to the great number of electronics components in the cars, but also due to just-in-time ( JIT) inventory. at was really the savior of manufacturing back in the '80s and '90s with everybody converting to just-in-time. It cut costs down and minimized waste. JIT may not be the best strategy for the next year or so. Just don't go crazy and buy up everything like the car manufacturers did in 2018. e other thing is to go for the smaller com- ponent sizes. If a fab company is trying to spin back up and they have a choice of making a bunch of 0402 or 0201 components on a wa- fer vs. 0603s or 0805s, which require consider- ably more material for the same spec compo- nent, what are they going to do? e finished components cost about the same. ey're go- ing to go for the smaller sizes because you get significantly more per unit of raw material. So, designers who have not yet bridged that gap to the smaller components need to do so because that's where the supply is going to be—smaller Duane Benson