Issue link: https://iconnect007.uberflip.com/i/1447212
FEBRUARY 2022 I SMT007 MAGAZINE 39 of their factory overheads, it's been hard. We are trying to keep them at an efficient level, so their cost structure will be a little more advan- tageous for us. Matties: You're talking about the buyers; obvi- ously they're going to pay the price, because it's not like they can go next door and get it any quicker or cheaper. ere's no alternate source that's not in the same boat. O'Neil: For the first six to nine months of the pandemic, new customer acquisition was down, and the amount of customer attrition was basically zero because any supply chain changes which were in process were basically put on the back burner. Or it was, "We're not going to introduce risk by looking for new suppliers right now. We're going to go with known commodities, because we can't afford to have a hiccup and not be able to get on a plane and put eyes on a problem." Everything was about de-risk. But in this "pan- demic 2.0," it's about doing everything you can to keep supply flowing. at might mean seeking new sources that you haven't vetted as much as you would have done pre-pandemic; there's all sorts of, say, risky behavior going on to try to address the problem. Matties: e threshold for risk has certainly dropped. What other compromises do you see? For example, is there a simplification of products? Are they trying to get a result with less supply-based demand? Is there a simplifi- cation going on to keep the number of compo- nents down, to keep technology to just abso- lutely what's necessary? O'Neil: at's a good question, and I don't know. I know that designers are being held to best practices a bit more. If you've got a com- ponent library, design engineers must stick to it. Before, it was, "I've got a 1% and a 10% toler- ance option in my library, and I want to put 5% in there; okay, I can do it." Now it's, "If you've got 1% and 10% in there, choose one of those two. Don't introduce a new part number." It's that mentality. ere is a lot of pressure on that design community to design for availability, if you will. ere's still six to 12 weeks from the point they make that component selection to when they're going to have any kind of demand beyond a first five units. It's a tough ask for them to manage that sup- ply chain sustainability at a future date for an unknown quantity. ere has always been some appreciation for designing with things that actually exist and that are available in a reasonable cost window. Cost has always been in the equation, but availability has likely over- taken that cost piece. Johnson: Joe, some of the design teams that I've talked to or heard about seem to be designing with multiple BOMs, so that they can use this or that component depending upon what's available while maintaining fit, form, and func- tion equivalence. But that makes for four or five flavors of their product in different config- urations depending on what they can get. How does that complicate things for EMS compa- nies? O'Neil: I think the typical BOM breaks down into active components, passive components, connector sets, and maybe some boards. Tra- ditionally, with passive components, you could throw anything in there and they would say, "It's a capacitor, just throw one in there," to a better practice such as, "ere are three or four Cost has always been in the equation, but availability has likely overtaken that cost piece.