For a company like SoPark, which custom manufactures circuit boards for the medical device and industrial industries, navigating the electronics supply chain has been a nightmare.
Flexibility and communication have been key for the company’s ability to fulfill orders and maintain customers.
“If there’s 100 parts, 99 of them are coming in but that last part is being pushed way out,” said Linda Whittaker, vice president of program management. “We’re asking the customer, ‘Do you have an alternate for that part, or do you have any stock of your own, or any way to get it for us?’ It’s changing rapidly. We can quote a part one day, and the next day it’s gone.”
The company doesn’t do the design work, according to Rupa Shanmugam, president and CEO. Instead, it receives a bill of material from its customers, buys the needed components, builds the circuit board according to the customer’s specifications, then ships it. Three weeks used to be a typical lead time, but that’s no longer the case.
Any parts coming from big semiconductor companies—like Texas Instruments, Analog Devices, Microchip Technology and NXP Semiconductors—have lengthy lead times because they can’t get the materials to make products, Whittaker said.
“Even normal capacitors and resistors are very hard to get right now,” she said. “Anything with memory is the worst right now.”
A majority of SoPark’s supplies come from overseas, Whittaker said, which is why the CHIPS and Science Act — a new federal law designed to increase domestic semiconductor production and manufacturing —will be helpful to the company in the long-term.
“It isn’t going to help our immediate problem, but yes we are watching it,” Whittaker said. “Hopefully, they build fast.”
Dee Meer, a buyer and planner for SoPark, said she recently was quoted May 2023 for a part. When she asked for it to be expedited, the shipping date was postponed to December 2023.
“The customers have been great trying to get us things from their own suppliers, but they’re paying so much more,” Meer said.
Some customers have gotten creative, Meer said, redesigning a circuit board with a different part or material that might be more available.
Many of their customers are ordering further in advance, letting them know what their needs are through 2023, Whittaker said.
“So instead of our orders being down, our backlog is strong,” she said.
Shanmugam said the company has started receiving parts ordered last year, so production is picking up again. Still, they expect the supply chain will continue to be a headache through mid-2023.
“I have to hope that the middle to end of 2023 puts us in a better situation than we’re in now,” Whittaker said.
Until then, the company will continue to adapt by being flexible with customers and increasing communication.
“It’s all about communication with the customers,” Shanmugam said. “They understand, because they’re in the same boat.”
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