{"id":421,"date":"2020-11-16T23:40:43","date_gmt":"2020-11-16T23:40:43","guid":{"rendered":"https:\/\/supplyframe.com\/?p=421"},"modified":"2022-09-26T11:55:08","modified_gmt":"2022-09-26T10:55:08","slug":"supplyframe-electronics-sourcing-report-highlights-innovation-imperative-amid-covid-19","status":"publish","type":"post","link":"https:\/\/intelligence.supplyframe.com\/ko\/supplyframe-electronics-sourcing-report-highlights-innovation-imperative-amid-covid-19\/","title":{"rendered":"Supplyframe Electronics Sourcing Report Highlights Innovation Imperative Amid COVID-19"},"content":{"rendered":"

Study Illustrates Why Connected New Product Introduction Is More Important Than Ever<\/strong><\/p>\n\n\n\n

May 19, 2020 09:00 AM Eastern Daylight Time
PASADENA, Calif.–(BUSINESS WIRE)–Product innovation remains incredibly important in our new normal, but more than half (53%) of electronics industry product launches have been delayed or cancelled due to the pandemic, according to a new Dimensional Research study commissioned by Supplyframe. The \u201c2020 Trends in Electronics Sourcing\u201d report indicates that COVID-19 also has led to increased component costs, the need for manufacturers relying on the global electronics value chain to rework their products, and the inability to fill customer orders. That is especially problematic now, in a challenging economy that has increased the importance of driving new business revenue and protecting margins.<\/p>\n\n\n\n

\u201cRisk does not exist solely in post-product release endeavors. Eighty percent of the lifetime risk and cost of a typical hardware product is decided during that product\u2019s initial design. Companies need to examine what\u2019s happening in the design phase because that\u2019s where the disconnect often exists.\u201d<\/p>\n\n\n\n

The study is based on an online survey of 217 decision-makers responsible for sourcing electronic components at global manufacturers across high tech, industrial equipment, automotive, aerospace, and medical device companies with 500 or more employees.<\/p>\n\n\n\n

The vast majority (91%) of respondents indicated that sourcing issues are the cause of product launch delays. An even greater share (95%) of the survey group agreed that the path to solving component sourcing issues requires integration of engineering, sourcing, finance, and supply chain teams, including external partners. This points to the importance of de-risking design as early as possible in the design cycle.<\/p>\n\n\n\n

\u201cNew product introduction \u2013 NPI \u2013 is never easy, but the shortages experienced during the coronavirus pandemic have created a new set of challenges for manufacturers across the globe,\u201d said Steve Flagg, CEO and founder of Supplyframe. \u201cThis experience puts greater emphasis on the importance of building resilient supply chains. That starts in the product design phase with a connected NPI process \u2013 enabling effective collaboration across sourcing, engineering and manufacturing by injecting prescriptive intelligence at every decision point.\u201d<\/p>\n\n\n\n

The Coronavirus Is Impacting All of Us \u2013 and the Electronics Value Chain Is No Exception<\/p>\n\n\n\n

The study highlights the broad effects of the COVID-19 pandemic. In addition to the related product launch impacts, 37% of companies surveyed said their overall component costs have increased. The same share said they are unable to fill customer orders. Nearly as many (35%) said they need to rework products to replace components that are no longer available.<\/p>\n\n\n\n

Slightly less than a third (31%) said they are now onboarding new suppliers without going through approved vendor qualification processes \u2013 increasing their risk. A fifth (20%) said they have an unusually high number of mistakes due to team members\u2019 stress and distraction. Nearly as many (17%) said they have been forced to select lower-quality component options.<\/p>\n\n\n\n

Lack of Collaboration Between Engineering and Sourcing Teams Contributes to the Pain<\/p>\n\n\n\n

COVID-19 is just one contributing factor to these challenges. Other prevalent factors include the long-standing global supply chain complexity, inadequate enterprise systems, and limited collaboration between internal engineering and sourcing teams during new product design.<\/p>\n\n\n\n

The lack of collaboration can add to costs, lead to product launch delays, and expose manufacturers to greater market risks. It can also jeopardize the reputation and success of engineering and sourcing professionals.<\/p>\n\n\n\n

Seventy-nine percent of the survey group said that collaboration issues have caused product introduction delays, which slows time to revenue. Sixty-two percent of this group said delays happen occasionally, and close to a fifth (17%) of them said it occurs frequently. Meanwhile, 85% of the total survey group said engineers select components that can\u2019t be effectively sourced, which could be related to inaccurate market intelligence. The inability to consider accurate lead times leads to greater costs for manufacturers \u2013 a whopping 81% of the survey group said they have been forced to make expensive spot buys because of component availability issues.<\/p>\n\n\n\n

Addressing material, quality and government regulations is another industry pain point, as 93% of the survey group said that compliance negatively impacts sourcing processes. Sixty-two percent said regulatory requirements often require rework. The research indicates that compliance concerns often slow component selection (61%) and negatively impact component availability (34%).<\/p>\n\n\n\n

Existing Systems Do Not Improve Decision-Making and Reflect Changing Market Realities<\/p>\n\n\n\n

While many businesses have enterprise systems in place, more than three-fourths (77%) of respondents identified their enterprise resource planning (ERP) and product lifecycle management (PLM) systems as inadequate for managing risks in electronic component sourcing.<\/p>\n\n\n\n

And 89% said they have challenges with existing applications used for sourcing electronics components. Of this group:<\/p>\n\n\n\n

39% said new product component selection frequently requires bill of material (BOM) cleaning and revisions,
36% said workflows bring sourcing teams in too late to effectively influence design decisions, and
35% said existing sourcing technologies are inflexible and unable to respond to unplanned events like hurricanes and pandemics.
These archaic solutions also lack cost optimization capabilities from which electronics companies could benefit. Indeed, 81% of those surveyed said their sourcing applications prevent them selecting optimal cost options \u2013 with more than half (54%) running into this problem occasionally and nearly a third (28%) dealing with this challenge on a frequent basis.<\/p>\n\n\n\n

Businesses Can Gain More Control and Predictability With Advanced Sourcing Technology.<\/p>\n\n\n\n

\u201cUncertainty and complexity are constants in business today. But global manufacturers have more control of managing their electronics sourcing risk than they may realize,\u201d said Flagg. \u201cRisk does not exist solely in post-product release endeavors. Eighty percent of the lifetime risk and cost of a typical hardware product is decided during that product\u2019s initial design. Companies need to examine what\u2019s happening in the design phase because that\u2019s where the disconnect often exists.\u201d<\/p>\n\n\n\n

When engineering teams select components and suppliers without input from procurement and sourcing teams, they may overlook better options, potential cost savings, and other factors that could lead to improved lifetime product margins and revenue. But when these teams collaborate effectively \u2013 and have access to market intelligence about real-time inventory availability, cost and changes \u2013 they can balance cost and risk concurrently. Indeed, 99% of the survey group reported direct benefits from early collaboration between engineering and sourcing teams.<\/p>\n\n\n\n

About Dimensional Research<\/strong>
Dimensional Research provides practical market research to help technology companies make their customers more successful. Our researchers are experts in the people, processes and technology of corporate IT. We understand how technology organizations operate to meet the needs of their business stakeholders. We partner with our clients to deliver actionable information that reduces risks, increases customer satisfaction, and grows the business. For more information, visit dimensionalresearch.com.<\/p>\n\n\n\n

About Supplyframe<\/strong>
Supplyframe is the leading intelligence platform for the global electronics value chain. Our solutions sense and interpret billions of intent, demand, supply, and risk signals to deliver insights at key decision points throughout the entire design-to-market product lifecycle. Over 10 million engineering and supply chain professionals worldwide engage with our SaaS solutions, search engines and media properties to power rapid innovation and optimize in excess of $120 billion in annual direct materials spend. Supplyframe is headquartered in Pasadena, Calif., with offices in Austin, Belgrade, Grenoble, Oxford, San Francisco, Shanghai, and Shenzhen. To join the Supplyframe community, visit supplyframe.com and follow us on Twitter, Instagram and YouTube.<\/p>\n\n\n\n

Contacts
Gabrielle Jasinski
gabrielle@bospar.com
708-732-3913<\/p>","protected":false},"excerpt":{"rendered":"

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