AVNET INSIGHTS
/ PULSE ON THE SEMICONDUCTOR SHORTAGE
Original Equipment Manufacturers (OEMs) are still struggling to get parts
Despite the reported uptick in production capacity at some chip makers, close to two-thirds (60%) of the 1,605 engineers and procurement and supply chain professionals we surveyed say that access to components is somewhat or much worse than a year ago. That’s one of the key findings of Avnet’s recent survey, conducted in September 2022.
The survey is a follow-up to an extensive research study, Deconstructing the Chip Shortage, conducted in 2021. It explored how the shortage was impacting product design. The goal of this recent survey was to find out the degree to which the situation has changed from a year ago and identify strategic actions companies are implementing to manage it.
of the professionals surveyed said that access to parts is somewhat or much worse than a year ago.
Cascading effect on product development cycles
The latest results show that the chip shortage continues to impact product development cycles. When preferred parts are not available, engineering teams continue to employ a range of tactics, including the use of drop-in replacements (24%) and board redesigns (24%). But that comes at a cost.
As teams redesign existing products around available components, they are diverted from working on new products. Even when teams have been able to complete new designs, the cycle time can be impacted by the inability to get even small quantities of parts to build boards that are needed for prototyping—pushing schedules even further out.
of respondents report lead times are somewhat or much worse than in the past.
Signs of optimism and a more strategic response
Even under difficult circumstances, there are encouraging signs. Lead times for some part categories are stabilizing and even improving.
The ongoing challenges have underscored the need for and importance of more strategic design and supply chain initiatives to achieve greater resiliency. Nearly a quarter of respondents (23%) have begun testing and qualifying multiple parts that meet requirements early in the design process. Additionally, organizations are adjusting their supply chain strategies to build up more buffer inventory (23%) and lengthen supply agreements (21%).
Companies are also rethinking work practices to improve communications and agility. Nearly half (48%) of respondents say they plan to establish stronger collaboration between procurement and engineering, 25% say they will include procurement on cross-functional teams, and 23% plan to establish these cross-functional teams for decision making.
Discover more results from the Avnet survey: “The chip shortage: From efficiency to resiliency”
Get help managing the chip shortage with MyAvnet, a set of online tools to build orders and buy parts. MyAvnet’s easy-to-use BOM tool provides details of all possible part alternatives, including availability.
Hear more about how companies are coping with the challenges of the current parts shortage. Learn about their strategies for managing uncertainty in the long run on the Distributing Wisdom Podcast series.