Current Situation of Supply Chain of Connector Industry | MOCO connector
Over the past few years, it seems like every news story has covered supply chain issues or shortages. While semiconductors have received most of the media attention, especially due to shortages of automotive chips, shortages of commodities and challenges facing the freight industry have compounded the challenges posed by the backlogs and lockdowns that began in 2020. Two years into the pandemic, supply chain challenges continue across the electronics industry, ultimately affecting consumers and manufacturers.
Electronics designers need to be agile and creative when selecting connectors and suppliers. Unlike some semiconductor component classes, connectors are one area where designers are free to choose alternatives that meet component performance specifications. By helping companies manage inventory and costs, investigating the supply chain early helps ensure sustainable production of the final product.
Electronic Connector Supply Chain Challenges
At a high level, the connector supply chain faces two challenges that hinder sustainable sourcing and production. The first is the ongoing labor shortage for connector manufacturers and shipping companies.
The reduction in capacity is due both to the demand for connectors and to the company's efforts to meet customer demand for other products. At the start of the pandemic, many shipping lines chose to shorten their shipping schedules. As a result, shipping companies have struggled to keep up with the rapidly growing demand.
Another important challenge facing the electronic connector supply chain is the availability of raw materials due to the turbulent commodity prices. In addition to shipping prices, material price increases are passed on to customers and ultimately consumers. Companies are now creating multiple orders and holding large inventories when prices are low to hedge against later swings in material prices.
For designers, these conditions at the manufacturing and distribution level present component selection challenges. Some notable component selection challenges, especially for smaller designers, include:
Companies are mixing standardized connector styles from different manufacturers with varying degrees of compatibility.
Most connectors come in pairs, but only one side of the connector needs to be out of stock, making the connector option unsuitable.
Some connectors have proprietary terminations for interoperability and cannot be interchanged with suitable replacements such as RJ45 connectors.
The connector industry has had a record year in terms of revenue due to an unprecedented supply and demand imbalance. However, order backlogs across the industry have ballooned. The global connector market is expected to reach $82.5 billion by 2022, according to market research firm Re reportLinker. At present, the backlog of orders has reached billions of dollars.
So what can companies do to ensure they have a sustainable connector supply chain and sufficient inventory of connector options? While there may not always be a perfect replacement for every connector, there are several strategies that can help companies weather shortages and ultimately ensure more sustainable production.
While some applications may prefer to use a specific connector, this can be achieved with alternatives that meet or exceed the required specifications in the product. For example, when the desired connector style is out of stock, it can often be replaced with an equivalent connector with a higher specification, such as a connector with a higher IP rating or power rating. Some strategies for implementing replacement include:
Take a combined signal/power connector and replace it with two or more separate connectors
·Use vertical board mount connectors instead of right angle connectors
·Use higher pin count connectors
·Use stronger connectors, such as stainless steel, instead of plastic
Work with a manufacturer closer to your assembly plant; this greatly reduces shipping costs
These simple measures can help you deal with shortages or high prices without compromising performance specifications. The challenge, of course, is that these swaps may require some changes to the PCB and/or enclosure. However, the benefit of these changes is that your product is more resilient; you'll have a variant of that product that you can bring to market if your preferred connector is out of stock or becomes too expensive.
While bottlenecks across the supply chain have slowed the time from when demand increases to when an order is filled, extended lead times remain predictable. With blanket orders, engineers and purchasing managers can schedule multiple delivery dates over time to ensure consistent supply and lock in prices to avoid rising inflation. The supply chain crisis is expected to get worse, so anyone who doesn't work with suppliers ahead of time is likely to come home empty-handed.
In today's supply chain environment, the most important step a design team can take is to look at connector inventory early and design based on availability. If you need to find replacement or custom components, it's important to work with your supplier early to ensure you can maintain the desired production schedule. Investing a small amount of time early in the design process can save a lot of cost and stress before production, steps that ensure your go-to-market strategy doesn't get derailed.