What does security of supply mean? The term was originally used by the military to describe the methods of securing supply of items critical to military need (click here for more on military usage). For non-military procurement, it means "designing a supply chain with a high probability of delivering what you need, when you need it" (Lytica.com).How can you be sure that your supply chain is secure and that your normal production won’t grind to a halt and hurt your business? That can be addressed by supply chain security.
Security of supply in electronics is the sum of processes put in place to ensure consistent supply of conforming material. It covers understanding who your manufacturers are and ensuring that they live up to your relevant standards. Do you have the appropriate security measures in place to protect against supply chain disruption? Here are some suggestions.
Security of Supply: Company Level
To ensure continuous supply you need to start with stable suppliers. Among the company level factors you should consider are:
Financial strength- This can be gauged informally by years in operation and scale. However, neither are guarantees against eventual business failure. Watch for trends in headcount or building space. If reducing headcount or closing facilities, time to dig deeper. Ask for financials.
Certifications- This includes the standard ISO certifications and any industry specific certifications. Also look for workmanship level certifications and training such as IPC workmanship standards. Another important consideration, especially for mid-sized OEM's, is qualification by leading OEM's like Apple and Cisco.
Performance- At a minimum you should be measuring the on time delivery and quality acceptance performance of your suppliers.
Security of Supply: Component Level
Notices- Monitor product change and end of life notices. Distributors commonly provide this service, or for additional security subscribe to a BOM monitoring service from companies like SiliconExpert. However, very few OEM's actually react to PCN or ECN notices, so be one of the exceptions and take action!
Multi Source- While not always available, it is always best practice. Note that maintaining more than one qualified supplier on your AVL does not imply dividing your spend. In many cases, buying 100% of your demand from one of three qualified sources is best practice.
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