Quarter 2 Market Conditions Update

We have all read and heard about the supply chain issues over the past few months. Now, the reality is setting in with shortages and allocations. These shortages did not start with the pandemic but have been coming for some time. And these shortages are not going to end any time soon. It will take billions of dollars of investment in infrastructure to expand production. The root cause changes with every article you read, the podcast you listen to, or the daily newscast. The concepts of legacy supply chain principles are no longer relevant. Lean inventory, Just-in-time Inventory Management, and Kanbans are becoming obsolete in many industries.

No matter the blame, we look forward to the future and produce solutions. Here at Burton Industries, we lose sleep over our customer’s success and future growth. We are pivoting quickly from legacy supply chain principles to resilient supply chain practices. Let us guide you through this strained time. We will keep you moving forward and put plans in place for future projects.

Attached is a summary of component lead times and pricing trends referenced from the “Futures Market Conditions Report” for Quarter 2- 2021.

-Discretes: Pricing and lead times increasing across the board.

-Surface Mount General Capacitors (ceramic):  Overall, pricing steady with lead times of 18-48 weeks

-Passives: Mix of increasing pricing and lead times with many moving into the red category.

               -Trimmers & Pots: increased pricing and lead times 10-12 weeks

-Electrolytic: Increasing lead times with a mix of increased pricing. Lead times 14-32 weeks

-Capacitors (film): Mix of stable pricing with stable lead times of 10-36 weeks

-Capacitors (tantalum): Mix of stable pricing with increased lead times  4-46 weeks

-Capacitors (polymer tantalum): Mix of stable pricing with mix of lead times 20-30 weeks

-Filters: Mix of stable pricing and increased lead times 20- 40 weeks

-Inductors: Mix of stable pricing and increased lead times 12-30 weeks

-Fixed Resistors: Increased pricing and increased lead times 30-52+ weeks

-Resistor Networks: Increased pricing and increased lead times 15-40 weeks

-Batteries:  Stable pricing and stable lead times 8-38 weeks

-Electromechanical:

-Switches: Mix of stable pricing with increased lead times 10-18 weeks

-Fans: Stable pricing with mix of increased lead times 12-24 weeks

-Connectivity:

               -Wi-Fi modules: Increase pricing and increased lead times 24-30 weeks

               -Bluetooth modules: Mix of stable pricing with increased lead times 16-30 weeks

High End:

               -Microchip: Lead time and pricing increases for MCU (8 bit & 32 bit), PHY/Ethernet, USB, and 32 bit MPU 30-55 weeks

               -NXP: Pricing increase for 8 bit MCU, Automotive, 32 bit MPU, and Network Processors. Increase in lead times for all above including 32 bit MCU. Automotive allocation and 26-52 weeks on the rest

               -Renesas: Stable lead times and pricing Automotive, increase of lead times and pricing on 8 bit MCU, increasing lead times with steady pricing for 32 bit MCU, and steady lead times and increased pricing for 32 bit MPU. Average lead times 30 weeks

               -ST: Increased pricing and lead times for 32 bit MCU and allocation for 8 bit MCU, 32 bit MCU, and Automotive.

Our supply chain team is reviewing contraints reports daily to ensure fast action as conditions change. When new contraints are identified, purchasing, program management and engineering review options for alternate suppliers and/or substitutes. Watch our blog for further updates on trends and the tools we are using to address availability issues and pricing increases.

Maximizing Employee Potential

Training Whitepaper

A key concept of Lean manufacturing philosophy is differentiating between value-added and non value-added activity. Within that category is the concept of necessary non value-added activity or activities that are necessary, but don’t add value to the products being built. Supervision is considered a necessary, non value-added activity. While management involvement in the production process has not disappeared at Burton Industries, its management team has questioned how much supervision is really necessary if employees are trained in the “why” behind their jobs and understand how they interrelate to the production process.

This philosophy has driven cross-training efforts that have created a more nimble, flexible workforce able to work in multiple production jobs as production demand dictates. This training focus has evolved over multiple years into a program known as Learn 2 Earn, that increases team members’ compensation as their skills proficiency increases. In some cases, team members are trained in skills applicable to multiple processes in individual work cells; in other cases they are trained to work as a cohesive team in a single work cell.

Read the full whitepaper here.

Creating a Culture Focused on Cost Reduction

Cost Reduction Whitepaper

There is no question that supply chain costs are increasing across the board in 2021. That said, electronics manufacturing services (EMS) providers who focus on working smarter can help balance out those increases. The team at Burton Industries has always had a culture focused on finding ways to reduce cost by working smarter. Its approach focuses on four areas:

  • Identifying cost improvement opportunities at project start
  • Periodic review of material costs during the project
  • Redesign for cost reduction
  • Operational improvements.

Read the full whitepaper here.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

here.

 

 

Navigating Materials Constraints

Materials Whitepaper

While 2020 will likely be remembered by all as the year of a far-reaching global pandemic, 2021 will be remembered by supply chain managers as the year of fluctuating constraints. The combination of reopening economies, technology shifts and COVID-19 short-term hot spots is creating challenges across the electronics manufacturing industry.

In this type of environment, a contract manufacturer’s internal resources for rapidly identifying and addressing constraints are critical. This whitepaper looks at Burton Industries’ formula for addressing the current challenges. There are three key areas that the team at Burton Industries focuses on:

  • New product risk mitigation
  • Early visibility into developing constraints and cost changes
  • Customer education.

Read the full whitepaper here.

Burton Industries’ Multi-Faceted Approach to Keeping Deliveries On Time

The Benefit of Keeping Deliveries On Time Burton Industries Multi_Faceted Approach1024_1

Supply chain disruption has become far too a common event in the electronics industry. Unanticipated spikes in high volume industry demand, merger & acquisition activity among component suppliers, COVID-19 shutdowns and logistics challenges have all created material constraints at one time or another. Even when the industry is running on an even keel, long-lifecycle products can see obsolescence-related issues create availability problems.

Burton Industries’ team utilizes a range of stocking programs plus purchasing and engineering expertise to address these challenges. This whitepaper looks at Burton Industries’ multi-faceted approach to addressing these challenges. Read the full paper here.

Cutting Time in Product Development

Cutting Time in Product Development_ Four

Nowhere is the phrase “time is money” more accurate than in product development. A slow product development cycle can increase engineering costs, material costs and marketing costs. When design and manufacturing are outsourced, some original equipment manufacturers (OEMs) see design and manufacturing as distinctly different areas. The reality is that close collaboration among the customer’s design team and contract manufacturer can reduce time and minimize the potential for costly errors.

Design teams focus on product form, fit and function. However, that focus is often on the customer’s requirements for form, fit and function, rather than best manufacturing choices for delivering the desired form, fit and function. The result is often a more costly manufacturing process or a need for an additional design spin to eliminate constraints or quality issues that aren’t identified until the qualification production run. Read our full whitepaper here.

Stocking Arrangements to Mitigate Supply Chain Disruption

Common Stocking Arrangements to Minimize Supply Chain Disruption_Page_1Material constraints continue to add challenges to electronics manufacturing. That said, the team at Burton Industries has implemented stocking arrangements with many of our customers designed to ensure that product will be available even when spikes in end market demand or further changes in material availability impact forecast assumptions. Our latest whitepaper, Common Stocking Arrangements to Mitigate Supply Chain Disruption, looks at the types of stocking programs available and their benefits and potential challenges. Read the full paper here.

Are Legacy PCBAs Costing Your Company Money?

PTH or SMT _ Are Legacy PCBAs costing your team money_Page_1While many consumer-focused electronic products have lifecycles of only six months, products that are highly regulated or utilized in industrial applications with limited need for frequent revision may have long lifecycles. So long, in fact, that they may still incorporate component technology that is several decades old.

Burton Industries’ latest whitepaper looks at ways that Burton’s team can assist with legacy PCBA redesign efforts. Read the full whitepaper here.