Interview
'The rapid pace of consumer electronics development is forcing car makers to shrink their model lifecycles. Otherwise, as Smit says, “when you get into a five-year- old car you can immediately feel that it is old”.'
Building the right supply chain
A robust supply chain that can cope with all these issues doesn’t just happen. Avnet has a 25-strong team that is dedicated to designing them, and since minimising risk is the most important task in automotive engineering, it also monitors the resultant supply chains continuously to ensure they keep providing what their customers need.
Avnet’s role in the supply chain is to make life simpler and more predictable for both the component manufacturers and the Tier One automotive customers. For example, if a component manufacturer wants to deliver once a month, but a Tier One automotive customer wants to draw off stock on a weekly or even just-in-time basis, Avnet can buffer that mismatch.
Component manufacturers get other help from Avnet, such as centralised demand planning, based on deep insights into customers’ production facilities worldwide, and bespoke reporting at a global, multisite level for inventory, forecasts and defined KPIs. Avnet can also manage deliveries centrally, decoupling component manufacturers from the complexities of the global supply chains of Tier One automotive customers, and can even re-label components to meet the custom requirements of individual Tier One automotive customers.
“We play on a horizontal level to help ensure some consistency in the supply chain,” says Smit. “A lot of this is enabled by the existence of standards, either global or national standards ratified by an independent body, or standards set by an individual manufacturer.”
To ensure a solid basis from which to try and ensure global consistency of the components that it sources for its Tier One automotive customers, Avnet has teams that are dedicated to understanding both international open standards and manufacturer- specific standards, working across 12 time zones and with 250 production facilities.
Risk mitigation also drives a focus on good component traceability, with both date-code labels and lot numbers on incoming supplies. While this may seem excessive for suppliers of simple passives, Smit points out that more sophisticated components such as memories and microcontrollers are likely to go through multiple revisions, including die shrinks, during their production lifetime. Knowing exactly which version of a chip has been used in a subsystem or module may one day be critical to customer safety.
Transparency and insight
A distributor such as Avnet obviously works in commercial confidence with both its component- manufacturer partners and its Tier One automotive customers, but nonetheless can find itself acting as a crossroads for rich information flows about what is going on in the car industry.
Non-Disclosure Agreements (NDAs) usually limit information sharing, but three-way NDAs can help improve transparency between willing partners. And then there’s the tacit knowledge that the Avnet account teams build up through their experience of serving the automotive industry.
“At the end of the day, we're trying to help the component manufacturer and the Tier One automotive customer to understand each other's capabilities and needs,” says Smit.
Often the Tier One automotive customers are looking for a strategic supply chain partner enhancing the transparency between themselves and their EMS/ODM partners. All these processes are conducted though the highest compliance standards subject to but not limited to confidentiality.
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