The horizontal report provides a supply vs. demand “map” showing where shortages will hit.

At its foundation, Lean manufacturing philosophy is designed to eliminate waste and the associated chaos that inefficiency creates. Many of the core elements that improve factory efficiency, such as visible flow of work-in-process, small lot sizes, a strong focus on minimizing variation and poka-yokes to eliminate defect opportunities, have parallels that can increase efficiency in support organization tasks.

One of the most challenging tasks in the electronics manufacturing services (EMS) world is program management. This normally complex job has been made even more difficult by electronic component shortages that have been endemic since January 2021. As experts are predicting that component supply/demand imbalances are likely to continue through 2023, finding ways to eliminate inefficiency and waste is as important in program management as it is in production.

Just as design for excellence (DfX) contributes to elimination of defect opportunities in production, a program manager’s ability to evaluate shortage risk and work with each customer to put a 24-month forecast in place can help to minimize shortage opportunities. This isn’t always easy. Just as customers often need to be carefully educated on the rationale behind DfX recommendations in order to agree to the recommended change, they also have to be educated to realties of today’s material situation. The current environment is different from prior material shortages because it is widespread across commodities and severe enough that suppliers are behaving in unexpected ways. Late decommits on day of shipment is one example of this type of behavior, and it drives a need for the program manager to create a process that enables consistency and follow-up on material status for all parts on the customers’ bills of materials (BoMs) rather than just identified program parts.

One tool used at SigmaTron International to address this issue is the horizontal report. This provides each customer with a supply vs. demand “map” that shows where shortages will hit. More visual than an MRP record, it is organized in time buckets over a 12-month timeframe and shows the customer where the parts are used, how many parts are allocated to each assembly and the open order report. On most projects, MRP is run once a week and a refreshed horizontal report is provided to each customer. This frequency may increase if there are issues associated with the assembly that need to be watched more closely.

As with Lean manufacturing tools in production, the horizontal report is only effective if the team uses the visibility it provides to proactively manage the shortages it predicts. That is normally done in one of two ways. First, it is a great tool for customers to use in discussions with suppliers increasing their allocation to avoid the shortage the report is predicting. Second, the report’s 12-month timeframe provides enough warning for customers to consider alternates or redesign activity on parts that will likely be constrained for the long term.

The report also educates customers on the realities of the market, helping them understand the tradeoffs they may face when increasing forecasted demand, making design changes or introducing new products. It helps drive visibility into on-hand inventory and its associated liabilities. Just as a well-trained production operator helps build quality in, a customer who understands the realities of the market and the shortage risks in their program can help address potential shortages before they become issues.

A report alone isn’t a complete solution. Program managers see daily status changes. The quality of the way they communicate those changes and the options they provide determine how quickly and efficiently those changes are resolved. Tackling issues in small lots also makes the problem resolution process less overwhelming in the current chaotic environment. Some good processes to put in place include:

Daily status reporting to give customers better visibility into why requests they may not otherwise understand well are being made by the program manager.
Providing customers with a list of all options, including ones that are more expensive, as soon as it becomes evident tradeoffs must be made.
Continually sharing all inputs, such as trends purchasing may be seeing that indicate a shortage may be likely, even if a supplier hasn’t notified them yet.
Establishing collaborative, empathic relationships with customers that share the full extent of bad news immediately so that recovery options can be explored.

Just as a visible factory tells production team members which processes are working efficiently and which need corrective action, a robust communication process keeps the team focused on the most efficient options for problem resolution.

Well-defined processes help production run smoothly.  Well-defined escalation processes help both the EMS program team and the customer’s team address challenges efficiently, typically before they cause issues in production. Predetermining when escalation at the component manufacturer moves from the EMS team to the customer’s team can help address issues faster.

Finally, it is important to find ways to destress the stressful situations materials shortages create. We’ve gone from a situation that predicted a bumpy road, to entreaties to hang on, and now daily announcements that a critical part is on allocation. Everyone is overworked and tired and the situation will likely remain stressful for the foreseeable future. While it is important to share the full extent of bad news quickly and empathize with the challenges that creates, it is also important to build resilient relationships with customers that involve more than just bad news delivery. Look for positive news to share and successes to celebrate. From a stress management perspective, make sure team members are finding ways to unplug outside of work. Whether it is good times with friends, sports, a pet or a hobby, maintaining work/life balance is important in times of stress. We may not be able to control the current material environment, but we can control the way we respond to the challenges it creates. •

Aida Hinojosa is program manager director at SigmaTron International’s (sigmatronintl.com) Tijuana, Mexico facility; aida.hinojosa@sigmatronintl.com.

PCB West: The leading technical conference and exhibition for electronics engineers. Coming Oct. 4-7 to the Santa Clara (CA) Convention Center. pcbwest.com

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