Electronic Supply Chain industry research from the Z2Data Team

Product Lifecycle Management

PLM In a Volatile Global Semiconductor Marketplace
by
Z2Data
Published
May 18, 2022

Chip shortages in the past two years have been attributed to various COVID related factors such as shutdowns, labor shortages and increase in consumer demand. Although the pandemic has been a leading factor in recent chip shortages, in reality it has exposed existing vulnerabilities in the semiconductor supply chain.  

Industry globalization in the past two decades combined with increased threat of natural disasters as well as geopolitical unrest have led to industry volatility and the current chip shortages.  

A brief history ...

In the past two decades, innovation, consumer demand and business cost considerations created a shift in the electronic manufacturing industry. To streamline operations, meet market demand and increase profitability, OEMs, CMs, and component manufacturers turned to offshore manufacturing.  

As this trend continued and complexities increased in semiconductor manufacturing, suppliers in turn changed their business practices, merging and consolidating FAB. According to Tech Wire Asia, majority of manufacturing is done by two companies in East Asia – Taiwan’s TSMC and South Korea’s Samsung. According to Tech Wire Asia, these foundries manufacture as much as 70% of the world’s semiconductors.  

These practices led to manufacturing dependencies and global supply chain vulnerabilities prior to the pandemic. Some of these vulnerabilities became evident during natural disasters such as the 2011 tsunami in Japan or more recently the 2019 flooding in Japan and Thailand which not only took lives and caused devastation but they also disrupted many industries causing various supply chain disruptions.  

Geo-political threats such as the trade war between the U.S and China further exposed the vulnerabilities in the electronic supply chain and led to semiconductor shortages prior to the pandemic.  

The pandemic created further supply chain vulnerabilities and exasperated the semiconductor shortages. Deloitte reports that the chip shortages of the past two years alone have resulted in revenue misses of more than $500 billion worldwide between the semiconductor and its customer industries, with lost auto sales of more than $210 billion in 2021 alone.

How to mitigate ...

It is evident that taking a reactive approach to deal with market disruption has put significant strain on the stability and profitability of electronic manufacturing businesses.    

Building an agile approach for handling exiting disruptions and developing proactive product life cycle management strategies are not only critical but imperative in achieving business success and in maneuvering the ever-changing industry landscape.  

A robust approach to product lifecycle management will help drive operational efficiencies, shorten time-to-market, ensure compliancy, lower product costs, and increase revenue.   

Building strategies to navigate increased supply chain risks such as chip shortages, geo-political, and environmental volatilities are key to this process. Digitizing your supply chain and utilizing tools that help bring visibility to your supply chain risks, increases business agility and resiliency.

There are many tools in the industry that facilitate Product Lifecycle and Supply Chain Risk Management, but the challenge manufacturers face is having access to information that is relevant to their supply chain and operations.  

Sifting through magnitude of data and risk factors, then deciphering relevancy to their operations is time consuming and costly. Adding to the complexities is bridging internal and external data in one usable platform where multiple teams can collaborate and access the information they need.  

The Z2Data Solution

Z2data’s integrated platform provides a holistic solution for your engineering, procurement, compliance, and supply chain risk management.  

With Z2Data’s comprehensive component, supplier, and manufacturing site databanks, instantly access relevant part information, forecast lifecycle, find component alternatives, and accurately forecasts your component needs with our BOM and PLM analysis tools.  

Map, monitor and track your supply chain, receive real-time relevant risk alerts, have visibility to all your suppliers including the sub-tiers. Stay ahead of PCNs and last time buys, multi-source parts, meet compliance regulations, and stay in touch with market availability.  

Build resiliency and sustainability into your operational DNA by making rapid strategic decisions to manage and mitigate risk in a volatile global supply chain marketplace.  

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