How to protect your inductive component supply chain to ensure local issues don’t affect production
When sourcing inductive components, or just soft magnetic cores, customers need their supply chain to be reliable and cost-efficient. Supply chain issues can have a huge impact on the success or failure of an end product.
Some of the issues and risks to be aware of in your inductive component supply chain are:
Supply chain complexity
The supply chain for inductive components is complex and different depending on the material. For example, Ferrite and Alloy Powder cores have a simpler supply chain with a wider range of supplier and the pre-material is more commonly produced by the core manufacturer, while for Nanocrystalline and Amorphous cores there are only a few suppliers and sourcing high-quality pre-materials is more complex. When producing an inductive component there can be over 4 steps. This starts with sourcing the raw material, powdered metals such as Iron and Nickel. The raw materials are then processed into the pre-materials of cores, ie powders and ribbon. The magnetic core is then manufactured using the relevant pre-material. The magnetic core, metal windings, bobbins and other elements are then combined to make an inductive component to meet application-specific needs.
Delivery requirements will drive transportation costs and choices
Increases in cost can come from a variety of places in the supply chains from raw material through to export and delivery costs. These fluctuations can be due to increased demand/ limited supply issues, for example, Copper Nickel and Aluminium prices are driven by high global demand. If time is limited then costs will increase because sea freight will take weeks, while air freight is quick but adds cost. Precise product management is required through every step of the supply chain to make sure that additional costs are not added, because the total price of an end product can have a huge impact on its success or failure.
To protect the end-user, products must meet any relevant quality control and certification requirements for the end application, in both the exporting and importing country. A component designer/manufacturer will send a pre-production sample of their end product for approval. However, if an inductive component is approved for only a specific list of materials (BOM) then the manufacturer cannot replace this with a similar alternative. This could potentially impact or stop production if the approved material/component is not available.
The uncertainty generated from Brexit, the US-China trade war and the Japan-South Korea trade war are some examples of where trade issues have already and will continue to affect global supply chains. Trade issues can cause anything from a few additional tariffs or a hard block which can make some suppliers an unacceptable choice, even if they have stock. Having a clear understanding of your options is key to navigating these complex steps.
How we can help you stay ahead of any supply chain issues:
Geographical manufacture choice
Acal BFi offers both a comprehensive selection of partners and direct access to our sister companies manufacturing facilities in over 23 countries across the globe. Combining this with our in-depth knowledge and specialist export management team we can offer customers a geographical choice of where their products are manufactured. We can enable customers to choose factories which are closer to their location so they can visit or we can highlight facilities in a wider range of locations to spread the risk from environmental catastrophes, local political problems, or the impact disease can have on the supply chain.
For high volume projects, our team can help during the design phase of a project to offer duel source. We can organise products from two or more supply chains to be approved in advance of full production. We can source products from different raw-/pre-material suppliers and production sites making sure they are as independent as possible. Duel sourcing takes additional time and cost in the start-up phase of a project, so the earlier in the project this is considered, the lower the impact on overall costs.
Safety and consignment stocks
Acal BFi can also provide safety or consignment stocks of finished goods, critical materials or components. We will put in place the appropriate contracts to support customers with stock, this is usually held on account until the customer calls it off. This flexible approach to stock management can also help to reduce costs by producing bigger lots and reducing transport costs. Stock can be stored in either of our European warehouses to suit the needs of our customers in either our UK or Germany warehouses, the manufacturer's warehouse or the customers own warehouse.
Contact us to learn more
If you are interested in understanding how we can help you protect your supply chain then please contact your local Acal BFi team who will be more than happy to answer your questions. As you can see, early advice is crucial to helping you make the right informed choices.
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