The electronics value chain is ripe for a digital transformation, given the persistent chasms that stifle innovation and product development execution.
For the past several months, supply chain issues have headlined the news, identifying a worldwide vulnerability that was magnified by the global pandemic. Dimensional Research, in their 2020 State of Electronics Sourcing Survey, stated that 81% of their respondents reported that commodity availability has forced expensive spot buys, while 91% claimed that sourcing issues are causing delays in product launches. More recently, Goldman Sachs forecast an average 20% shortfall in computer chips, which is expected to last through 2022.
Supply chain instability is further compounded by other factors amplified by the pandemic: the rise of counterfeit parts impacting trust in the component supply chain, differing geo-political interests resulting from globalization, labor disruptions seen across all industries, and increasing demands to design for environmental sustainability.
All this volatility highlights the dependency electronic systems companies have on the other members of the ecosystem they rely on to bring a successful product to market. These include component suppliers, product engineers, and product manufacturers. The reality is, before the pandemic, although we understood the value of integrating this ecosystem, recent events have clearly demonstrated its fragility and the critical need to bridge the chasms that result in lost innovation, budget hits, and time-to-market delays.
Figure 1 This is how today’s electronics value chain looks like. Source: Siemens Digital Industries Software
Traditionally, within EDA, the focus has been on core system design tool flows to address product, process, and organizational complexity. The goal? Delivering best-in-class solutions for product development to engineering organizations.
There have been tangible efforts to connect these electronic system design flows with the other stakeholders’ environments, but typically, this has been executed through “soft-integrations”, either via data transfer formats or aggregation services. Although advances have been made, chasms remain between separate product engineering teams and their partners in component supply and electronics manufacturing. Systems companies have been effective in compensating for these shortcomings by employing inventive methodologies and new roles, but against the ever-increasing product complexity demands on engineering teams and the historical global disruptions we are now seeing, these efforts are no longer sufficient.
Digital transformation is required, now
The industry’s response to the pandemic demonstrated the power of digital transformation. Faced with unprecedented uncertainty in early 2020, we all found a way to collaborate remotely, to continue developing products, to support customers, and to remain productive. In other words, in a relatively short time span, we all experienced a broad digital transformation. This transformation was empowered by cloud platforms and SaaS consumption models that demonstrated to the wider industry that a new way of working is not only possible, but it’s also effective.
With “time” and “cost” still the #1 pressures facing companies, digital transformation can be more than just effective; it can be game-changing for an industry facing headwinds of ever-increasing complexity. By bridging the chasms within the electronics value chain with digital solutions that promote innovation and first-time success, system design companies will capture and defend the high ground necessary to fuel top-line revenues while achieving operational excellence.
Figure 2 This is how digitally transformed electronics value chain looks like. Source: Siemens Digital Industries Software
What does bridging the electronics value chain mean?
If the goal is to consistently deliver successful products to market that meet aggressive time-to-market schedules, budgets, and requirements, then bridging the value chain requires a holistic view that encompasses everything from component research and exploration through handoff to manufacturing. Each step needs to optimally connect the engineer’s desktop to the electronics value chain. Think of an integrated solution where…
Imagine this functionality that fosters greater strategic decision capacity and innovation potential being available at the fingertips of product development teams. Imagine the dependencies along the design process being shortened. Imagine greatly reducing the risks to successful product delivery caused by time delays and human error that accumulate during the new product introduction (NPI) process. Imagine a fully aligned organization that can better manage, adapt, and thrive when faced with supply chain disruptions throughout a product’s lifecycle. This is possible with an integrated solution that builds upon existing EDA tools and infrastructures with cloud-native capabilities that directly connect system design companies with the electronics value chain.
Figure 3 EDA tools and cloud-native capabilities can better align electronic designs with larger value chain. Source: Siemens Digital Industries Software
The electronics value chain is ripe for a digital transformation, given the persistent chasms that stifle innovation and product development execution. If the uncertainty of the pandemic demonstrated how companies employ digital transformation to move forward and excel, it’s a relevant proof point to what’s possible and how new operational paradigms can be adopted quickly.
Companies can optimize not only their systems design process but also every link to the stakeholders in the global electronics value chain. And by uniting this value chain with the engineer’s desktop, system design companies will see higher levels of digital transformation, resulting in greater profitability as they are empowered to realize tomorrow’s designs today.
This article was originally published on EDN.
AJ Incorvaia is senior VP for electronic board systems at Siemens Digital Industries Software.