The concept of alternative electronic components may be simple, but its implementation is not. Price is no longer the primary consideration. Availability has become a crucial factor. When drop-in replacements, functional alternatives, and custom equivalents are added to the mix, the complexity of sourcing alternative electronic components increases.
Types of Alternative Electronic Components
Alternatives can be divided into three groups drop-in replacement, functional alternatives, and functional equivalent alternatives. Custom parts are a fourth possible, but unlikely, type of alternative component.
1. Drop-in Replacements
For a given part number, multiple components are approved. Each component serves as an alternative to the other and is used interchangeably in production. These are pre-approved components that help maintain a resilient supply chain.
2. Functional Alternatives
These alternatives serve the same function as an approved component, but they cannot be used interchangeably. Before a functional alternative can be used, design engineers evaluate the component. Depending on the results, the part may replace the original component. The switch often requires a design change.
3. Functional Equivalent Alternatives
For functional alternatives that are equal to or better than the original in performance, it often becomes an either/or selection. Once the engineering team approves the alternative, a design change may be required. When the design changes, the original component may no longer meet the product’s requirements.
4. Custom Alternatives
Custom alternatives are incredibly expensive to produce. Most electronics manufacturers modify their purchasing patterns to compensate for a single delivery channel. Using multiple producers for custom components doubles the cost of component development.
Why Are Electronic Alternatives Needed?
Price control was the primary reason manufacturers looked for alternatives, but disruptions in the supply change have shifted the industry focus. Today, electronics manufacturers are looking for flexibility and resiliency as they search for alternatives.
Flexibility
Manufacturers look at electronic parts alternatives to ensure a steady flow of components. Unpredictable circumstances such as supply chain disruptions increase the need for more alternatives. Drop-in replacements make it possible for procurement to move quickly to ensure a continuous supply of a part or to switch to an approved alternative for price control.
Cost Management
Component costs may reach different price points. Being able to move from one alternative to another based on price keeps product costs low without disrupting supply. Using alternatives, even if it requires engineering approval, can help control costs over a product’s lifecycle.
Lifecycle Management
Suppose a component reaches its end of life. If only one component is approved, it may require a design change to find an equivalent replacement. That takes time. Without alternatives, sourcing teams may be forced to buy a year’s worth of supply at once to prevent a stop in production. A last-time buy can increase the overall cost of a product line.
Resiliency
Recent events have forced manufacturers to think about supply chain resiliency. Five years ago, sourcing would only focus on cost management. Availability was rarely a consideration. Now, the need for resiliency throughout the supply chain makes alternatives an essential part of component selection.
How Do Manufacturers Find Alternatives?
Companies source alternative electronic components based on specification sheets. Some use companies that specialize in alternative sourcing, but their process is solely based on provided specifications. They are not concerned with the environment in which the part must operate. Finding the best alternatives requires an understanding of how the part is being used. A component may have fifty parameters, but only a subset of these are critical. Knowing the critical attributes gives sourcing teams a place to start when looking at alternatives.
Look at Attributes
Components have critical attributes such as size, temperature range, and tolerance. When sourcing alternatives, manufacturers look at the subset of attributes, looking for equal or better specifications. The parts can be passed to the design engineer to decide if the alternatives can be classified as drop-in replacements. Depending on where in the design and development of a product, the alternatives could result in a change to take advantage of a functional equivalent alternative with a better supply chain capability.
Supply Chain
Sourcing alternatives also requires looking at strategic suppliers. Are their component manufacturers with alternatives that are already part of the supply chain? Which alternatives have a complimentary delivery channel that increases resiliency?
Finding alternatives means weighing technical attributes against strategic supplies for continuous delivery of components. Organizations that can bring those two elements together have the most leverage when it comes to establishing a resilient supply chain.
Design Library
Some organizations have component databases or libraries that engineering teams use. They have component engineering teams that are continuously looking for alternatives. Many times, these teams search distributor and manufacturer websites and compare capabilities. Their database cross-references these components so design engineers have an existing pool of component alternatives.
The libraries provide a technical resource for finding alternatives, but they still lack information on availability, supplier relationships, and supply chain capabilities. These factors all play a part in alternatives sourcing in today’s market.
Building a Pipeline of Alternative Electronic Components
Libraries are similar to supplier catalogs that list components available from approved suppliers. These libraries contain detailed information on the technical specifications but lack information on availability, lifecycle, and supplier relationships. Without more comprehensive information, design engineers evaluate alternative components purely on technical specifications.
Providing tools that support intelligent or smart part selection enables engineers to make choices based on more than technical attributes. If engineers have the information they can factor in the following when making selections:
- Availability
- Lead times
- Risk
- Lifecycle
- Suppliers
- Compliance
The goal should be to have engineers select the right parts at the right time at the right price. This process should be continuous so a pipeline of alternative electronic components is available to avoid redesigns. For highly regulated industries, this pipeline is especially critical as new components must go through approval processes that take time.
Part Analytics offers a sourcing and procurement solution to address the increased complexity of sourcing electronic components and alternatives. It is an end-to-end solution that uses automation and hyper-intelligent AI to streamline the procurement process. Through enterprise-wide access, the solution can speed design and development, enabling critical parties to gain access to information for better decision-making. It can help organizations improve their spend and reduce the traditional quotation process.
Part Analytics can help companies build a pipeline that delivers the right parts at the right time at the right price.
