Navigating Unpredictability: Avoiding Cost Spikes With Component Supply Chain Visibility

Driven by supply chain disruptions, market dynamics, geopolitical events, and a global component shortage that continues to impact PCBA development across industries, the ever-shifting landscape of component costs has challenged designers to adopt ingenious strategies.

In response, component visibility has emerged as a powerful strategy that equips designers with the tools to predict, manage, and ultimately thwart cost spikes.

With critical data, broader market knowledge, and the ability to find and compare alternative component options, designers can weave creativity into their designs while carefully balancing cost and functionality considerations and safeguarding the lifespan of their costly PCB designs—below, we share how.

Battling Cost Spikes with Component Visibility

Component visibility involves keeping a tab on component costs, their availability, potential alternatives, and possible replacements.

With this in mind, both Octopart and Altium (Octopart’s parent company) offer a range of tools that facilitate enhanced component visibility.

Enabled by direct integration with component suppliers' databases, Octopart provides up-to-date information on pricing, availability, lead times, and other critical parameters. This real-time data ensures that engineers make informed decisions while selecting components, reducing the risk of being blindsided by sudden cost spikes.

Design for Cost (DfC)

Incorporating cost considerations into the design phase is a fundamental practice in battling cost spikes. Octopart’s component visibility features empower engineers to assess the cost implications of component selections in real-time. Designers can make informed decisions without compromising quality by simulating different component combinations and evaluating their impact on overall costs.

Component visibility helps identify existing alternatives and supports exploring new components with stable costs and availability.

Engineers can use Octopart’s tools to search for components with similar specifications, ensuring that design performance remains uncompromised even when switching to more cost-effective alternatives.

When a preferred component faces issues or price fluctuations, Octopart.com will suggest alternative options.

Understand Pricing Trends

Understanding broader price trends as they relate to the availability of electronic components and the broader semiconductor business cycle can help you save time and money. However, deciphering median prices and getting an overall sense of the price point of a part can be complicated due to a wide range of distributors offering the same part at different price breaks.

As Octopart manages information on over 40 million electronic parts, this gives us the power to aggregate part prices across authorized and unauthorized distributors, which helps you see the big picture and make more budget-conscious decisions when buying parts.

Click here to see how Octopart identified some major price trends across the most common component categories.

Mitigate Risk with Supply Chain Insights

Component shortages and sudden cost increases can threaten project timelines and budgets. With Octopart’s real-time supply chain insights, engineers can identify and proactively address potential bottlenecks. This might involve using components with more stable supply chains or designing for flexibility, allowing for easier substitution of components if necessary.

By harnessing Altium's supply chain insights, designers gain the ability to foresee potential disruptions and shortages. This proactive approach empowers teams to explore alternative components before cost spikes occur, allowing them to make informed choices without compromising design performance.

For example, the Electronic Design to Delivery Index (EDDI), a free monthly report, contains category- and subcategory-level insights into industry supply and demand over the past year. The EDDI will help you identify risk across your designs and BOMs, purchase more strategically to avoid cost escalation, and identify when to seek alternate parts.

Component Lifecycle Status

At the heart of component visibility lies the ability to track and monitor the lifecycles of individual components throughout the design process.

As you likely know, all components have a finite product lifecycle and will eventually become obsolete for many reasons. The introduction of a more advanced or even a copycat part, for example, could signal the eventual obsolescence of its predecessor. This transition could take anywhere from a few years to decades, depending on the speed of development and application demands.

Other components are so universal that we take it for granted that they won’t go obsolete, only to find out we’re wrong.

Another reason parts may reach their End-of-Life (EOL) is dwindling demand. When a target market is faltering, to save on costs, components may be taken out of production, leading to more End-of-Life (EOL) notices being issued.

By considering lifecycle information during the design phase, you can better optimize the lifespan of your product and its components.

For a quick reference, the four lifecycle stages, their designations, and what they mean:

Lifecycle Management

Effective component visibility extends beyond the design phase. Octopart equips designers with tools to monitor component lifecycle status, identify end-of-life (EOL) situations, and plan for seamless transitions to alternative replacement components.

A proactive stance on lifecycle management not only shields designs from unexpected cost hikes but also extends the lifespan of the product.

The lifecycle management capabilities provided by Altium ensure that designs remain viable and cost-effective throughout their lifespan. By identifying potential EOL components early on, design teams can transition smoothly to replacements, avoiding the last-minute rush that often leads to inflated costs.

Designing the Future: A Case Study

Imagine a design team developing an advanced Internet of Things (IoT) device. The team requires an array of components with specific characteristics that cater to performance, power consumption, and cost considerations.

Using Octopart, the team gains access to comprehensive datasheets, specifications, and parametric information for more than 40 million electronic parts. This empowers them to make design choices that align with their project goals without embarking on extensive manual research. With real-time pricing data from various distributors, they can explore cost-effective alternatives without compromising quality.

The team is alerted to components' availability and lifecycle status as the project advances. This ensures that their chosen components remain viable throughout the product's lifecycle, mitigating the risk of costly redesigns due to component obsolescence.

Throughout the process, collaboration among team members is facilitated within Octopart's interface, enabling seamless communication and alignment of efforts. Ultimately, the IoT device is designed with precision and sourced efficiently, meeting budget constraints and sustainability targets.

The Octopart Advantage: Driving Efficiency with Data

Effective decision-making lies in having access to the right information at the right time.

Octopart's dedication to comprehensive data accessibility fosters an environment of efficiency and transparency. With data aggregated from component manufacturers and distributors, Octopart offers a centralized hub for information that would otherwise require long hours of extensive research and cross-referencing.

Octopart’s user-centric interface ensures that users can navigate the platform effortlessly, regardless of their technical expertise. This accessibility is instrumental in reducing friction and enhancing the overall user experience. With easy access to real-time pricing, availability, and lifecycle data, designers can make informed decisions swiftly, eliminating bottlenecks in the development process and evading cost spikes before they impact profits.

As technology advances and products become more complex, the need for a comprehensive information hub like Octopart becomes not just a convenience but an indispensable tool for those who aspire to design, source, and sustain products with excellence and at the best possible cost. Altium's commitment to empowering engineers with tools for efficient design and cost management is in step with the industry trend toward smarter, more agile design practices that build resilience.