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Alternate Source

If possible, Item Master parts should have multiple sources. By sources I mean manufacturers and suppliers. The danger is obvious. If one manufacturer temporarily cannot ship product for any reason, including natural disasters, over-allocation, scarcity or depletion of raw materials, business failure, work-stoppage, or process problems, then the problem is passed on to the end user in the form of unavailable inventory. It only takes one missing part to prevent the production of a finished goods product. For this reason, the Components Engineer should be constantly monitoring the Item Master for parts with only one manufacturer’s part number listed. When a sole sourced part is submitted for addition to the Item Master, the Design Engineer should be informed immediately and strongly prompted to try to find and use a part with a second or alternate source.

By definition, a sole source part implies that there is only one person or company that can provide the part, effectively disallowing for competitive bids on the same product while opening the door to part cost escalation as the provider knows that your company has no option but to buy from their company.

Another term often confused with Sole Source is “Single Source”. This does not necessarily mean that the part or equivalent  is not available from many suppliers, but it may apply to contract stipulations formulated around an agreement to buy all of the parts needed from the same supplier. This may be a way of obtaining preferential pricing and may be contingent upon a guarantee of a set  purchase volume over a given period of time. Another condition is that the supplier might agree to hold reserve inventory at their costs in order to certify the part will be available for immediate delivery.

All sole source parts cannot be eliminated from the Item Master as many designs using cutting edge technology depend on uniquely featured components. These components are selected by the Design Engineer because they do a much better job at hopefully lower cost than their technology predecessors. In this event, a risk analysis study should be performed to determine if the company should invest in a one-time “risk buy” in order to guarantee part availability in case of a supplier’s inability to deliver due to some unforeseen production disruption. The Risk buy meetings usually involve Purchasing and Finance. The larger the risk buy quantity, the more the company’s cash flow is impacted.

The Components Engineering Request Form, CER/AVL Change Procedure, and the Part Qualification Procedure are available for download on these pages. These downloads can be referenced for particular steps on how to proceed with an alternate part search and subsequent qualification. The request for an alternate may be internally generated by the CE department, or any other department impacted by the loss of the sole source of supply. When the latter has happened, it is usually already a crisis situation and the CE needs to respond very quickly. A line down crisis is often the result of a critical component missing.

When searching for an alternate part, there are some basic procedures to consider and some creative methods that may resolve a factory crisis quickly.  Items 1-8 below should help in case of an emergency.

  1. First before you begin the alternate source hunt, confirm the part is a sole source by double checking the Item Master AVL. It sounds like a redundant effort, but many times human error is involved, particularly in panic situations when people simply make mistakes.
  2. Find a datasheet or specification and if possible sit down with the Design Engineer to determine which part characteristics are critical and which are not so critical. More than once, I have had engineers tell me the part is really not that necessary in the circuit and it can be bypassed or removed. Many times I have been able to resolve line down situations by agreeing with the engineer that the tolerance specification need not be as tight as was first specified, or a part with a higher voltage handling capacity can be used.  In doing so, I have sourced alternative parts that are at less cost and more readily available.
  3. Explore alternative resources including third party component brokers or overseas suppliers. I have called other companies that might use the same part and asked for an emergency supply from their inventory. Don’t overlook the Manufacturer’s rep. He may have the parts in his desk. It happens!
  4. It may be possible to cannibalize from other products to find the same parts until the newly sourced parts can be identified and delivered.
  5. In some cases, it is possible to change another component in the circuit in order to specify an alternate part that is complimentary with the end result of the new paired combination producing the same overall circuit results.
  6. The board or circuit layout may be able to handle multiple package variations. Perhaps a capacitor at 50V can be replaced with a 63V part if the new, sometimes larger diameter part does not interfere with the surrounding components.
  7. Sometimes the parts have been pulled for other kits that are not so critical. The “on hand” inventory is showing “No stock” and the parts bin may be empty, but staged for production is a kit with more than enough parts to keep the line going. Be sure to check all Work-In-Process, (WIP). If the kit is being driven by a sales order, the parts may not be released for the production order in crisis. This possibility should be brought to the Materials Planner’s attention. The Planner will check the criticality of the Sales Order requirement schedule. Perhaps the customer order is due for shipment long after the critical parts will be available again.
  8. Double check with Purchasing to see if there are any open orders that can be expedited.

If items 1-8 do not provide the resolution needed, then the Components Engineer must initiate an alternate part search as quickly as possible. The original datasheets edited with the Design Engineer’s concessions, will help broaden the possibilities for suitable replacement parts. Remember to initiate the CER Form and work closely with Purchasing and the Materials people, keeping them up-to-date with your research on a daily basis. If you don’t keep them in the loop on a daily basis, they will find you several times a day.

If you are performing an alternate part study based upon your own proactive review of the Item Master, you may approach this effort in a non-harried fashion and select several alternates and by doing so, reduce the likelihood of another factory line down incident due to unavailable parts.

Two more things to consider. First, as soon as possible, identify “families” of parts within each major part type. For instance. Surface Mount Resistors have literally thousands of values but they are all made with the same process by a particular manufacturer. A 4.7K and a 5.1K may not be substitutes for one another, but by qualifying a second manufacturer’s resistor manufacturing process, then the same values from both manufacturers can be substituted for each other without an extensive qualification process. In particular, the company has been using a 4.7K resistor from one manufacturer and now the designer wants to add a 5.1K not yet on the Item Master. It is a simple matter of adding the 5.1K to the Approved Vendor List (AVL) because the entire family has been prequalified. In the same manner, if multiple resistor manufacturing companies and their respective manufacturing processes have been qualified, then any part from all the companies could be used. Examine your Item Master to see what Manufacturing processes can be identified as common between multiple manufacturers. You will fill in much of your alternate source database quickly. Think about pin headers, d-sub connectors, MLC capacitors, etc. Head off the emergency and reduce your daily stress significantly thereby.

Finally, give serious thought to creating a Preferred Parts List, (PPL). If the Design Engineers are held to selecting as many parts as possible from this list, then you, The Components Engineer, will spend less time and effort qualifying new parts. Because the PPL consists of  parts selected for cost, availability, proven performance history, and long-term reliability, the end product will have the best chance of maintaining or exceeding the quality standard set by the existing company products.

This is an example of a specification review for an alternate part search. In this case, I captured and inserted two part specifications, the original and prospective alternate, on the same sheet for easier comparison. This is not really necessary as it is now very easy to view to full size PDFs side-by-side on a 20” screen. Also note, I used the PDF comment feature to leave notes for the Design Engineer to consider. The notes become visible when the mouse pointer is hovered over the comment. I chose this example so you, the visitor could track the specifications I was reviewing and see why I concluded this alternate was a good candidate to submit to the Design Engineer for final sign-off and approval. The Adobe Acrobat functionality for comment and editing has increased over the years and back in 2003, this was a very effective tool. If you haven’t already explored Acrobat’s advanced feature set, it will be well worth your while to take the time to do so. For additional Software Tools I use every day, please refer to the section “Tools Software” under the “Core Disciplines” drop down menu on this website.

Download alternate-search-ce-review-notes.pdf

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