BOM Intelligence: solving the challenges of the electronic component supply chain The problem The solution Procurement experts, compliance managers, and component engineers are facing a perfect storm of challenges with the electronic component supply chain. Compliance requirements are becoming more strict, counterfeit parts are pervading the market, consolidation among parts manufacturers and technological innovations are increasing the risk of availability and contributing to obsolescence, and parts lifecycles are becoming shorter. The BOM Intelligence platform helps compliance managers and engineers solve the myriad challenges inherent in the electronic component supply chain. BOM Intelligence provides insights that enable companies to increase the pace of new product introductions, avoid costly production interruptions, and improve sustainability over extended service lives.
Parts marketplace risks Risks in the electronic components supply chain Risks in the electronic component supply chain have grown substantially over the past five years as procurement and regulatory pressures have grown. Companies and component managers must deal with component obsolescence and manage regulatory compliance guidelines such as RoHS (Restriction of Hazardous Substances) and REACH (Registration, Evaluation, Authorisation, and Restriction of Chemicals). It s also critical for companies and component managers to follow guidelines related to conflict minerals and country-specific export regulations. Supply chain distributions have become more acute and difficult to manage over the past several years as well. Component supply chain challenges are becoming more prevalent due to shrinking lifecycles and increased merger and acquisition activity among suppliers. New chip technologies such as more SOC (system on chip) devices with embedded functionality and communication capability have added hacking risks in addition to the traditional risks of procuring counterfeit or substandard components.
Parts marketplace risks COMPONENT OBSOLESCENCE Technological advancements and poor component management can lead to part obsolescence and shorter product lifecycles. The average electronic component lifecycle is now less than 10 years. IHS Markit issues 15 EOL (end-of-life) notices and 38 semiconductor PCNs (product change notifications) per day, on average. COUNTERFEIT PARTS Counterfeit parts result in $75 billion in annual lost revenues for the semiconductor industry. If component managers are unprepared for regulatory pressures or product obsolescence, they may have to scramble for replacement parts that are non-compliant or counterfeit. End-of-life, Not Recommended for New Design, and Discontinued parts make up more than 70% of counterfeit reports. NON-COMPLIANT COMPONENTS Regulatory pressures are significant. Component managers must comply with laws such as REACH and RoHS, follow global export regulations, and avoid using conflict minerals. REACH is the most complex piece of law in EU history, and it s also the strictest code on regulating chemical substances. Many countries have adopted their own version of RoHS or REACH, and procurement professionals are challenged with understanding country-specific compliance legislation. SUSTAINABILITY CONCERNS Responsible supply chain management helps improve both the bottom line and the environment. As more corporations strive to set positive examples in the community and show greater environmental responsibility, expectations for sustainable products have increased. Manufacturers, particularly those in Europe, are under greater pressure to produce recyclable components.
Risks in the electronic components supply chain Parts marketplace risks Poor risk management IHS Markit BOM Intelligence The costs of poor risk management SUPPLY CHAIN BREAKDOWN Whether from increasing regulatory pressures, non-compliant parts, or consolidation among manufacturers, finding the specific part you need has become more difficult than ever. If not properly managed, a single core component can disrupt the entire product supply chain. COSTLY PRODUCT REPLACEMENTS Components are increasingly complex yet have shorter lifecycles. It is essential that component parts have a lifecycle consistent with the product s production lifecycle in order to avoid costly redesigns and shipping delays. A product delay of even a few months can cost market share, disrupt product revenue goals, and render a product vulnerable to the competition. Continued Find out more
Poor risk management SAFETY AND SECURITY CONCERNS Understanding the full materials disclosure and the chemical composition of each design component ensures compliance with new or updated regulations, while also decreasing safety and security risks for the consumer and supply chain partners. Data security is often rooted in component security, and proper vetting of the full BOM (bill of materials) is essential. If parts are non-compliant with RoHS or REACH regulations, company employees or consumers may come into contact with harmful substances. BRAND DAMAGE Brand perception is critical. Consumers and supply chain partners are increasingly aware of a company s community outreach, environmental responsibility, and ethical business practices. If component managers use non-compliant or counterfeit parts or face part obsolescence, tremendous product repair or replacement costs can be incurred and brand equity can be irreparably damaged.
IHS Markit BOM Intelligence The solution: BOM Intelligence BOM Intelligence is the most user-friendly and intuitive bill of materials analysis platform in the industry. BOM Intelligence helps proactively manage component obsolescence, compliance, and extended supply chains. In addition, BOM Intelligence helps eliminate redundancy, avoid excess inventories and component shortages, and reduce the risks of using counterfeit parts. Risk Score definitions Distributor listings Multi-level BOM tree support
IHS Markit BOM Intelligence BOM Intelligence allows a wide range of users, from novice to expert, to easily find critical parts data and information required to: Proactively manage component obsolescence and compliance Avoid shortfalls of critical components to meet production and revenue goals Avoid supply chain constraints with drop-in component replacement parts Build compliant products in markets with environmental compliance regulations FFF drop-in replacements (alternates) Identify at-risk components and technology throughout the entire product lifecycle Manage authorized distribution supply chains and mitigate counterfeit part risks Identify technology advances that can affect designs and parts obsolescence Realize opportunities to procure less costly parts and improve margins Authorized distributors
IHS Markit BOM Intelligence ACCESS TO THE WORLD S LARGEST PARTS DATABASE BOM Intelligence provides access to the IHS Markit Parts Database, the world s largest component database with attribute data and documentation for over 500 million electronic, interconnect, electromechanical, and fastener parts, from more than 4,500 manufacturers. BOM Intelligence users can quickly compare parts side-by-side to enhance technical decisions, as well as allocate design and sourcing resources from within the BOM Intelligence interface. Industry s most comprehensive component database Side-by-side part comparison
IHS Markit BOM Intelligence AUTOMATE CRITICAL PROCESSES Organize, manage, and analyze BOMs in a single, secure environment Load data easily using a one-step BOM import Simplify the part number and manufacturer cleansing process, including part number auto-matching Build a knowledge base of reconciled supplier and part exceptions Track new, reviewed, and under-investigation alerts Summarize exceptions and obsolescence impacts One-step BOM import Access both current and historical part information, including data sheets, application notes, product notices, environmental documents, technical attributes, and manufacturer part cross-references Auto-matching/import options
IHS Markit BOM Intelligence IDENTIFY POTENTIAL IMPACTS EARLIER Receive daily updates for component status and time-critical data such as EOL and PCN, GIDEP (Government-Industry Data Exchange Program) alerts, and counterfeit notices regarding substandard and high-risk parts Quickly view and compare lifecycle, environmental, and supply chain risk scores based on part status, years to end-of-life forecasts, number of active suppliers, part availability, and RoHS/REACH compliance Alert listing Determine the presence of hazardous substances from the REACH SVHC (substance of very high concern) lists and RoHS3 through manufacturer FMD (full material disclosure) data View reports based on part number, technical characteristic, alert notice, or manufacturer Generate 2/4/8-year forecasts at both the assembly level and part level PCN/EOL document Counterfeit alert document REACH document FMD document
Find out more How do you manage your BOM? Technological advances are revolutionizing the electronic component parts industry. IHS Markit s BOM Intelligence is the most user-friendly and robust bill of materials platform in the industry and can help businesses eliminate redundancies, avoid excess inventories and component shortages, and reduce the risks of using counterfeit parts. Get started today. Contact an expert to schedule a personalized BOM Intelligence demo. @IHS4Tech About IHS Markit The Technology Group at IHS Markit is the leading source of information, insight and analytics in critical areas that shape today s technology ecosystem from materials and components, to devices and equipment, to end markets and consumers. Businesses and governments in more than 150 countries around the globe rely on the deep market insight and expert independent analysis of our 300+ industry analysts in technology sectors spanning IT, telecom, media, industrial, automotive, electronics, solar and more. Copyright 2017 IHS Markit. All Rights Reserved 147951924-JH-0417