Category: Coronavirus

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Electronic Components Date Code: Like “Mama Always Said”

“My mama always said, life is like a box of chocolates. You never know what you’re gonna get”— Forrest Gump, 1994. In the movie, Mama (played by Sally Field) uses this analogy to explain to Forrest how life is unpredictable. In reality, we do know what we’re “gonna get” when we buy a box of chocolates or any products. We also know the expiration or use-by date and when and where it was made. As important as knowing what we’re getting, we need to be able to trace back to when it was made. This information is referred to as batch code or date code.

Similarly, in electronics components, the date code indicates the manufacturing date. There is a standard published by the Electronics Components Industry Association (ECIA) that requires a four-digit date code marking on the components. Following the standard becomes impossible when the component size is shrunk to smaller than a grain of rice. According to the ECIA, the date code is marked with the four digits (YYWW); the first two digits stand for the last two digits of the year, and the last two digits are for the number of weeks. When date code marking is not possible, then it falls on the manufacturers to define the format and where customers can get that information. This results in a different format for different manufacturers. 

Why the need for traceability?

“Today, more than ever, customers require component traceability back through the supply chain to the manufacturer as part of their counterfeit prevention policies” — ECIA guidelines. The counterfeit problem has exploded in recent years due to the shortage of parts in the market as demand grows and the sophistication of the counterfeiters.    

During my years as a manufacturing engineer, part of failure and root cause analysis was to look at the date code of the components to figure out if there is a trend. Using date code information as part of the analysis, it helped to isolate the product failures due to defects during component manufacturing, during the assembly process, or inherent in the customer product design.  

“Moreover, date codes may be contributing to one of the supply chain’s biggest problems: excess or obsolete inventory,” according to Barbara Jorgensen. “Components are rarely, if ever, consumed immediately by end customers. Finished products may sit on a warehouse shelf for months or even years. Date codes can expire if components aren’t moving.” (Are Electronics Date Code Practices Obsolete?, EPSNews, August 8, 2017.)

Also, electronics components degrade over time. Some Electronics Manufacturing Services (EMS) companies mandate not to use any components with date codes that are older than 2 years. This is due to the solderability issue. If this catches on and guidelines are established, there will be a lot of excess inventory to be scrapped to landfill. This is conflicts with our global plan in the circular economy to prevent E-waste.  

Solving the date code problem

Perhaps advancements in technology like Blockchain will allow us to trace the component supply chain without the need to mark on the component, solving all these issues.  But for now and in the immediate future, date code is our only way to trace electronics components as they make their way through the supply chain. With the COVID-19 pandemic, companies are beginning to understand the need to collaborate with others in a sharing ecosystem — an ecosystem that allows excess components to be used efficiently rather than sitting on warehouse shelves. When excess components change hands often such that excess and obsolete inventory is eliminated, date code practices may not be important and therefore become unnecessary. 

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Surviving In the Eye of the Perfect Storm and Beyond – a procurement alternative solution for the electronics industry

COVID-19, the pandemic of the 21st Century, has brought the global supply-chain to a grinding halt for all manufacturing industries except paper products and food, beverage, and tobacco, according to ISM Report on Business, April 2020. The pandemic hit us like a freight train.

The U.S. Manufacturing PMI (Purchasing Manager’s Index) graph (below) shows the direction of the economic trends in manufacturing. The crisis sends the PMI into a vertical dive as we have never seen before. This is the result of countries having to take drastic measures to shut down their economy and require their citizens to shelter in place for months to prevent the spread. Every business along the supply chain is shutting its doors abruptly overnight.

 

 

Before the pandemic, the electronics industry had already been suffering from the shortage of components due to the explosion in technological innovations and the surge in government defense spending. Artificial intelligence, 5G, Blockchain, self-driving, and electric cars create demand for new products. To replace the outdated carrier’s fleet, the United States Department of Defense has ordered 10 new classes of super carriers, with the first carrier to be delivered and commissioned into service later this year. If you’re working in the supply chain/procurement department, you have your ‘work cut out’ for you.

As the demand exceeds the supply at the distributors, and lead times are getting longer at the component manufacturers, it creates a “toilet paper gate,” where big companies like Apple and Google are hoarding the materials. If you are a buyer working at a startup or small company, your 14-hour workday is now a norm. The materials procurement team is desperate to get the materials so they can build and ship products to their customers. They have to look into a different option to get the materials: buying from a broker in the gray market.

Risks of buying from brokers

Buying materials from brokers is like playing a game of Russian Roulette.  Every time you purchase materials from a broker, you are spinning the pistol cylinder in the hope that you don’t receive counterfeit components. Most brokers themselves don’t know where the components are coming from. There is no visibility and transparency in the gray market. It’s the wild wild west. This is why in recent years counterfeit components have become a major issue.  Besides the counterfeit risk, dealing with unknown brokers, especially from overseas, poses another issue – trust. There is simply no brokers rating system or way to know who you are dealing with. It could be some kids in Africa sending out a scam email posing as a vendor. The brokers demand payment in full before shipping out the materials. Because of these fears, buyers choose to work with a few well-known brokers.  Even this way, counterfeit materials have found their way to the buyers.

Materials shortages, long lead times, and now demand order/production disruptions due to the COVID-19 shutdown create the perfect storm for the industry.  When the pandemic crisis is over, the materials/inventory nightmare begins. Here is the irony: While you are frantically locating components to fill your shortages to meet the outgoing shipments, you also face an excess of other types of components due to minimum order quantity (MOQ) and canceling orders. These issues are not new, but the pandemic crisis magnified it 10 fold. But there is a “light at the end of the tunnel.”

One solution: sharing communities

Literally, “it takes a village” (African proverb) to solve these issues – a sharing-community for the electronics components – MOQller.com. An ecosystem that allows companies to connect and share only the materials information; the companies’ identities remain anonymous during the trading process. An easy-to-use, secured, and trusted community will prevent counterfeit materials, save you time and money, and help reduce excess-inventory for your company. Now you can locate materials to fill your shortages through others’ excess-inventory. Here are 10 more advantages of using MOQller.com over a broker:

    1. We only release your payment to the sellers after you confirm receipt of shipments.
    2. Your materials purchases will be shipped from the seller’s warehouse to MOQller. We then repackage and ship to you.
    3. Your company information will not be visible to the sellers and vice versa.
    4. You buy the materials with a shorter lead time and in smaller quantities.
    5. If you cannot locate the materials on MOQller Marketplace, send us your (wish) list to info@moqller.com. Our team will locate the materials for you. We have access to companies’ approved vendor lists, so we know who is using the same components as you.
    6. There is only a 15% fee per transaction.
    7. Sellers are encouraged to list their excess as soon as possible, so for the material you buy from them the date codes are newer and not old due to sitting in the warehouse for years.
    8. Net 30 payment option (end of 2020).
    9. You can freely buy materials at MOQ from the distributors and then list your unneeded portion of those materials on MOQller.com for sale right away.
    10. It’s free to join the MOQller community.
    11. You not only save time and money but also do good for the environment (reducing e-waste).

We built this community for you. “Every year we create 50 million tons of e-waste per year. This is equivalent in weight to 4,500 Eiffel Towers” (World Economic Forum).  Join the MOQller Sharing-Community and help create a better world.  Let’s be a part of the solution.