Fifteen seconds of scrolling through your favorite news platform quickly reveals the sourcing crisis has become so extreme that even business leaders who have never before given much thought to logistics have now developed a case of “supply chain brain.” While a small group of elite risk analysts and supply chain thought leaders predicted the current crisis in early 2020, no one was prepared for its scope and scale. For this reason, solutions are increasingly in short supply, and businesses are left with fewer and fewer options.

At Pivot International, well before the current crisis began taking shape, we developed a reputation as a leading global new product development (NPD) partner with disruption-defying capabilities. Since the pandemic’s peak, our reputation has only grown, and today, we continue to provide strategies that help buffer our partners from impact. In the shorter term, if a way forward is to be found, it will likely lie in domestic sourcing and engineering workarounds. In this piece, we’ll explore both strategies to help you determine if they may benefit your business.

Domestic Sourcing and Manufacturing

The complex interdependencies of the global supply chain preclude easy answers or magic bullets to the current crisis. For instance, even if a part or component can successfully be sourced from overseas, the challenge of procuring a container for transport can render what seems to be a promising way forward yet another dead end.

This means, for many US businesses, if a part or component can’t be sourced or manufactured domestically, it can’t be sourced or manufactured, period. At Pivot, depending on your needs, we may be able to help you overcome this problem. Although we are a global firm, a significant portion of our 320,000 square feet of engineering and manufacturing space is based in the heart of the American midwest.

Four of our US-based subsidiaries — Avatar, EDM, MCC Electronics, and DigitTron — specialize in IoT, SMT, industrial controls, box builds, electronic and through-hole assemblies, and much more. These locations offer varied and highly flexible runs, including prototype runs, small- and full-production runs, and short-to-medium inventory runs of electronic product solutions.

While domestic sourcing is typically less cost-effective than global sourcing — even in the best of times — this is not always the case. In light of the current crisis, the cost-benefit analysis of domestic vs. global sourcing may well reveal the former to be the clear winner.

Design Workarounds (The Power of DFM)

Understanding what we mean by “design workarounds” begins with understanding the power of DFM (Design For Manufacturing.) DFM is a distinct subspecialty that very few US firms can deliver in-house. DFM teams approach NPD from a perspective that takes into account the limitations of manufacturing technology and equipment. Not only does this ensure from the get-go that products can be cost-effectively manufactured at scale, but it also helps to drive innovation. How? By forcing teams to come up with novel solutions to stubborn design and engineering challenges.

It’s not hard to see how DFM has everything to do with the ability to overcome supply chain challenges. For example, DFM allows teams to approach a potential product design with the following reasoning: “Normally, this design would require X component or Y part, but because X and Y aren’t currently available or are cost-prohibitive, could we possibly substitute Z, which is procurable and cost-effective?”

At Pivot, by sourcing either domestically or from our diverse global network, we can often procure alternative components, parts, and materials that work every bit as well as those originally intended for a design.

Approximately 30-50% of the products we’re currently developing for our clients are created with these kinds of successful design-and-engineering workarounds and use-case optimizations. Again, even under the worst of circumstances, this approach drives cost-efficiencies. But amid a supply chain crisis, it can also be the difference between a business’s success and failure.

Supply chain challenges have never been more extreme, and longer-term, sustainable solutions will require a concerted effort between leading supply chain experts, key industry stakeholders, and astute policymakers. In the meantime, shorter-term strategies may be your business’s best bet in mitigating the crisis and protecting your bottom line. If you’d like to learn more about how we can help you weather the storm and find your way forward, contact us today.