Moving raw materials, components, or finished products from the factory to the consumer has become a complex and uncertain process. Issues such as labor shortages, shipping bottlenecks, and public health restrictions have pushed many manufacturers to their limits.
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Supply chain shortcomings have had a particularly severe impact on the automotive manufacturing industry. Once-streamlined production lines slowed sharply as securing third-party vehicle components became increasingly difficult.
In the case of electric vehicle (EV) production, it was one of the smallest vehicle components, microprocessors, that proved to be one of the most significant obstacles to efficient manufacturing.
Microprocessors control and regulate many of an EV’s functions, but the undersupply of microprocessors has only served to highlight the fragility of the supply chain. This shortage has also required manufacturers to become more agile and adaptable in order to keep production as close to normal as possible without too many compromises.
How the Automotive Chip Shortage Exposed Supply Chain Vulnerabilities
Whilst in part due to the COVID-19 pandemic, the automotive chip shortage was notably affected by other factors. The global health crisis played a role, but increasing consumer demand, pre-existing shortages in raw materials and components, competition for resources, and a lack of diversity in the production supply chain all contributed to the supply chain crisis.
These factors prompted the US Commerce Department to describe the situation as alarming and regard this as a major threat to factory production and the ongoing need to minimize modern transportation’s reliance on fossil fuels.
Supply chain vulnerabilities arising from chip shortages in the automotive industry have also led to delayed production and increased prices in a range of items, including TV sets, washing machines, and car microprocessors.
The chip supply chain has been further impacted by more recent events. For example, Russia’s attack on Ukraine has worsened the silicon shortage. Ukraine supplies roughly half of the world’s semiconductor-grade neon, essential for the lasers used in chipmaking. This has led to increased chip shortage-related automotive vulnerabilities and further added to supply chain shortages since 2022.
The electrification revolution in transportation continues to be slowed by the lack of availability of these chips. In some instances, parking lots full of new cars cannot be completed until new chips arrive.
An executive order referred to as the CHIPS and Science Act of 2022 aims to address the automotive chip shortage and related supply chain vulnerabilities. However, this is a long-term solution that will require a considerable amount of time before providing relief.
As chip shortages continue, manufacturers are forced to employ aggressive automotive supply chain management, creativity, and patience.
Addressing the Car Microprocessor Shortage with Sensors
Different automotive sensor manufacturers have implemented a number of creative solutions to help mitigate the impact of the silicon shortage. For instance, Ford began shipping its Explorer SUVs without all the chips installed.
One of the most effective responses has been the use of ‘swap-outs’. In this context, a swap-out means designing and manufacturing products able to accept parts made by other manufacturers. However, swap-outs involve more than simply replacing a part; each substitution requires rigorous testing and approval.
For example, a substituted sensor component requires additional testing and verification to confirm that it works as intended and performs under different environmental conditions. A different circuit board may require a different type of soldering, potentially impacting its function if completed incorrectly.
Sensor parts must still meet the Production Part Approval Process (PPAP) required to ensure consistent quality despite supply chain problems. In the case of the automotive industry, it may be necessary to verify that items meet as many as 18 requirements, including:
- Design records
- Design Failure Mode and Effects Analysis (DFMEA)
- Engineering change documents
- Customer engineering approval
- Process flow diagrams
- Process Failure Mode and Effects Analysis (PFMEA)
- Control plans
- Measurement System Analysis (MSA) studies
- Dimensional results
- Material performance test results
- Initial process studies
- Statistical Process Control (SPC)
- Qualified laboratory documentation
- Appearance Approval Reports (AAR)
- Master samples
- Sample products
- Checking aids
- Records of compliance with customer-specific requirements
- Part Submission Warrant (PSW)
Ensuring Streamlined Swap-outs by Working with an OEM Sensor Manufacturer
Manufacturers looking to leverage swap-outs to better manage supply chain issues are advised to work with an experienced EV sensor manufacturer. A good sensor manufacturer should have the expertise to ensure any swap-out meets design specifications, allowing manufacturers to complete all required testing to ensure compliance.
When engaging with an EV sensor manufacturer, it is prudent to check:
- How sensors are manufactured, for example, whether sensors are made from scratch, or whether they are assembled using sourced components.
- Where resources come from, including raw materials and prefabricated components. For example, are materials and parts sourced domestically or from an international source?
- What raw materials or components stocks are kept on hand or available via the sensor manufacturer’s supplier, or how much inventory is it willing to purchase.
- Whether or not the sensor manufacturer has robust long-term agreements for sourcing raw materials or components.
- The type of allocation for components, what buffer is in place, and how much volume can be provided to customers.
Above all, carmakers need partners who offer complete transparency over design changes and sourcing. It is also important that manufacturers be made aware of any changes and provided with appropriate documentation so that they have an accurate record of a final product’s makeup.
Documentation should also include appropriate testing and validation to ensure that products meet the necessary manufacturer’s standards and regulatory requirements.
Mitigating Supply Chain Vulnerabilities
The global supply chain shows signs of recovery, but a return to pre-2020 conditions remains distant.
Manufacturers must continue to mitigate supply chain vulnerabilities from chip shortages in the automotive industry in the meantime, and this will continue to require a mix of ingenuity and patience.
For EV sensors and their microprocessors, experienced suppliers are essential in keeping production schedules on course.
Acknowledgments
Produced from materials originally authored by Amphenol Advanced Sensors.
This information has been sourced, reviewed and adapted from materials provided by Amphenol Advanced Sensors.
For more information on this source, please visit Amphenol Advanced Sensors.