The challenge
Traditional “silo mentality” is the greatest enemy of a stable supply chain. Often, the engineering department makes a decision about an alternative component in isolation. The procurement department is then faced with a solution that, while technically suitable, cannot be procured due to past negative experiences with the manufacturer or unreliable supply chains.
The situation is even more critical when production only discovers after qualification that the new component is causing problems on the assembly line due to differing housing shapes or thermal properties. These late correction cycles cost valuable time and capital.
Risks for Businesses
If component selection is not considered holistically, risks may arise that often do not become apparent until mass production begins:
Miscalculation of availability:
A component may be technically perfect—but if it is about to be discontinued (EOL) or if the manufacturer is known for long lead times, the “solution” immediately becomes a new procurement problem.
Miscalculation of availability:
If EMS (Electronic Manufacturing Services) is brought in too late, it often isn’t until the test run that it becomes apparent that the new component requires special soldering profiles or that the placement machines need to be adjusted.
Procurement Challenges
A component that the purchasing department rejects due to a poor track record or a lack of transparency in the manufacturer’s supply chain creates friction and forces the development team to make further, costly design changes.
Loss of quality
Without direct communication with the EMS, it remains unclear whether the component will ensure the usual high level of process reliability when used in conjunction with the existing solder pastes and reflow processes.
RTS electronic’s Solution Approach
Procurement History: Purchasing is our check and balance. We don’t just evaluate manufacturers based on spec sheets; we draw on our years of experience: Has this manufacturer kept its word during times of crisis? What is the complaint rate? We present you only with alternatives that have received the “green light” from a technical, economic, and logistical standpoint.
360-Degree Lifecycle Check: An alternative only makes sense if it is also future-proof. We use our databases to monitor whether the proposed component will be available in the long term, thereby avoiding the risk of switching from one obsolescence problem to the next.
Interdisciplinary Task Force: We bring together the requirements of all stakeholders. When we propose an alternative, we not only review it with your technical R&D team, but also cross-check it against our procurement team’s insights regarding supplier reliability and historical delivery performance. We maintain close and ongoing communication with your procurement team throughout this process.
Multilateral Alternatives Instead of a Fixed Product Line: We are not tied to any single manufacturer. While traditional distributors are limited to the brands in their own product line, we view the entire market with complete impartiality. We present you with several qualified manufacturers tailored to your bill of materials as technical and cost-effective alternatives. This increases your bargaining power and reduces existing dependencies. We focus on your project rather than being guided by contractual ties to manufacturers.
In practice
The situation: In the midst of a highly critical allocation phase, a complex industrial control system was at risk of a sudden shutdown of its production lines because a key component had been unavailable on the global market for months. In such market phases, every hour counts: If the specialist departments hesitate even a single day in approving an alternative, the remaining global inventory on the spot market has usually already been snapped up by the competition.
Strategic Planning: RTS electronic has established fixed structures in advance specifically for these scenarios, in collaboration with one of our long-standing EMS service providers. Not only were specific, cross-departmental points of contact and direct decision-makers designated, but binding substitution policies were also defined to cover absences due to vacation or illness. The EMS service provider mirrored this process directly with its end customer, resulting in a cohesive, responsive chain.
The result in practice: When RTS identified a technically suitable and immediately available alternative through its global sourcing network, the predefined process chain kicked into action: Thanks to the predefined decision-making processes and the representatives’ constant availability, we were able to fully qualify the alternative component—both technically and commercially—within a single day. The purchase decision was made without any bureaucratic delays, the goods were secured immediately, and the end customer’s production continued seamlessly without a single hour of downtime.
FAQ – Frequently asked questions
Why is the EMS service provider so important when selecting alternative components?
The EMS knows your production line best. A component that is technically “compatible” can still lead to soldering defects or delays in practice if the pad design or reflow profile isn’t perfectly matched. Early involvement prevents costly stoppages during assembly.
Can the purchasing department really influence technical decisions?
Absolutely. A technically superior component is of little use if the purchasing department knows that this manufacturer’s ability to deliver has regularly collapsed in the past when it comes to allocations. The purchasing department’s assessment serves as the “reality check” for the data sheet.
Can we use RTS electronic to qualify alternatives from manufacturers that aren't currently listed in our systems?
Yes, that’s exactly our approach. As a manufacturer-independent partner, we break free from the constraints of rigid line cards. If the market leader can’t deliver, we search globally for qualified secondary and tertiary sources (second sourcing). We provide your procurement and R&D teams with all the necessary data sheets, technical reports, and samples so that you can quickly onboard new, reliable manufacturers.
What happens if a technically approved alternative is more expensive than the original component?
Here, we work with your purchasing department to assess the financial impact. A slightly more expensive alternative component that’s available immediately is almost always worth the cost if it prevents an impending production line shutdown and the associated immense downtime costs (often five- to six-figure amounts per hour). In this case, the alternative serves as insurance for your ability to deliver.
Ready for 24-hour approvals? Get your component evaluation ready for the next allocation!
Avoid costly mistakes during the design phase and secure the full support of purchasing, R&D, and production. RTS electronic is your partner for evaluating technical alternatives in a comprehensive and risk-free manner.
Your direct contact information: +49 (0) 2309 95 17 0
Email address for your bills of materials and inquiries: info@rts-electronic.de
