The Paragon Electronics Group Blog

Japan and your supply chain, an update.

Following the catastrophic events that have taken place recently in Japan, we’ve released another update on the latest developments that could affect your supply chain. While these events represent the most significant shock to the global electronics supply chain in recent memory, this impact is shaded substantially by the human cost.

Since we last blogged, this cost has rocketed. Today, more than 8,000 people have died in the disaster, thousands are injured and at least 12,000 are missing. Many people are living in evacuation centres as 14,000 homes have been destroyed and around 100,000 are damaged.

These are sobering thoughts to say the least. So, before we proceed with your electronics update, we’d like to point you in the direction of the Red Cross. If you’d like to help on a personal level, you can donate here.

Currently, the situation in Fukushima continues to be the main source of concern and we’ve seen the suspension of one-quarter of the global production of silicon wafers used to make semiconductors. Although the initial dust from the quake has now settled, the impact of these events, and the impact of how global players respond to these events, will ripple through the electronics supply chain for the remainder of this year and beyond.

For more information about the individual companies and facilities affected, please read our latest official update.

Download Japan statement 2 - March 2011

Of course if you would like further information, please don’t hesitate to contact us. 

Japan and your supply chain.

 

It can’t have escaped your attention that Japan is experiencing a humanitarian disaster of epic proportions. The massive earthquake and resulting tsunami that struck the region on 11^th March 2011 have caused widespread destruction, relayed on television screens around the world.

More than 4,300 people have died in the disaster, thousands are injured or missing, and over 440,000 people have had to leave their homes. Like many people, here at The Paragon Electronics Group, our thoughts are with everyone affected. Of course, although they pale almost into insignificance when looking at the big picture, there are business implications raised by the disaster which we would like to bring you up to speed on.

Before we leave the human angle and move onto the supply chain implications, we’d like to point you in the direction of the Red Cross. If you’d like to help on a personal level, you can donate here. 

Following these devastating events, there is a great deal of concern regarding the possible impact on electronic component availability and supply. Since first hearing about the earthquake, we’ve been in regular contact with all our relevant suppliers and have been receiving daily updates. Going forward, we intend to remain in close communication with these suppliers and will keep you updated in a series of bulletins.

Download Japan statement 1 - March 2011

This bulletin includes our advice on preventative action, an outline of the current situation and links to the websites of our affected component manufacturers. Of course, if you would like further information, please don’t hesitate to contact us.

‘Put all your eggs in one basket and watch that basket.’

We’ve all heard the expression, ‘don’t put all your eggs in one basket’. Here at the Paragon Electronics Group, we think the individual who coined the phrase perhaps didn’t realise the value of their eggs.

Instead, we’d like to point you towards an alternative philosophy, since it’s one which has proved extremely beneficial for our customers ….. ‘Put all your eggs in one basket and watch that basket.’

The author of the second quote may be in doubt as it is attributed to both Mark Twain and Andrew Carnegie depending on where you look, but it’s very real relevance to electronics manufacturing services (EMS) is not.

As the EMS sector rebounds from the downturn of 2009-2010, we’re seeing a huge increase in demand for our unique mix of electrical, mechatronics and top-end configure-to-order assembly/integration services. Coupled with extensive supply-chain management expertise, our broad manufacturing offering is virtually unprecedented among EMS companies.

Our broad range of manufacturing services is like a big, versatile, and extremely reliable basket that we closely ‘watch’ on behalf of our customers. Our customers can rely on us to take care of all of their manufacturing requirements – from pcb assembly, large-scale integration, complete custom system integration, configure-to-order manufacturing, spares/repairs, total supply chain management and outbound logistics. It’s a breath of fresh air for customers tired of compromising elsewhere. Our rare blend of expertise and resources – not only in the UK but in Central Europe too – means that our team can not only deliver box-build assembly reliably, efficiently and at a reduced time to market, but also, at the best value. 

As a £30m group, our size is attracting larger OEM customers whose products do not ideally fit the business models of the Tier 1 EMS providers. For these customers, our ability to provide a complete configure-to-order and direct ship fulfilment service from our facilities in the UK and The Czech Republic is invaluable. To continue our analogy through to its conclusion, these customers know the value of their eggs – and so do we!

Looking back, and forwards!

Here at The Paragon Electronics Group, we’d like to take this opportunity to wish you all a very merry Christmas and a prosperous 2011.

There’s no denying that, for many in the electronics industry, this year has been tough. We’ve faced an unforgiving economic climate but, I’m pleased to say, our customers have all successfully weathered the storm.

But it hasn’t been all doom and gloom in 2010 – far from it. Our world-class programme has continued at pace, seeing us invest heavily in enhanced production facilities at JJS Electronics both in the UK and Czech Republic, along with new production, engineering and development staff plus leading-edge screen printing, pick & place and optical inspection equipment. This has benefitted Paragon Electronics Group customers Europe-wide!

Another cause to celebrate has been our AS9100 accreditation across three Paragon Group sites – Paragon Electronic Components in Kempston, UK; JJS Electronics Ltd. in Lutterworth, UK; and JJS Electronics s.r.o. in Chomutov, Czech Republic. Recognition of excellence across the business in quality management and operational practice. Our customers can be confident that all our quality management systems meet the demanding standards required for all aspects of quality in the aerospace industry.

We’ve also been celebrating a raft of new business wins, driven in part by our ongoing investment and commitment to continual innovation and also by our ability to help customers overcome challenges such as spiralling component lead times and the issues presented by the increased threat from counterfeit components. There’s never been a better time to focus on effective supply chain management.

We wish you all the best for 2011 and would like to thank you for your support throughout 2010. Have a fantastic festive season!

- John Mayes, Group Managing Director

How to mitigate risk from your supply chain

It’s no secret that when it comes to the current state of the electronics industry – and even, the wider economy – the only certainty is uncertainty. This is why, now more than ever before, the issue of supply chain management has been thrust into the limelight.

During the recent Electronica exhibition, EMSNow approached me to discuss the issue further. I was only too happy to oblige and, if you’re interested to hear what I had to say, you can watch the video here.

Twelve months ago, no-one could predict that the current level of market uncertainty would last so long. It’s definitely the longest period of instability I can remember. Indeed, twelve months ago, many manufacturers took the decision to cut back on capacity; they mothballed their production facilities which made lead-times longer and made part allocation even more difficult.

So, how to mitigate the risk when it comes to your supply chain? It’s a big question, and it’s one which we answer for our customers daily. We achieve this by knowing what’s going on in the market, staying close to our suppliers, maintaining high levels of market intelligence and keeping customers up to date. We’re also extremely strong on product knowledge and work closely with our customers to resolve product and process issues that cannot be resolved purely by supply chain pressure.

The capacity to take complete control of our customers’ supply chain is where we really succeed as a group. To find out more about our approach and how manufacturers can alleviate risk in the current climate, watch me being interviewed by EMSNow’s Phil Stoten at Electronica.

- Murray Dilks, Director of Purchasing for The Paragon Electronics Group.

Why we’ve donned some fetching facial hair…

Here at The Paragon Electronics Group, our team is usually pretty clean shaven. However, all this changed in November, when teams from Paragon Components and JJS Electronics took part in the nationwide MOvember campaign.

Building on our very successful contribution to the campaign last year, twenty-seven of our staff stepped up to the challenge in order to generate awareness for men’s health issues -raising a fantastic £6271 for The Prostate Cancer Charity in the process!

The challenge for Paragon and JJS employees was to grow a moustache for the entire month of November. The only rules were that participants must begin the month clean shaven and then let their moustaches grow. The idea behind the campaign is that moustaches become the ribbon for men’s health and the means by which awareness and funds are raised for cancers that affect men.

Normally clean shaven members of the Paragon and JJS team ditched the smooth finish in order to sport some very fetching facial hair. They might have received a few strange looks, but it’s been worth it. We’re very proud of the amount of money raised, especially as it is 50% more than last year’s total.

Participation with the MOvember cause has continued to grow year on year and in 2009, global participation climbed to 255,755. The campaign is aimed at making men aware of the risks they face to increase early detection, diagnosis and effective treatment. Funds raised support a number of innovative education, support, research and awareness initiatives.

To learn more about MOvember, visit http://uk.movember.com.

Offshore isn’t working? We beg to differ!

Recently, there’s been a series of articles in the press from UK-based EMS companies suggesting that manufacturing is ‘coming home’. A number of them have stated that they are winning business from people who’ve previously gone offshore. That’s clearly good news for them but we feel that to suggest that offshore isn’t working, is a very sweeping generalisation and is worthy of further analysis. Hence this blog.

It’s perhaps no coincidence that the companies who have made these statements do not have an offshore capability of their own! Of course, offshore is no panacea. But, under the right circumstances, for the right product with the right build volumes, offshore is an entirely appropriate and effective manufacturing strategy.

And how do we know this? Because, within the Paragon Electronics Group, we have plenty of experience in offshore manufacturing. This includes our own facility and our range of accredited manufacturing partners. Firstly, with our own, in-group, contract electronics manufacturing services company, JJS Electronics, we have state-of-the-art manufacturing facilities in both the UK and Czech Republic. We recognised the role of Central and Eastern Europe (CEE) relatively early and JJS Electronics s.r.o. (our wholly owned assembly facility in Chomutov, in the Czech Republic) has been operational for nearly six years now. 

We employ over 160 people at our Czech facility and are actively recruiting. Every member of our Czech workforce consistently exhibits an exceptionally strong work ethic and a desire to help us exceed our World Class standards. Quality, processes and procedures are the same across the Paragon Electronics Group and we operate the same QMS, IT and phone systems at all group sites. Indeed, each group company recently achieved AS9100 registration which included our components and supply chain management business – Paragon Electronic Components plc. Furthermore, our Chomutov facility is one of only 26 companies to receive this certification in the Czech Republic. Offshore’s detractors often hold a naïve view of these regions. This view is misplaced; the Czech Republic is an EU country and its workforce is extremely talented. We’re proud to have Chomutov assembly professionals on our team.

Another example of our offshore experience is Paragon’s Electronics Manufacturing Management (EMM) service. This has been provided by Paragon since 1997. Paragon works with a network of contract manufacturers around the world, who we can select based on the specific requirements of a project. When it comes to contract manufacturing, we always say that one size does not fit all, which is why we work with assembly partners in the UK, Europe and the Far East – a time proven approach that continues to work extremely well.

Going back seven or eight years, it seemed like there was a near ‘gold-rush’ to push projects out to China. Without a doubt, some companies outsourced projects that were entirely inappropriate, this was due to a range of factors e.g. complexity, volume and proximity to market to name but three. However, when it comes to the question of UK vs. offshore, it’s totally inappropriate to make glib comparative statements as, in many ways, it’s horses for courses.

We’re a British-based group of companies and we’re extremely proud of the skills, expertise, technology and experience we have here in the UK. But we’re also proud of our Czech workforce with their strong work ethic and technical skills base and our global service partners including those in the Far East. To counter the anti-offshore comments that we’ve seen in the press recently, I’d suggest that OEMs are careful before writing-off an approach that could benefit their customers in a variety of ways. Take each project on its merits, understand all the requirements and identify the ‘best-fit’ manufacturing strategy. It’s the only way to keep everyone happy!

- John Mayes, Group Managing Director

Lights, camera, action! Group Managing Director, John Mayes, talks to EMSNow…

Here at the Paragon Electronics Group, we’re continually investing in new people, new processes and new equipment – all part of our ‘World Class’ initiative. There’s so much going on, both here in the UK and at our assembly facility in the Czech Republic. 

That’s why, when Phil Stoten from the online industry news website, EMSNow, approached me to tell our story, I relished the opportunity to talk about all the new opportunities that the recent growth has created for our business and our customers.

You can watch the video here.

The interview spans a variety of different aspects of our business, plus an update regarding our PCB assembly and box-build capabilities.

I also explain how we’ve extended our electronics manufacturing capabilities at JJS Electronics’ facility in the UK by hiring new NPI specialists, test engineering & process engineering expertise, and announce the AS9100 registration recently awarded to both of our state-of-the-art manufacturing facilities in the UK and Czech Republic.

Watch John Mayes being interviewed by Phil at EMSNow here.

 

Counterfeit components on the rise?

The industry body AFDEC reported recently that billings for electronic components in UK & Ireland increased by 38% In June compared to the same period last year. So, we can safely say that the demand for electronic components continues to increase. Good news for the electronics industry and further evidence of its resurgence.

However, as with most things, every silver lining has a cloud. This booming demand, coupled with no visible signs that manufacturers’ lead-times are reducing, means that the flood into the market of counterfeit components seems to be an inevitable consequence. 

For companies like Paragon, responsible for managing customers’ critical supply chains, the ability to prevent and identify fake or poor quality products is vital. 

This is why, here at Paragon, we have strict controls and robust processes to ensure that we avoid, and if necessary detect, counterfeit product. We’ve invested in equipment and developed internal procedures in order to identify suspect components. This means that we can quickly confirm the integrity of a component – good news for our customers. 

Furthermore, we are committed to working with our supplier base to achieve the same quality standards and levels of vigilance to improve the prevention of spurious parts entering the supply chain. 

I’d be keen to hear about your experiences with counterfeit components. Given the current supply/demand situation for electronic components, do you think there is an increasingly opportunistic attitude by the producers of counterfeit parts? Or, has the rising sophistication of detection techniques ensured that the emphasis on prevention is succeeding? Time will tell…

Find out more about our component management expertise here. 

- Murray Dilks, Director of Purchasing for The Paragon Electronics Group.

Testing times for component lead times…

In my first blog for Paragon, I’d like to talk about a subject that is particularly close to electronics manufacturers’ hearts right now – component lead times. As Director of Purchasing for The Paragon Electronics Group, I know it’s a subject that has caused a few concerns over the past few months as lead times quoted by many suppliers have spiralled from an average of eight to ten weeks, to nearer twenty  and sometimes beyond!

Of course, as a supply chain management specialist, Paragon is well placed to meet such challenges. We are rarely passing on these extensive lead times to our customers because our people are highly experienced and resourceful enough to find alternative routes. Sometimes, in this business, there’s just no substitute for good old fashioned know how. Our team know this market inside out, so they know where to go to get the best for our customers in these trying times.

And if you don’t partner with supply chain management specialists such as ourselves, you may well be faced with the prospect of shopping around. However, many businesses are being forced to venture out into the grey market to do so – an environment where it’s not always easy to ascertain the provenance of the part. So, like Paragon, you’ll need robust procedures in place to check, double check and triple check. But there’s undoubtedly a higher level of risk involved.

Getting back to the issue at hand, there’s been plenty of discussion lately about what’s driving these lead times. I’d be very interested to hear your experiences of this situation, and your thoughts as to why it’s occurring. One cause  – and perhaps the most commonly and oft quoted – is that component manufacturers cut capacity last year and were caught out by a resurging demand that was stronger than anticipated.

What do you think? When do you envisage component lead times returning to more acceptable levels? I’d be very interested to hear your take on this. Please leave your comments below…

- Murray Dilks, Director of Purchasing for The Paragon Electronics Group.