# acceptable lead time for electronic components

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#### Crystal Majercik

A good product seems to lack value if it cannot be delivered when the customer needs it. So, "What is an acceptable lead time for the delivery of electronic components as it relates to the Industrial Automation or General Motion Control Market?" First hand experience would likely yield the most credible answers.

Thank you,

Crystal D. Majercik
Marketing Communications Manager
Integrated Industrial Technologies (I²T)
221 Seventh Street, Suite 200
Pittsburgh, PA 15238
PH: 412-828-1200
FX: 412-828-0320
URL: www.i2t-inmotion.com

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#### Rick Lamb

By "electronic components" I presume you mean PLCs, I/O cards, motion controllers, which I call "control components" not the actual electronic components (ICs, resistors, etc) that go into making them..... In my experience, it's either immediate delivery, or forever. If the components are in-stock and delivered either from a local distributor, regional warehouse, or factory warehouse you'll get them in just a few days. Almost everyone has decent logistics these days. If it exists, you'll have it in less than a week. On the other hand, if it's not in stock someplace, don't believe the standard "4 to 6 week" delivery the distributor will quote you. Nobody really does the make to order, quantity of one production. They hold your order until several other customers want the same thing, then they make it when they feel like making it. And if it's not an important item, your lot of production gets pushed back, and back, .......and back. Buy or adapt what's _really_ "off the shelf" or your entire project will be held up by an 8 week delivery on some critical missing part. It seems in recent years, a "stock" items is in some regional or national warehouse 1,000 miles away. Yet the delivery times are excellent. But in the Just-in-time, "make to order" world, with lot sizes of 1, that we theoretically live in now, it's taking LONGER to get a non-stock item. Go figure!
Rick Lamb SpecPlus! Automation Consultants

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#### Alex Pavloff

Rick Lamb wrote:
> Nobody really does the make to order, quantity of one production.<

I disagree.

My company, admittedly a small one, does do this. We don't have any inventory here, and can usually ship two weeks after an order. If you want it sooner than that, you can pay us more money.

I think the original question was a bit broad though.

Alex Pavloff
Software Engineer

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#### Mark Hill

I agree with Alex.
My (read small) company has carved a niche in the marketplace by creating custom hardware/software solutions for some pretty unique applications. Most times our orders are one-off's with delivery dates of a month or more. I'm currently working on an OEM project that probably won't be finished for at least another month! We also distribute products that we guarantee overnight delivery. So, I guess it depends upon the uniqueness of the product and how long you're willing to wait to see your unique product delivered.

Mark Hill
Alternative Connection
[email protected]

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#### Rick Daniel

Boy, that's a complicated question.

We manufacture factory floor data collection terminals and Etherent based data acquisition and control products, and can typically ship small quantities (say 1 to 20) off the shelf. Larger quantities might require a full build/test cycle, and might require 12 weeks or more, if we have to start from scratch -- order parts, build boards, assemble, integrate and test the systems, etc. Typically, this is not a problem because customers generally want larger quantites scheduled out anyway. Many times if we get a good sniff of a potential large order, and think it's pretty solid, we'll start the cycle in advance of actually getting the order and pleasantly surprise our customer. This is a little risky, so we only do it if we're really confident. We did get burned once.

Lead times for components were ridiculously long in 2000. We were having to schedule deliveries for some components, notably tantalum capacitors, upwards of 30 weeks in advance. With the economy being as sluggish as it is and the collapse of the cell phone industry, lead times this year are much better, and not nearly so much of a factor. Vendors who were allocating parts last year and not accepting new customers, this year are back with hat in hand.

Rick Daniel
Intelligent Instrumentation

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#### Bob Peterson

> A good product seems to lack value if it cannot be delivered when the
> customer needs it. So, "What is an acceptable lead time for the
> delivery of electronic components as it relates to the Industrial
> Automation or General Motion Control Market?" First hand experience
> would likely yield the most credible answers.

It depends.

Repair parts need to be available very quickly. At the very least on a overnight basis. It would be even better if a local rep or distributor had commonly needed repair parts available in stock at a local facility.

Parts being used on a new machine can have longer lead times. I think 4-6 weeks is adequate in most cases, and even longer is acceptable much of the time. The real issue with me is not what the lead time is, but being lied to about the lead time. I cannot tell you how many times a sales weinie has lied to me about what the lead time for an item is. If the real lead time is 6 weeks, say so. Don't tell me 2-4 weeks, and then deliver it in 6 weeks.

The other thing I hate is being told is that something is available and then finding out its really a beta test type item, or worse yet its vaporware. I had this happen to me once a long time ago with a communications interface, where the vendor promised us over and over again that it would be available in a few weeks. After 4 MONTHS of "its going to be ready in a week" promises, they finally delivered a product that did none of the things promised. We were forced to totally redesign the control system of several relatively complex machines on the fly because we had depended on this item being delivered and when it finally showed up it had none of the promised functionality. I heard later this cost our client something in the neighbourhood of $1 million NET (fortunately they had selected this particular automation vender so the company I work for was not on the hook). All this over 4 modules sold for less then$500 each as I recall. Needless to say, I have no faith what so ever in this particular automation suppliers promises, even though I think quite highly of the basic product.

One of the things I like about AB is that they are generally very good about not selling things that they can't actually deliver. They learned this the hard way about 10 or 15 years ago, and stopped selling vaporware. I wish the other automation venders would follow the same basic practice.

Bob Peterson

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#### Mike Newell

> What is an acceptable lead time for the delivery of electronic
> components as it relates to the Industrial Automation or General
> Motion Control Market?

Crystal stated "A good product seems to lack value if it cannot be delivered when the customer needs it". In the real world, a great product is worthless if it cannot be delivered when the customer needs it. I agree with Bob, but I would demand that my local rep carry spares (besides the spares I already keep on hand). If they refuse, I would find another vender. Someone out there will be willing to go the extra mile to support what they sell.

Mike Newell
Calcasieu Refining Co.

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#### Bouchard, James [CPCCA]

We use a lot of electronic cards, modules, servo drives etc and even though our suppliers carry an impressive amount of stock there are many items that are almost custom assembled ( such as servo motors with reducers, gear motors with brakes and encoders etc ) or that are very expensive ( motion Controllers ) so we stock them ourselves based on the number we have installed, delivery time and our repair experience. Our general rule of thumb is to have at least two of everything so you can have one unit out for repair and not be left with an empty shelf. Even the best distributor can be caught by events or large orders. For certain less frequently used analog card our distributor said he stocks 6 but if an order comes in for a project all 6 could go at once and the replacement time could be from one week to 12 weeks. If the parts are critical to your operation then the only safe approach is to either have them in stock on your shelf or have the distributor keep some for you as segregated stock that is only available to you. In either case you will have to pay for the "insurance" you are taking out by either buying the product and paying the carrying costs or by paying your distributor to do it for you. The problem gets more difficult when we consider items that are not current models. Generally these items have been replaced by newer ones with more features, better prices etc and are offered basically for the replacement market where you do not want to have to re-engineer the application to accept the newer module ( if it is not a direct replacement for the old one
) here delivery may be very long because of the small quantities and the difficulty and expense of obtaining parts. One approach favored by large multi plant organizations is to maintain one stock of the items that are critical and have long lead times etc for all the plants instead of each plant maintaining its own stock. Clearly being part of a large organization has its advantages.

This may not really answer the question because acceptable like beauty is in the eye of the beholder.

James Bouchard
Johnson & Johnson Products

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#### Bill Gausman

Rick is right, it's complicated.
Further, there is a difference between "acceptable" and "real-life". From a manufacturer's perspective, at least from my tiny company, if an order comes in that is larger than my available stock, I must order circuit boards and components, wait for them to ALL come in, and get scheduled with the assembly/wave soldering company. If everything goes perfectly, it's a bare minimum of 8 weeks for this process. Invariably, there are a few components that hold the process up for a couple of extra weeks. I like to figure 12 weeks for such an order. Not acceptable to someone who needs the product, but the best I can do not being able to afford to warehouse mass quantities of everything someone might possibly order someday, just in case, and not wanting to raise the price to cover the costs of such warehousing.

Once in a while the worst happens, such as the 30 week lead time (or far
worse) that Rick mentioned. The option to waiting is to make a whole lot of phone calls, pay premium prices (5 to 10 x the usual price) for substandard or substitute parts. Remember that all the big manufacturers are doing the same thing, so existing stock quickly dwindles. I remember a few years back, a fire in a potting epoxy manufacturer's plant caused a world-wide shortage of the epoxy used to encapsulate integrated circuits. The most common (pronounced lowest margin) parts were the last on the manufacturer's priority list for the little remaining epoxy. As an example, I had to pay \$2 each for some lousy quality surplus voltage regulators that typically cost 25 cents for the best, just to be able to deliver product.

So, most of the time the manufacturers have stuff in stock for immediate shipment, and the lead times should be acceptable to anyone. Sometimes, however, quick delivery is out of the manufacturers' control. We have to allow for this, or be flexible in our designs.

Bill Gausman

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#### Bill Sturm

I like items to be shipped from stock. We often get short lead time projects and it also helps when replacement parts are needed in a hurry. Anything over two weeks is too long in my book.

Bill Sturm