September 15, 2021

Semiconductor Lead Time Updates: Long-Awaited Relief Possibly on the Horizon

After reviewing the latest semiconductor lead time insights and analytics, LevaData has derived some unique perspectives from customers’ operational and market data.

While supply constraints, such as seasonality or new COVID-19 labor shortages, are undoubtedly still present, the impact of these factors varies. They’re worse at various nodes in the supply chain and affecting specific components within a group more than others.

However, after experiencing a dramatic 2-3x increase in average semiconductor lead times over the last eight to 12 months, it appears that the situation may be shifting again. The delays are shortening or, in some cases, beginning to flatten at the least.

The graph above, which includes up to the first week of September, plots lead times of a basket of commodity components used in almost every electronic device. MCUs, MPUs, and Diodes were some of the initial categories to start the sharp increase in lead times.

Now for the first time, we’ve seen a several-month streak of lead times either flattening or declining – especially in those categories that initially led the lead time increases.  

  • Is this a real plateau or trend inflection?  
  • Could these categories that faced the most significant initial lead time increases indicate that things are beginning to moderate and trend back toward normal?

Most component manufacturer’s facilities are near or at 100% capacity and many companies have been purchasing excess quantities of components to stockpile supply going into the busy holiday season. Are the markets over-stockpiling, and are these changes in lead time momentum signaling the beginning of supply constraints' path returning to normalcy? Or, is it that manufacturers have simply adjusted their forecasts down closer to constrained supply?  

The graph above, which includes up to the first week of September, aggregates that basket of commodities as a single line to show the change in overall lead time momentum.

Many companies’ cash flow was greatly affected by having to tie up more cash than usual to establish sufficient component supplies for enabling continuity of product supply to their customers. However, this change in momentum might be pointing toward brighter days for companies, where “extreme” excess inventory is no longer needed. The change in lead time momentum indicates that the semiconductor market is beginning to shift back toward more balance between supply and demand. However, unforeseen volatility factors, like COVID-19 shutdowns, will continue to impact that trend over the next three to six months.

Maintaining a Competitive Advantage

As we’ve previously mentioned, there are two key requirements you need to satisfy to stay ahead of the game and protect your supply chain. The first is accessing and utilizing reliable, up-to-date analytics on lead time averages and insights. The second is investing in a reputable, always-on risk navigation platform. LevaData’s Supply Risk Navigator software does just that, offering companies the visibility and recommendations needed to safeguard their supply chains and maintain agility. Connect with us today to learn more about our revolutionary, AI-driven platform and what we can do to help you manage these risks and more.

September 8, 2021

Limitless Cost Reductions: Fallacy or Feasible?

For those in discrete manufacturing, one of the most widely accepted truths is that continued cost reductions are vital for both success and survival. Organizations continue to push their supply management teams to find new, innovative ways to reduce costs and protect profits. Traditionally, the feasibility of year-after-year incremental cost reductions has been called into question. Is it actually possible to achieve endless reductions, all while maintaining value, mitigating risks, and streamlining processes?

Some industry veterans say no. The current belief system is that for all organizations, cost reductions eventually have to slow down; at this point, it will be up to supply management teams to find different ways to create value. But is this founded in reality? The answer is that it depends.

Debunking the “Limited Cost Reductions” Myth

First, let’s establish the should-be obvious. It is, of course, impossible for organizations to diminish their cost to $0. But basing the aforementioned argument on this fact is too literal a stance to constitute an industry-wide shift in priorities and goals. Instead, we need to think more figuratively and consider the idea that there are always new ways to cut down on just have to get creative and utilize the right resources.

Take, for example, the common practice of supply disruptions and price gouging. It’s standard for suppliers to take advantage of market volatility to raise prices as high as possible. That way, once the natural price erosion process kicks in, they’re starting from a higher price point and, as a result, are able to squeeze extra spend from their buyers for longer periods of time. To complicate matters even further, most companies tend to launch new products without placing enough of a focus on cost, which inevitably becomes crucial when competition increases and price becomes a prime differentiator in the market.

In this case, after your organization has utilized every standard practice to reduce costs, you might assume that the final price, albeit more than usual, is the “best” you’re going to find. It’s at this point that supply managers might indicate that further cost reductions are impossible and that the only available avenue of recourse is to provide value in other parts of the supply chain.

This method of thinking is representative of the traditional approach, but with new technologies and solutions available, there are other ways of further reducing costs. The key is to harness the information overload and turn mountains of data into specific predictions and actionable recommendations. AI-powered supply management systems provide a holistic overview of the market and notify users of best-price opportunities based on deals completed between peers and their suppliers. With this information, supply management executives have the information and recommendations needed to:

  • Identify available opportunities to modify splits or rationalize costs across plants and suppliers
  • Spot categories and parts that don’t line up with market pricing
  • Identify alternate parts and suppliers that meet your form, fit, and function requirements
  • Identify which market trends indicate what your next risk or opportunity might be
  • Generate negotiation playbooks to set the strategy and determine the likelihood of achieving it

The same logic can be applied to scenarios in which alternative, previously unknown parts are discovered in the market, or when suppliers create new versions of components. These alternative parts or new versions may be cheaper, smaller, consume less power, or more environmentally friendly. With the right solutions, you can quickly determine where replacing your parts with new and improved ones could allow you to redesign your own products to leverage price compression benefits of new innovation.

Achieving More With the Right Resources

Supply chains have been flipped on their heads, and market volatility is here to stay.  But waiting for the markets to calm down and return to equilibrium should not preclude or slow down your cost reduction efforts. Instead, now is the time to push past the tried-and-true and start looking toward the innovative solutions available to help achieve more.

August 31, 2021

Not Just Another Automotive Industry Transformation

The U.S. automotive industry is a key economic indicator of health and market sustainability; its conjoined relationship with supplier industries creates a profound economic and political influence. Yet, despite these roots and associative dependency, the instability of the automotive sector is absolute. Margins trend below 5% in the best of times, and profitability by volume is low, despite huge revenues and large employment numbers

As history might suggest, cyclical transformation is imminent. To better understand what is to come, we first need to look back. Once we’ve done that, the insights provided below will be far more successful. 

A Look to the Past

Material shifts in the macro-economic conditions of the automotive industry and the markets by which they’re serviced are nothing new. Take, for example, the 2008 housing crisis. Credit markets froze, forcing a destructive bottleneck in U.S. auto sales. By 2009, the automotive sector was drowning in an $80B crisis—all while continuing to suffer from overcapacity and market saturation. This financial disaster, along with years of poor fiscal discipline, a general lack of innovation, and the worst corporate performance in American history, created risk across the automotive industries. It was only with a 3.5% government contribution to the total U.S. gross domestic production (GDP) that the market could survive.  

The stimulus saved jobs, created new operating standards, encouraged new financial practices, helped to define employment terms, and facilitated energy efficiency standards across the boards. The apparent lasting effect of this exchange for cash was innovation, including electric vehicles (EVs), lower fuel consumption, and smaller vehicles. 

One such company that would benefit from this industry impasse was Tesla, which was close to shuttering the operation amid the 2009 auto crisis. Conveniently enough, the incoming U.S. president was keen on both a green energy economy and executing the auto bailout. These two circumstances collided, and in 2010, Tesla took a $465M federal loan to design and mass-produce electric vehicles (EVs).

Moving Forward

Fast forward a decade, this global proliferation of EVs has transformed the auto sector while creating growth in new supplier subcommunities—such as semiconductors. Conventional vehicles require an average value of $350 of semiconductor materials, whereas hybrid and fully electric vehicles will contain significantly more—between $1000 and $3500. While a modest percentage of total cost, these auto semiconductors come in a wide variety of specialized use cases (e.g., autonomous driver tech, sophisticated entertainment centers, and simple technologies for windows and seat movement).

A New Set of Roadblocks

Demand for chips dramatically increased in the automotive industry between 2010 and 2019. However, when Covid-19 ravaged the globe in 2020, auto manufacturers expected slow sales and scaled back in their demand. As a result, chip manufacturers naturally scaled back production of “mature” chips and pivoted to producing more technologically advanced “emerging” chips to support the rise of 5G and its associated electronic devices. As the automotive sector recovered from the COVID-19 pandemic, they saw a returned increase in demand. Unfortunately, manufacturers’ switch to more progressive chips meant that the automotive industry would now face significant shortages when they needed materials most.   

With mobility constraints caused by the pandemic, the global chip shortage persists. This is all in the face of accelerated demand for EVs, conventional auto, and all forms of personal computing and electronic devices. It’s important to emphasize that the impact on auto manufacturers is disproportionately high. Considering that lead times for chips have continuously increased over the last few quarters, producers must prioritize consumption by sector and revenue. Auto is low margin and low volume for semiconductor sales—less than 10% of a $542B market. 

Where We Are We Now

Disruption of the auto industry in 2021 is real and palpable—with no sign of relief or improvement coming anytime soon. While some companies, such as Toyota, appear more resilient to chip shortages and other forms of market volatility, twenty manufacturing plants across North America and Europe have been shuttered and/or sit idle. Overall and globally, four million fewer vehicles will be produced this year than initially projected, and direct manufacturing companies stand to lose $110B in sales.

What to Expect Next

In the months to come, we should expect government bodies to inject stimulus funds, chip production to increase, and new fabrication plants to be constructed. These actions will mitigate the next crisis, but it will not alleviate this one, as it requires up to $20B in capital and five years to construct a new semiconductor foundry. 

For those looking to maintain a competitive advantage while they weather the storm, investing in cognitive supply platforms that harmonize your view of enterprise information is key. Having the insights needed to both anticipate and quickly react to market shifts ensures enterprises have the opportunity to gather the right supply and ensure revenue attainment.

The LevaData Platform offers much-needed visibility into potential obstacles and risks by leveraging relevant external insights across multiple tiers of your supply chain. Learn more about LevaData’s revolutionary, AI-driven platform and what it will do to help your organization mitigate supply chain risks like those happening in the auto industry today.

Post by: Scott Morgan

August 3, 2021

Semiconductor Lead Time Updates: What You Need to Know Moving Into Q3

Several weeks ago, we offered some key insights into how the recent semiconductor shortage was impacting lead times for supply chains across the boards. The good news is that we’re now equipped with additional information to provide updated predictions. The bad news, unfortunately, is that the lead times haven’t gotten any better. In fact, they’ve gotten worse. Here’s everything you need to know to try and maintain a competitive advantage.

Semiconductor Lead Time Updates

The Updates

In the last seven months, since the beginning of Q1 and as we enter into Q3, the average lead times for some of the semiconductors we’ve been tracking have roughly doubled.

As a result, some semiconductor suppliers are now asking customers for 18-month non-cancelable / non-returnable purchase orders to assure supply. These requests, while unprecedented, are connected to the race for assuring long-term semiconductor availability. Various news reports confirm this fact, stating that semiconductor companies are locking in foundry capacity with longer term commitments than ever before to ensure they get their "fair share" of future supply. In one example, Digitimes reported, “UMC has plans to invest vast sums to expand a 12-inch fab site in southern Taiwan, and eight of the foundry's major clients have already reserved parts of the additional capacity for a six-year period.

As we already know, the lead-time increases were driven by a number of exogenous factors, exacerbated or even driven by the COVID-19 pandemic. And with further unplanned shutdowns in various regions likely to continue impacting supply, reversals of these lead-time increases are unlikely anytime soon. And with recent news reports stating that Apple is increasing their production of the iPhone by up to 20% from the prior year, we can expect further strain on the current IC supply through the remainder of 2021.

Maintaining a Competitive Advantage

As we’ve previously mentioned, there are two key requirements you need to satisfy to stay ahead of the game and protect your supply chain. The first is accessing and utilizing reliable, up-to-date analytics on lead time averages and insights. The second is investing in a reputable, always-on risk navigation platform. LevaData’s Supply Risk Navigator software does just that, offering companies the visibility and recommendations needed to safeguard their supply chains and maintain agility. Connect with us today to learn more about our revolutionary, AI-driven platform and what we can do to help you manage these risks and more.

June 22, 2021

Dirty Data – A Stop on the Journey, Not the Destination

It’s no secret how important it is for organizations to have access to accurate, up-to-date data. Analytics play a crucial role in all aspects of sourcing and procurement management—especially risk mitigation, new product introduction, and cost optimization. Unfortunately, inconsistent, incomplete, or inaccurate data—otherwise known as dirty data—can mar all these efforts entirely. 

The solution? Data cleansing via artificial intelligence. This tried-and-true practice allows organizations to weed out the vulnerabilities in their data sets to ensure more accurate insights.

It’s fair to say that this process is a must-have component for any supply chain to not just survive, but also thrive. But is data cleansing the destination? Or is it simply one part of a more involved journey all organizations need to take to ensure true success and risk avoidance?

The answer might surprise you.

Why Is Dirty Data Such an Issue?

Simply put, when you rely on data that hasn’t been through a rigorous, competent cleansing process, your organization becomes vulnerable. These data sets are often then laden with inaccuracies and outdated figures. The so-called “dirtiness” of it all may be the result of any number of complications. Sometimes, it’s as simple as human error. Other times, it’s due to contract manufacturers making concerted efforts to disguise their data and muddle the market comparison process. Most of the time, though, data is “dirty” simply because it originates from various back-end systems that, by default, don’t allow for cross-platform comparisons. 

In any case, when you base your sourcing, procurement, and spend strategies on dirty data, you’re far more likely to make improperly informed, ineffective decisions. And while it’s difficult to know just how severe the results of these decisions may be, one thing is certain: they’re almost always costly. According to a 2018 study from Gartner, organizations, on average, lose $15 million each year due to dirty data. A separate study conducted by IBM also discovered that in the United States alone, businesses spent $3.1 trillion each year rectifying issues caused by poor-quality data. And with the market as competitive as it is, more organizations simply don’t have that kind of money to lose; especially on problems that could otherwise be avoided. 

Where Does AI Come In?

As previously mentioned, data cleansing is an effective solution to this issue. The problem with utilizing this method, though, has been that although the idea is simple, the execution is often far from it.

Manually cleaning data is a complex and time-consuming process; it’s also incredibly expensive. And, unfortunately, traditional means of data cleansing have proven to be ineffective, with the accuracy of the results difficult to gauge. While the resulting insights are typically far less egregious than those provided by data that hasn’t been cleaned at all, it begs the question: if the process doesn’t guarantee reliable results, what is the point of all that time, effort, and money being spent? 

AI technology sidesteps all of these problems. Once the system is introduced to your organization’s existing data sets, it uses a combination of supervised and unsupervised learning models, fuzzy search, web-crawlers, and robotic processes. It also conducts daily ingestions of millions of entities across several data dimensions.

The AI approach frees data from its silo, allowing organizations to move toward a comprehensive perspective of the entire supply chain network. This doesn’t just ensure more accurate results—it also shortens the insights-to-action process, cutting the time spent working toward reliable data sets from months to weeks or even days.

Why Stop There?

It’s easy to see the value in accessing clean, accurate data, as well as the value of an AI-driven solution. However, it’s important to note that these artifacts won’t make any difference if they don’t provide a more holistic view of the competitive market—and if you don’t know what to do with them.

For this reason, LevaData encourages organizations to view data cleansing as one stop on a more involved journey toward true supply chain management success, rather than the destination. 

Once a third-party solution has cleaned your data and turned over the improved sets, the rest is on you. At this point, your organization will be responsible for harmonizing and cross-referencing this information against the market to (hopefully) garner a more accurate representation of where your opportunities, risks, successes, and failures lie.

Then there’s the matter of knowing what to do with this data. Interpreting this information and turning it into an actionable plan is a complex task, and there’s no way of knowing that your organization’s conclusions will render the best results.

Unfortunately, third-party solutions that focus solely on cleaning dirty data tend to render a disjointed path. To mitigate the complexities of this siloed approach, it’s ideal to invest in a solution that carries you through all the way to the end.

Rely on LevaData to Get You There

With the LevaData platform, you can rest assured you’ll not only receive clean, harmonized data; you’ll also be given prescriptive, predictive insights and a clear call to action. Our technology handles the entire journey to streamline the spend analysis process for supply chain managers and ensure complete oversight and management of the data handling process. As a result, your organization will mitigate the risks otherwise brought on by misinterpreting data or missing out on opportunities provided through a holistic market comparison.

To discover what LevaData’s platform can do to strengthen and streamline your journey toward complete supply management, contact us today

June 17, 2021

Actionize Your Insights With Supply Risk Navigator™

It’s no secret that today’s climate is unpredictable, ever-changing, and, at times, volatile. With so much upheaval and uncertainty, it’s crucial to know the supply chain risks you’re up against. The problem is, too many organizations stop there. To truly ensure both short- and long-term success, you need to go a step further. Or rather, three steps further: 

  1. Analyze and understand how these risks impact your portfolio.
  2. Transform these insights into a plan of attack.
  3. Act on your findings with confidence.

Unfortunately, most organizations get stuck on step one. Accessing data is one thing; knowing how to analyze and transform that information into a step-by-step, prescriptive process is another. 

What’s the Best Way to Navigate Supply Chain Risks?

To rectify this issue, LevaData built Supply Risk Navigator, a revolutionary solution found within the LevaData platform that transforms the way enterprises identify, assess, and act on risks and obstacles. This AI-powered technology goes above and beyond to generate clear, predictive insights with prescriptive engagements designed to help foster speedy, determined, misstep-free plans. 

LevaData’s tailored analyses comprise facts and figures from numerous data sources, many of which are collected from our one-of-a-kind community of buyers and sellers. The system utilizes AI-driven algorithms to dissect marketplace activity and identify changes in demand, lead time, and other parameters. 

From building scenarios with contract manufacturers to acting with existing supply chain partners based on contextual data, LevaData’s Supply Risk Navigator solution provides the support and confidence needed to ax analysis paralysis and handle today’s challenges – and tomorrow’s, too. 

How Supply Risk Navigator Differs From Other Risk Systems

The prime differentiator in LevaData’s Supply Risk Navigator solution is the multivariable risk view. This approach allows organizations to see projections for future risks and take the necessary steps to mitigate these obstacles. Beyond that, the insights teach users how to turn risks into advantages with lowered costs, minimized impacts to lead time, and being the “customer of choice” to suppliers by being the first to act with them on a strategy.

LevaData’s Integrated Cost Risk solution also ensures complete efficiency and data accuracy. This powerful solution interprets potential risk and event impacts on business’ parts, portfolios, and sales while consolidating multiple sources of non-harmonized data to provide a complete, holistic overview of all pertinent information.

How LevaData Ensures Top-Quality Data

Supply Risk Navigator accelerates the data ingestion process by allowing organizations to leverage numerous interfaces, including flat files, SFTPs, and APIs. Throughout that ingestion process, LevaData works with organizations and platform users to determine set business rules and data profiles that match your operation. From there, LevaData uses a series of AI and ML algorithms to normalize, harmonize, and anonymize your data, so it’s clean and ready to be actionized. 

Demystify Your Data With Supply Risk Navigator

No organization is immune to risks or obstacles. But with the right solutions, you can maintain a competitive advantage when problems do arise; with predictive insights and reliable recommendations, your organization can remain agile and ahead of the curve. With Supply Risk Navigator, you’ll have everything needed to review, analyze, and act on the most comprehensive data and maintain complete supply chain resilience. 

Discover what LevaData’s revolutionary solutions can do to help you mitigate risks by scheduling a demo today

June 10, 2021

Unpacking Wafer Price Increases From Leading Foundries

Recently, the industry’s largest pure-play foundries have been announcing wafer price increases for all their major production nodes. This represents a shift from previous pricing practices, and the resulting impact on fabless semi companies is in turn, driving them to pass those increases on to their customers. Organizations ought to heed these current and future changes to identify the results on their supply chains.

The Plays From the Leaders

TSMC announced several months ago a record $100B investment over the next three years to expand wafer capacity. UMC, Samsung, and Global are making the same play, albeit less extensively. Further digging suggests that much of that TSMC capacity expansion will be geared toward their advanced nodes (7,5,4,3nm); this is also where most of the other foundries are investing. A number of the foundries are also asking key customers to help fund the expansion in return for commitments on future capacity.

Roughly $24 billion from TSMC's 2021 capital budget is set to be spent on expanding capacities for advanced technologies, including 3nm, 4nm/5nm, and 6nm/7nm. Analysts from China Renaissance Securities have predicted that the majority of these funds will be used to expand TSMC's N5 capacity; they estimate anywhere from 110,000 to 120,000 wafer starts per month (WSPM) by the end of 2021. Meanwhile, TSMC has announced that 10% of its CapEx will go to advanced packaging and masking; an additional 10% will be allocated toward specialty technologies.

All of this additional investment, as well as the simple supply/demand imbalance currently in the market, is leading Foundries across the board to raise their prices across almost all of the nodes. Digitimes recently reported another round of increases from UMC, Vanguard, etc. for Q3, with TSMC canceling any discounts.

What These Increases Mean for Your Supply Chain

Anecdotally, we’re seeing many semiconductor-design companies pass 15+% price increases to most organizations. Some of those increases are being added to MPN pricing; others are coming as "expedite" fees. A few customers have been able to leverage business awards with their EMS/ODM partners in order to mitigate the majority of those increases in Q2; however, almost all have very real, substantiated concerns about the impact of these increases on their Q3 costs. 

The most disconcerting factor, by far, is that some semiconductor suppliers seem to be coming back to their customers multiple times for wafer price increases; these actions seem to reflect a certain lack of control on their supply chain pricing/costs.

One way to protect any long-term damage to your organization’s cost optimization efforts is to establish an agreement with suppliers that outlines parameters around limiting any additional increases for the remainder of 2021. While it’s entirely possible the market could turn again and soften, most projections are that this will not occur until mid-2022 at the earliest. Being aware of this is crucial to enable price renegotiation when possible.

LevaData’s Cognitive Supply Platform can provide even more insight into what your organization can do to stay ahead of competitive, unforeseen pricing changes.

May 14, 2021

Utilizing eBenchmark™ to Drive Supply Chain Cost Optimization

Recognizing and capitalizing on savings opportunities is always important for organizations looking to safeguard their supply chains. But in today’s climate, with instability and market competitiveness at an all-time high, uncovering and locking in discounts from your sourcing spend is more than a nice-to-have – it’s crucial for long-term survival.

More often than not, the potential for overspending on investments is primarily due to a lack of insight, evidence, and, most importantly, actionable advice. LevaData understands that although cost optimization is a top priority for organizations, actualizing that goal isn’t always easy. That’s where eBenchmark comes in.

What Is eBenchmark™?

eBenchmark is a one-of-a-kind, transformative capability available through LevaData’s AI-driven Cost Optimizer platform. It uses “common sense calculation” to anonymize, identify, and present the lowest distributor prices available compared to the MPN prices set by suppliers. The result is a seamless model for comparison to see how competitive (if at all) your current pricing is.

eBenchmark also helps foster normalized percentage discounts, so you can easily compare all available price points to inform spending decisions. This, in turn, creates a contextual market attainability cost perspective upon which you can base your organization’s sourcing strategy. Furthermore, eBenchmark™ provides users with direct links to distributors with the best price and can inform customers of any available stock for parts that are becoming difficult to source.

How Does eBenchmark™ Benefit Your Business?

Negotiating with suppliers can be an arduous task. Researching market trends, validating the competitiveness of prices, negotiating discounts, and locking in rates takes time, energy, and manpower – all of which can stall the forward-moving momentum and scalability of your supply chain. Beyond that, there’s always the risk that the market data you use to inform your decisions isn’t providing an accurate, holistic scope of pricing trends and savings opportunities.

eBenchmark streamlines this process by providing the analytics and recommendations needed to inform spending decisions. By quickly informing customers when and where better pricing or more competitive discounts are available, organizations can fast-track cost optimization efforts.

Armed with accurate, relevant information, you can decide between renegotiating pricing with your suppliers or taking your business elsewhere. Regardless of which course is best for your organization, you’ll have peace of mind and confidence knowing you’re capitalizing on the best prices possible.

Streamline Your Path to Optimal Cost Optimization

With market conditions and trends constantly changing, understanding where your current rates stand compared to your peers can seem overwhelming. LevaData’s eBenchmark™ and Cost Optimizer platform take the complexity and stress out of discount discovery, so you can capitalize on savings opportunities and securely increase your profit margins.

Reach out today to discover how LevaData’s revolutionary, AI-powered solutions will help your organization achieve optimal cost optimization today.

April 30, 2021

Harnessing the Power of WillCost™ to Accelerate NPI

Traditionally, new product introduction teams have relied on a detailed, bottom-up “should-cost” analysis to generate an estimate for the specification, construction, composition, and manufacturing requirements for a new product design. These teams would then use this estimate as a target for negotiations with potential suppliers and contract manufacturers. While this is a valuable strategy, the savviest negotiators augment such estimates with a top-down, outside-in analysis and fresh insights about the market factors. This allows them to change the game altogether. 

LevaData’s New Product Accelerator (NPA) platform was designed with a simple goal in mind: help organizations identify and act on sourcing savings opportunities and risks to streamline and accelerate new product introduction. One effective way to do that is through LevaData’s WillCost™.

What is LevaData’s WillCost™?

WillCost™ is a powerful capability found within the New Product Accelerator platform. It collects and analyzes real-time data to determine what the market is actually paying for the same investments as your organization. The AI platform utilizes community-based analytics and third-party data to provide an in-depth evaluation into which opportunities are available–and worth pursuing. It also unveils what kinds of prices the community has managed to lock in for the future.

The Value of WillCost™

With the current market as volatile and competitive as it is, it’s getting more difficult for organizations to identify and act on savings opportunities from their direct material spend. New Product Accelerator alleviates this pain point by constantly searching for savings and risk mitigation opportunities through AI and predictive tools. 

This machine-learning technology provides organizations with two key value points. First, it mitigates countless workforce hours lost searching for valuable data to inform spending decisions by providing all the crucial insights in one cohesive, easy-to-navigate platform. Second, by leveraging actual market data to garner accurate cost indications, your organization will have the confidence–and evidence–to renegotiate your spending with suppliers and unlock better prices successfully.

Capitalize on Accelerated NPI Now

For far too long, organizations have struggled to optimize the balance between cost savings and risk mitigation. In reality, though, achieving this balance is far less complex than you might have believed. With LevaData’s New Product Accelerator platform and WillCost™ capability, you’ll quickly and efficiently move toward complete spend transformations with the confidence you’ll achieve accurate, honest, and fair results.

Find out more about how LevaData’s AI-powered, community-driven technology can help you uncover and act on saving opportunities to accelerate your NPI processes by scheduling a demo now

April 21, 2021

How the Semiconductor Shortage Increases Lead Time & Generates Supply Chain Risks

Since the beginning of 2021, the discrepancy between the increasing demand for semiconductors and the lack of available supply has become a worldwide news event. In fact, semiconductor shortages have been reported across almost all major IC groups. While the most obvious impact has been within the automotive industry (the lack of critical semiconductors led to shutdowns of auto factories for all the major manufacturers), the shortage has undoubtedly generated supply chain risks across the board.

The Cause Behind the Shortage

Numerous factors played a role in straining the semiconductor ecosystem, all the way from foundry to backend OSAT capacity. Some of the most notable include:

  • Increase in consumer purchases of digital devices during the COVID shutdown to enhance connection and productivity
  • Accelerated build-outs of data centers
  • 5G handset and infrastructure investments
  • Exponential demand for cyber currency mining hardware

These factors all drove increased overall demand for a wide range of semiconductors, from microprocessors and power management ICs to memory controllers and various logic ICs. In addition, factory disruptions and US-China trade tensions exacerbated an already tight supply situation.

What This Means for Your Organization

With this backdrop in mind, LevaData analyzed the changes in lead times for the main semiconductor groupings. From January to April of 2021, semiconductor IC lead times increased 75% on average. For some of the more in-demand components, those increases have been even more dramatic:

  • Programmable logic: 12 to 33 weeks (175% increase)
  • Microcontrollers: 16 to 44 weeks (175% increase)
  • Network interface ICs: 12 to 40 weeks (233% increase)
  • Serial IO controllers: 9.5 to 39 weeks (311% increase)
Semiconductor lead times

In some instances, customers saw their lead times increase to 52+ weeks. In such cases, any new order for components will take a year or more to deliver. Given that most companies struggle to forecast more than six months out, this creates significant supply chain risks, putting a massive strain on revenue visibility and attainment.

Although LevaData believes such actions on behalf of semiconductor companies are a slight overreaction to the current supply/demand frenzy, all indications point toward a tight supply over the next nine to 12 months – at least until Q2’22 – while the industry works to expand capacity [ Update: What You Need to Know Moving Into Q3 ].

However, there are also indications that many customers are building larger component inventories than they have previously maintained. This could lead to some semiconductor supply corrections due to double-ordering and overbooking. In the meantime, robust planning, supply risk assessments, proactive order management, and real-time insights regarding supply trends are essential for any procurement team to stay ahead of a very competitive game.

What Your Organization Can Do to Stay Ahead

Companies that invest in supply chain analytics and visibility platforms are better positioned to react to market shifts and predict future market movements. This enables them to gather the right supply at the right time to ensure revenue attainment.

LevaData’s Supply Risk Navigator platform provides visibility into potential risks and obstacles by using community-based analytics and real-time market data. By offering clear, prescriptive, and predictive insights, your organization will remain nimble, adaptable, and, most importantly, successful. Find out more about how LevaData’s revolutionary, AI-driven platform will help you mitigate supply chain risks and keep your operations moving forward today.

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