June 2021

NEWS n 5 www.drivesncontrols.com June 2021 Control Techniques tackles component lead times of up to 2 years THEWELSH DRIVES-MAKER, Nidec Control Techniques, claims to be coping better than some rivals with a series of problems that are affecting manufacturers around the world, including shortages of critical electronic components, soaring materials costs, and severe supply-chain disruptions. Steve Brooks, CT’s director of global operations finance and procurement, says that together these problems are creating “the most challenging supply chain event of my career”. Perhaps the best-known issue is the global shortage of electronic components resulting from a combination of factors, including the fact that production was disrupted and cut back when the pandemic arrived, and semiconductor producers are now struggling to catch up with demand that has rebounded faster than they had expected. The result, according to Brooks, is that some components that were previously on 16-week lead times are now on 32 weeks, and some semiconductor manufacturers are asking for orders to be placed two years in advance. The second problem is the soaring prices of many critical commodities. This has affected materials including steel, plastics, copper, aluminium and even cardboard. “There a big supply-demand mismatch,” Brooks reports. The third headache is the disruption to global supply chains, which was exacerbated by the recent blockage of the Suez Canal. Transport by both sea and air is affected, with the massive reduction in scheduled airline flights affecting freight capacities and prices. At sea, “we are fighting for capacity,” Brooks reports, with containers often being in the wrong places. “It is difficult to book containers and prices have more than doubled,” he explains. “Transit times that were previously six weeks, are now 12 weeks – but are unpredictable and can be 10-15 weeks. We don’t know from one week to the next which containers are going to arrive.” A complicating factor has been Brexit, which CT president Tony Pickering describes as “a frustration in an already problematic world”. For example, German customs authorities are now demanding that documentation is produced in German. Previously, they were happy with English documents. Gareth Jones, Control Techniques’ regional director for the UK and Ireland, describes the current drives market as “scary”, with some manufacturers quoting delivery dates in 2022. CT, he reports, is quoting four- to-six week delivery times for most products, with some “spotty interruptions”. According to Steve Brooks, CT is managing to maintain supplies by “pulling every lever that we can”. This is based on having had “a robust supply chain and procurement process, and a good relationship with suppliers” in place before the pandemic. “We’ve been nimble and managed to plug the gaps,” he adds. For example, the company has reduced the qualifying period for new components such as processors from six months before the pandemic, to as short as three to four weeks now. Control Techniques has also brought back production of its Commander drives from China to Wales, and changed to a more readily available processor, allowing it to maintain three-to-four week lead times. The company is also holding more buffer stocks than it did before. Its global network of 45 Drives Centres hold “a wealth of stock” locally, according to Pickering. He reports that CT has had to pass on some of the cost increases, but has kept these to less than 4%, while some rivals have put up their prices by more. “We’ve worked hard to limit the impact on customers. We‘ve absorbed a lot through improvements in productivity,” he says, citing an investment of more than $20m in new surface-mounting lines and other production facilities as an example of how CT has been working to improve its efficiency. Pickering says that Control Techniques recruited 40-50 people during the pandemic and has implemented some restructuring of middle management roles. The company is gearing up to launch a new range – the Commander S – and is taking pre-orders for deliveries that are due to start in October. Pickering expects a slow recovery to continue for the rest of this year, reaching “somewhere near normality” by the first quarter of 2022. “There are four to six months of pain to go through while the market starts to recover.” “We’re still not out of the woods,” Pickering cautions. “It’s a tough world. We’re bucking the trend, but it’s a daily battle.” Pickering: Four to six months of pain still to go through “We’re still not out of the woods. It’s a tough world. We’re bucking the trend, but it’s a daily battle.”