The Price Of Domestic Just In Time Manufacturing

Hardware is hard, manufacturing only happens in China, accurate pricing is a dark art. Facts which are Known To Be True. And all things which can be hard to conquer as an independent hardware company, especially if you want to subvert the tropes. You may have heard of [Spencer Wright] via his superb mailing list The Prepared, but he has also been selling an unusual FM radio as Centerline Labs for a few years. Two years ago they relaunched their product, and last year the price was bumped up by a third. Why? Well, the answer involves more than just a hand wave about tariffs.

The Public Radio is a single-station FM radio in a mason jar. It’s a seemingly simple single purpose hardware product. No big mechanical assemblies, no complex packaging, not even any tangential accessories to include. In some sense it’s an archetypically atomic hardware product. So what changed? A normal product is manufactured in bulk, tested and packaged, then stored in a warehouse ready to ship. But TPR is factory programmed to a specific radio station, so unless Centerline wanted one SKU for each possible radio station (there are 300) this doesn’t work. The solution was domestic (US) just in time manufacturing. When a customer hits the buy button, a unit is programmed, tested, packed, and shipped.

As with any business, there is a lot more to things than that! The post gives the reader a fascinating look at all the math related to Centerline Labs’ pricing and expenses; in other words, what makes the business tick (or not) including discussion of the pricing tradeoffs between manufacturing different components in Asia. I won’t spoil the logical path that led to the pricing change, go check out the post for more detail on every part. 

We love hearing about the cottage hardware world. Got any stories? Drop them in the comments!

Ask Hackaday: How’s That Capacitor Shortage Going?

There is a looming spectre of doom hovering over the world of electronics manufacturing. It’s getting hard to find parts, and the parts you can find are expensive. No, it doesn’t have anything to with the tariffs enacted by the United States against Chinese goods this last summer. This is a problem that doesn’t have an easy scapegoat. This is a problem that strikes at the heart of any economic system. This is the capacitor and resistor shortage.

When we first reported on the possibility of a global shortage of chip capacitors and resistors, things were for the time being, okay. Yes, major manufacturers were saying they were spinning down production lines until it was profitable to start them up again, but there was relief: parts were in stock, and they didn’t cost that much more.

Now, it’s a different story. We’re in the Great Capacitor Shortage of 2018, and we don’t know when it’s going to get any better. Continue reading “Ask Hackaday: How’s That Capacitor Shortage Going?”

Global Resistor Shortage, Economics, And Consumer Behavior

The passive component industry — the manufacturers who make the boring but vital resistors, capacitors, and diodes found in every single electronic device — is on the cusp of a shortage. You’ll always be able to buy a 220 Ω, 0805 resistor, but instead of buying two for a penny like you can today, you may only get one in the very near future.

Yageo, one of the largest manufacturers of surface mount (SMD) resistors and multilayer ceramic capacitors, announced in December they were not taking new chip resistor orders. Yageo was cutting production of cheap chip resistors to focus on higher-margin niche-market components for automotive, IoT, and other industrial uses, as reported by Digitimes. Earlier this month, Yaego resumed taking orders for chip resistors, but with 15-20% higher quotes (article behind paywall, try clicking through via this Tweet).

As a result, there are rumors of runs on passive components at the Shenzhen electronics market, and several tweets from members of the electronics community have said the price of some components have doubled. Because every electronic device uses these ‘jellybean’ parts, a decrease in supply or increase in price means some products won’t ship on time, margins will be lower, or prices on the newest electronic gadget will increase.

The question remains: are we on the brink of a resistor shortage, and what are the implications of manufacturers that don’t have the parts they need?

Continue reading “Global Resistor Shortage, Economics, And Consumer Behavior”