[00:00:00] Justin Sears: another stat from Octopart’s annual survey 2025, when we ask engineers what drives their choice of a part family for their design 59% put supply availability and lead time as the most important factor, and that was the top response.
[00:00:17] Justin Sears: So it’s gone right up to the top of everybody’s consideration set. this confirms for me that supply is now a new design input, not an afterthought.
[00:00:43] Scott W. Luton: Hey, good morning, good afternoon, good evening, wherever you may be. It’s Scott Luton and Supply Chain Hall of Famer, Jake Barr, with you here on Supply Chain Now. Welcome Jake, how you doing today, my
[00:00:53] Scott W. Luton: friend?
[00:00:54] Jake Barr: I am suffering from the Reds dropping one in
[00:00:57] Jake Barr: late innings to your Braves last night
[00:01:00] Scott W. Luton: Hey, I loved it. Not to pour some salt in your wounds, but we got playoff baseball coming up soon, and it’s gonna be interesting to see. But equally as interesting is today’s topic,
[00:01:11] Scott W. Luton: folks. Uh, today we’re diving into a challenge that’s only getting tougher and tougher for electronics
[00:01:16] Scott W. Luton: manufacturers. Hey, how do you design
[00:01:18] Scott W. Luton: products for a world where the component you need
[00:01:21] Scott W. Luton: tomorrow might not be available?
[00:01:23] Scott W. Luton: We’re gonna be talking about some of the, uh, how some of the usual suspects, such as geopolitical conflict,
[00:01:28] Scott W. Luton: tariffs, trade restrictions, you name it, how all those factors are changing the risk equation. We’re gonna be, uh, answering the question of why supply chain thinking and collaboration needs to move much
[00:01:39] Scott W. Luton: more upstream, and how engineering, procurement, and supply chain teams can work together much more effectively.
[00:01:46] Scott W. Luton: All that and much, much more. And Jake, now look, I know you’ve just about seen it all, you know, given all your leadership in global supply chain at one of the world’s most successful companies, but I’m looking forward to your take here today. You ready to go?
[00:01:59] Jake Barr: I am. These guys are the real deal. They’re bringing it when you talk about the innovation side of bringing together the upstream component
[00:02:08] Scott W. Luton: Love it. That’s high praise
[00:02:09] Scott W. Luton: from the one and only John Wayne of global supply chain. So folks, let’s get to work and welcome in yet another old friend and industry leader. Uh, our guest is a seasoned business leader that’s helped global companies successfully create all sorts of new things for over 25 years.
[00:02:24] Scott W. Luton: He’s been on a mission to help organizations optimize their workflows, automate their processes, and leverage data and AI to achieve their goals. Want to welcome in Justin Sears, Head of Product Marketing for
[00:02:35] Scott W. Luton: SaaS with Altium. Hey, hey, Justin. How you doing, my friend?
[00:02:40] Justin Sears: Hey, I’m doing well. Good morning, Scott. Good to see you again. Jake, good to meet you
[00:02:45] Scott W. Luton: Well, did you happen– Before I ask you my fun warm-up question, Justin, did you happen to hear
[00:02:50] Scott W. Luton: what Jake just shared? I mean, he doesn’t give that out like candy. That was some high praise,
[00:02:55] Scott W. Luton: Justin
[00:02:56] Justin Sears: I w- I very much appreciate it. And Jake, I know you, you’ve seen lots of supply chains, so, uh, I’m very honored. Uh,
[00:03:03] Justin Sears: and
[00:03:03] Justin Sears: on behalf
[00:03:04] Justin Sears: of Altium, thank you for that high praise
[00:03:07] Jake Barr: Hey, Justin
[00:03:08] Jake Barr: it’s well earned, man. You got to understand. Look, the–
[00:03:11] Jake Barr: I’ve traveled the
[00:03:12] Jake Barr: world on supply chain complexity, that you are numero uno. This vertical is numero uno
[00:03:20] Jake Barr: on supply chain complexity
[00:03:22] Scott W. Luton: I love it. All right. Uh, so that’s gonna set the stage quick, uh, uh, very effectively.
[00:03:27] Scott W. Luton: But first, before we get into all the different ways that Justin and all team is doing
[00:03:31] Scott W. Luton: that, folks, a little fun warm-up question, ’cause today is
[00:03:34] Scott W. Luton: many, many things. Get this. It’s Heritage Day in South Africa, which is a beautiful holiday.
[00:03:39] Scott W. Luton: It’s World Quantum Readiness Day. We need that every day of the week, I think. It is Bluebird of Happiness Day. You know I’m
[00:03:46] Scott W. Luton: a blue, uh, bird nerd, folks. I love, love my bluebirds. But it’s also, Justin and Jake, Energize
[00:03:52] Scott W. Luton: Day, and that’s spelled with a I-N-E-E-R. Now, I found this out
[00:03:56] Scott W. Luton: today. It’s an annual day right after the autumnal equinex.
[00:04:01] Scott W. Luton: I hope I said that right. Equinox. I hope I said that
[00:04:03] Scott W. Luton: right. I didn’t, I know. And it focuses on
[00:04:06] Scott W. Luton: self-care activities. So Justin, with that in mind, what is one activity that you enjoy that’s a bit in the form
[00:04:14] Scott W. Luton: of chicken noodle soup for the soul? Justin, tell us more
[00:04:18] Justin Sears: Well, this one’s easy. I don’t have to think about this too long, Scott. Uh, I’m a lifelong runner and, um, for me, um, if I’m up too much in my head or things, you know, the day-to-day is getting me down, I get out on the road and do some miles, and it’s really my form of meditation. So it’s good, good for the body, but also, um, really helps clear
[00:04:42] Justin Sears: my head
[00:04:43] Scott W. Luton: That’s a great answer. Uh, Jake, I wish I would get the runner’s high that some folks get. I’ve never gotten that. Jake, have you ever gotten the runner’s
[00:04:51] Scott W. Luton: high?
[00:04:52] Jake Barr: I’ve never cut in the rudder side absolutely ever.
[00:04:56] Scott W. Luton: We’re gonna have to get some lessons from
[00:04:58] Scott W. Luton: Justin.
[00:04:58] Jake Barr: no. stick me on stick me on a John Deere and let me go to, to work on, uh, 10 acres of mowing, uh, I’m in heaven
[00:05:08] Scott W. Luton: I like that.
[00:05:09] Justin Sears: Well, Jake, you get on your John Deere and I’ll
[00:05:10] Justin Sears: follow on behind on
[00:05:12] Justin Sears: foot and we’ll, uh, we’ll cover some ground together.
[00:05:15] Jake Barr: Safety issue, Justin.
[00:05:16] Justin Sears: yeah, that’s
[00:05:17] Justin Sears: true.
[00:05:18] Scott W. Luton: okay. So Justin and Jake, we got a lot to get into here today. And Justin, for those folks that have missed some of your great previous appearances here on Supply Chain Now, like our new audience members, I’d love to start with getting you to tell us a little bit more
[00:05:32] Scott W. Luton: about yourself and Altium
[00:05:34] Justin Sears: Thank you so much, and thanks for having me back, Scott. Um, I lead product marketing and go-to-market strategy for Altium Agile Teams. Uh, I’ll tell a little bit more about Altium in a second. Um, Altium Agile Teams is our software solution for mid-sized hardware companies who’ve outgrown the spreadsheets, emails, sticky notes, all the ways that smaller companies try to manage their hardware development process. And of course, part of that hardware development process is procuring parts. Um, we take the companies from that early stage, ad hoc, kind of slap it all together, to a more structured
[00:06:14] Justin Sears: platform for managing that entire process end to end. I personally,
[00:06:19] Justin Sears: uh, have worked in
[00:06:20] Justin Sears: product
[00:06:20] Justin Sears: marketing of enterprise software, as you mentioned in the intro, focusing
[00:06:26] Justin Sears: more on things like data analytics, workflow automation.
[00:06:29] Justin Sears: Since the year 2000, I’ve been at seven venture-backed
[00:06:32] Justin Sears: startups, some of
[00:06:33] Justin Sears: which have gone very
[00:06:34] Justin Sears: well and some which haven’t, and as well as a few bigger public companies
[00:06:38] Justin Sears: like Altium. So at Altium, I see my
[00:06:41] Justin Sears: role as
[00:06:42] Justin Sears: leading the team to position our best-in-breed software to help our customers create best-in-breed
[00:06:48] Justin Sears: hardware.
[00:06:49] Justin Sears: So it is software for hardware, and this is exciting especially
[00:06:54] Justin Sears: now because although the electronic hardware industry
[00:06:57] Justin Sears: is really pushing the
[00:06:59] Justin Sears: scientific and, technological frontiers, you can see the cutting-edge, uh, products in
[00:07:05] Justin Sears: industries like aerospace, medical device,
[00:07:08] Justin Sears: automotive. Um, they’re creating very
[00:07:11] Justin Sears: exciting new
[00:07:12] Justin Sears: things, but many of these companies at the same time have been slow to adopt new
[00:07:17] Justin Sears: software to help them improve
[00:07:19] Justin Sears: their processes. and so we offer cloud-based collaboration at Altium
[00:07:24] Justin Sears: uh, a platform to do product development work in an interdisciplinary team that includes engineers of all kinds, but also procurement teams, project managers, product owners, senior engineering leadership, everybody that needs to come together and work together often asynchronously to get great products designed and out the door. and then we integrate real-time data on the electronic component supply chain into that experience So, everybody can make decisions, um, based on the supply chain Real quick, in wrapping up the answer to this question and giving a– kind of setting the stage for this conversation, our Altium family of supply chain solutions includes, Um, Altium BOM Portal, which allows teams to see real-time component prices within their divine– design environment. Also includes Altium Sourcing to manage prices of their production BOMs after they get out of the prototype stage. Octopart is the world’s largest search engine for electronics components. And then we also include integrations with third-party component data partners like IHS Markit, which is also known as Accurays, and Circuit Expert and Z2 data So we bring all that data together into one shared workspace.
[00:08:41] Scott W. Luton: Uh, Justin, I love it. I, you know, uh, Jake, as he was walking us through, uh, a little about himself and about,
[00:08:48] Scott W. Luton: um, uh, Altium, I got hung up on he’s been a part of seven venture-backed organizations.
[00:08:55] Scott W. Luton: The pressure and the, the, how you gotta perform, Justin, I’m wait- ready for your book to come out soon. A lot of folks would love to
[00:09:02] Scott W. Luton: read your experiences there.
[00:09:04] Scott W. Luton: But that aside, Jake, when you heard of
[00:09:06] Scott W. Luton: his family, you
[00:09:07] Scott W. Luton: know, the family of, of, of organizations that all make
[00:09:10] Scott W. Luton: up Altium family, you know, one thought that came up in the
[00:09:13] Scott W. Luton: pre-show
[00:09:14] Scott W. Luton: was he focuses on best-in-breed software to help
[00:09:16] Scott W. Luton: customers make best-in-breed hardware. I
[00:09:19] Scott W. Luton: love that. What’d you hear there from Justin,
[00:09:21] Scott W. Luton: Jake?
[00:09:21] Jake Barr: Well, I, I’m gonna relate it to baseball for you,
[00:09:24] Jake Barr: because I know you,
[00:09:25] Jake Barr: you’ll get this.
[00:09:26] Jake Barr: So he d- he just… It’s the
[00:09:28] Jake Barr: Triple Crown. Okay.
[00:09:30] Jake Barr: So he just gave you a way
[00:09:31] Jake Barr: to, to, to lower your operating costs, right? Increase the efficiency, the productivity of
[00:09:38] Jake Barr: the process, and increase the overall speed to delivery to market
[00:09:42] Jake Barr: of the
[00:09:43] Jake Barr: components that you’re dealing with.
[00:09:44] Jake Barr: That’s the Triple Crown
[00:09:46] Scott W. Luton: Triple Crown. Okay, it’s like, uh, Gary Sheffield
[00:09:48] Scott W. Luton: or, uh, insert the last person to win Triple Crown. I, I can’t remember
[00:09:52] Scott W. Luton: right this minute. Maybe we’ll uncover that over the last,
[00:09:54] Scott W. Luton: next hour.
[00:09:55] Scott W. Luton: all right, so now that we know a little bit more about Justin and Altium, and we got
[00:09:58] Scott W. Luton: Jake’s baseball analogy in too, I love that. Uh, Justin, when you look acro- across the electronic supply chain
[00:10:05] Scott W. Luton: today, I don’t have
[00:10:06] Scott W. Luton: to
[00:10:07] Scott W. Luton: tell everyone, remind them, you know, the geopolitical
[00:10:09] Scott W. Luton: turmoil, tariffs, trade restrictions, all sorts of old and new
[00:10:13] Scott W. Luton: sources of friction and, and disruption.
[00:10:16] Scott W. Luton: What are the biggest component risks or
[00:10:18] Scott W. Luton: operational challenges that you see manufacturers dealing with, Justin?
[00:10:23] Justin Sears: Well, thanks Scott, and I’m, I’m glad to be back with you. I think we’re maybe a year and a half since I did my first show, and we were talking about some of these challenges when they were brand new.
[00:10:32] Justin Sears: So, um, during my first two visits, I think we talked about some of the supply side obstacles, especially tariffs and supply chain disruption from global conflict and such as war in, in the Strait of Hormuz, et cetera.
[00:10:47] Justin Sears: Unfortunately, now I come bearing a third challenge. Um, we’re still wr- wrangling with those first two challenges I just mentioned, but, um, the third challenge is more of a desi- demand side challenge that we can add to these list of structural risks facing supply chain, and that’s the build-out of AI data centers.
[00:11:09] Justin Sears: Y’all might have heard about that in news lately. Um, pause for laughter, right? Um, so what ha- what’s happening is the data center build-out a- and the boom in the generative AI processing, they’re absorbing huge amounts of semiconductors and pushing prices up across the board. Now, that doesn’t take too much imagination to figure out how that will happen, but we hear about this from our customers, and we see it in the data that we can, that we provide to our customers.
[00:11:41] Justin Sears: So Altium’s BOM management products I mentioned before, Altium BOM Portal, Octopart, Duro, which I’ll talk a little bit more about later, and Altium Sourcing. So to give you guys one data point, in the first half of this year, revenue for the semiconductor market has grown approximately 69% over the second half of 2025.
[00:12:01] Justin Sears: So that’s comparing $752 billion versus $346 billion, um, in a six-month period. So
[00:12:10] Justin Sears: it isn’t that our customers are buying more. These are the same parts, but they’re costing more because they’re in short supply. you know, E- Econ 101, in a short period of, time, uh, if, uh, if demand exceeds supply, the price will rise, And that’s what we’re seeing. Um, so, and one other data point, um, from our pr- software, products, our Octopart team surveys Octopart users, the folks that spend time on our site looking for parts,
[00:12:42] Scott W. Luton: Right
[00:12:43] Justin Sears: and in the 2025 survey, the portion of customers who come to the site to only search for parts, not purchase, um, increased by 7.5% year-over-year.
[00:12:56] Justin Sears: So this seems consistent to me with the idea that manufacturers are spending more time looking for parts due to scarcity and/or higher prices So they’re, they’re triple-clicking on that part that they need to make sure that they can really get it, and that’s driving up the number of users who are, are doing those searches.
[00:13:14] Scott W. Luton: So Justin, uh, before you continue, I gotta share a quick aside because when I
[00:13:18] Scott W. Luton: was
[00:13:19] Scott W. Luton: in the manufacturing industry way back when, when dinosaurs roamed the Earth, you know, Jake, uh, we had a hard time, and this was probably, I don’t know, 15 years
[00:13:28] Scott W. Luton: ago or so, already spending a ton of time trying to find credible new suppliers, right?
[00:13:33] Scott W. Luton: Because once you find the company name and, and what they say they specialize in, you gotta go deeper, make sure they can, you know, they know what they’re doing and they’re not just
[00:13:40] Scott W. Luton: selling stuff, right? Um, and so it seems like based on the data Justin shared, that challenge, despite
[00:13:47] Scott W. Luton: how more interconnected we’ve gotten as an industry, is still there and may have grown.
[00:13:50] Scott W. Luton: Jake, your thoughts?
[00:13:52] Jake Barr: Well, the complexity of how many parts you needed to go look for in the past was a simpler equation, and we’ve had an explosion on the shortage across a number of vectors. So what Justin’s sharing is very real. It’s, you know, he’s highlighted the semiconductors, but it, it, it expands well beyond just semiconductors in terms of the
[00:14:14] Jake Barr: shortage piece.
[00:14:15] Jake Barr: And so this puts an undue amount of stress on, even if you think, “Hey, I’ve, I’ve done my homework. I’ve got a primary and a secondary backup source for materials or components on my BOM.” But think again. You, you better go deeper, because what you think you may have them able to commit to is rapidly changing, not in a span of weeks, but now days
[00:14:40] Scott W. Luton: Yes. Well said. And Justin, I’m, I’m gonna ask you in a minute, um, about, you know, how can electronics design teams, um, act on this, this landscape we’re, we’re painting. But first, I think you had a, a study from, from a company called Digi that I think we want to reference, uh, kind of speaks to the heart of what you’re sharing
[00:14:59] Justin Sears: Yeah, and, and the Digi example, um, uh, they are a customer of, uh, our Altium Sourcing, um, solution. Um, but this gives an example– I mean, you talk about prices going up, and the next question is, okay, how does a company mitigate that cost risk? And this is a great example. Um, using software, our customers can improve their ability to foresee how high prices will impact their products, and make sure that they can respond early and often.
[00:15:32] Justin Sears: And so the Digi example, um, and, and this is, uh, through our, um, Altium Sourcing, um, offering. Digi’s strategic sourcing partner, uh, a man named Greg Snell, said that– said this about the Altium Sourcing and what it has done to his
[00:15:50] Justin Sears: ability to
[00:15:51] Justin Sears: prepare. So this is a quote from
[00:15:53] Justin Sears: the,
[00:15:53] Justin Sears: uh, from
[00:15:54] Justin Sears: the case
[00:15:54] Justin Sears: study you can read on the on the website if you if you care
[00:15:58] Justin Sears: to. “During and post-pandemic,
[00:16:01] Justin Sears: manual searches were basically impossible because of the
[00:16:05] Justin Sears: volume And opportunity cost. With Altium Sourcing,
[00:16:08] Justin Sears: we get daily part availability reports, and in a few seconds and with
[00:16:12] Justin Sears: a couple
[00:16:13] Justin Sears: of clicks, Altium Sourcing tells us what’s
[00:16:16] Justin Sears: available
[00:16:16] Justin Sears: when, from which distributors, and
[00:16:18] Justin Sears: at what price.
[00:16:20] Justin Sears: It’s been a
[00:16:20] Justin Sears: game-changer.” And that really gets to the point of what we’re trying to do with all of these Altium
[00:16:25] Justin Sears: supply chain offerings. They’re intended to give our customers that same sort of supply chain visibility,
[00:16:32] Justin Sears: so they can proactively respond to shifts in the
[00:16:34] Justin Sears: supply chain, and they can do
[00:16:35] Justin Sears: so quickly.
[00:16:37] Scott W. Luton: Uh, good stuff, Justin. And Jake, hey, manual sourcing, manual searching is almost not, uh, a viable option hardly for any organization out there. Jake,
[00:16:47] Scott W. Luton: your thoughts
[00:16:48] Jake Barr: Predictive intelligence. I mean, that’s just what Justin just rattled off for you. The ability to actually have the solution set do all the heavy lifting for you so that you actually get the benefit of it, spending the time searching the catalogs, understanding primary or backup option, the pricing differential between it, the implication on your product format, right?
[00:17:12] Jake Barr: The availability timeline, all those. That, that’s a ton of human effort
[00:17:17] Scott W. Luton: okay. So given, uh, all of the factors, right, that we’ve covered, some of the disruptions, but saw also some of the innovations out there, how can electronics design teams incorporate component supply chain risk analysis in the earliest stages of product development rather, Justin, rather than discovering sourcing problems long after the design is complete, like, like traditionally has been done?
[00:17:41] Scott W. Luton: Your thoughts
[00:17:42] Justin Sears: Yeah, and I’m gonna come back to this phrase a couple times today probably, but we tell our customers to shift left. Um, and that means let’s, let’s come back to tariff, for example, which we discussed on the last
[00:17:56] Justin Sears: podcast. Um, tariffs now affect decisions at the time
[00:18:00] Justin Sears: of initial product design. So like
[00:18:02] Justin Sears: you mentioned, Scott, before, you design your prototype, you test it,
[00:18:07] Justin Sears: you get
[00:18:07] Justin Sears: ready to go, and then you. hand it off to
[00:18:12] Justin Sears: procurement and they start looking into how to get those parts. That doesn’t work anymore
[00:18:16] Justin Sears: because no matter how long that prototyping phase takes, um, something’s changed in the availability and
[00:18:23] Justin Sears: price
[00:18:24] Justin Sears: and years, years to end of life on the parts that you’ve designed on the board.
[00:18:29] Justin Sears: And some of our customers are designing boards
[00:18:31] Justin Sears: with thousands of different components, so talk
[00:18:33] Justin Sears: about a big data challenge,
[00:18:35] Justin Sears: that, that’s the definition of it– Um, so what, what we see
[00:18:40] Justin Sears: now is
[00:18:42] Justin Sears: folks are making those
[00:18:43] Justin Sears: supply chain decisions as early as they
[00:18:47] Justin Sears: possibly can
[00:18:47] Justin Sears: to mitigate that risk, um, and keeping
[00:18:52] Justin Sears: tariffs in
[00:18:52] Justin Sears: mind throughout the product design process rather than only thinking about tariffs as something they need to
[00:18:58] Justin Sears: respond to retroactively If something
[00:19:01] Justin Sears: changes.
[00:19:02] Justin Sears: So just to give you a specific example of that,
[00:19:06] Justin Sears: when an engineer places a manufacturer’s part number on a schematic
[00:19:09] Justin Sears: or
[00:19:10] Justin Sears: a PCB board design layout,
[00:19:12] Justin Sears: they know now
[00:19:14] Justin Sears: that they are effectively choosing a factory, a packaging site, a country of origin,
[00:19:21] Justin Sears: and a tariff schedule. A- and so another stat
[00:19:25] Justin Sears: from Octopart’s annual survey 2025, when we ask engineers what drives
[00:19:29] Justin Sears: their choice of a part family for their design 59% put supply availability and lead time as the most important factor, and that was the top response.
[00:19:42] Justin Sears: So it’s gone right up to the top of everybody’s consideration set. And so it– this confirms for me that supply is now a new design input, not an afterthought.
[00:19:54] Scott W. Luton: All right
[00:19:55] Scott W. Luton: So I want to say that last part, Jake, a little louder for all the
[00:19:59] Scott W. Luton: folks in the back of
[00:20:00] Scott W. Luton: the room, right? Supply is now a design input, not
[00:20:04] Scott W. Luton: an afterthought. Jake, react to that
[00:20:08] Jake Barr: Hey, amen. It sh- it was, it was always. It was just a question of, duh, w- when am I gonna have my aha moment that I actually need to bring this, in? I think, you know, the, piece that
[00:20:21] Jake Barr: Justin, you know, has spoken to a minute ago, but his ability to do the opportunity
[00:20:27] Jake Barr: for the collaboration
[00:20:29] Jake Barr: suite is huge because you have the ability
[00:20:32] Jake Barr: for the design engineers to actually get that interrogation at an ear- a much earlier
[00:20:39] Jake Barr: stage, right? And I can play through the scenarios
[00:20:43] Jake Barr: of what are the implications if I
[00:20:45] Jake Barr: shift left or if I shift right, as opposed to saying, “No, no, I’ve got… And I just threw my design over the
[00:20:52] Jake Barr: wall, and now we’re gonna get downstream people
[00:20:55] Jake Barr: involved on things like pricing and s- uh, lead times and all…” No. You’ve got to have that up front
[00:21:04] Scott W. Luton: And if you don’t, you’re not gonna win a Triple
[00:21:06] Scott W. Luton: Crown that Jake was mentioning earlier. You won’t even be in the running.
[00:21:09] Scott W. Luton: Uh, so Justin, let’s do this. Y-
[00:21:12] Scott W. Luton: one aspect, some of our pre-show conversations that I
[00:21:15] Scott W. Luton: really enjoyed getting your thoughts on are some of the hidden risks from
[00:21:19] Scott W. Luton: some of the s- the disruptions we’ve referenced a couple times now. What do you think, and then, and, and better yet, what do you see
[00:21:26] Scott W. Luton: that
[00:21:26] Scott W. Luton: procurement and supply chain managers sometimes
[00:21:29] Scott W. Luton: aren’t aware of in terms of these hidden risks?
[00:21:32] Justin Sears: Well, and, uh, I’m gonna share some, some very interesting information with your audience that comes right from our Octopart team, because keep in mind, um, millions of people come to this site every month to look for parts for their designs. And what that gives us is a, a lot of signal about the types of things people are looking for.
[00:21:54] Justin Sears: And, um, so I went to the team and said, “Hey, what are we seeing that’s interesting about, specifically about this, the, uh, build-out of AI data, data centers?” And, um, I’ll get to that in a second, but think about a supply chain manager with limited visibility into data. So if you can’t– If you’ve got a board with 10,000 parts, and you only have so much time and only so much access to information, you have to pick and choose what you look at.
[00:22:25] Justin Sears: And so you really constrain your, your, uh, focus on the things that are vital. And what that means is you start a– y-you lose track of things in your peripheral vision that you might never think are an issue, but turn out to be, um, pretty key. So here’s a great example of that pain that comes when you limit the supply chain visibility because you don’t have the right platform or access to data, whatever.
[00:22:52] Justin Sears: Um, and that’s what’s happening now with the shortage of multilayer ceramic capacitors. So say that three times fast. Multilayer ceramic capacitors. They’re referred to in the industry as MLCCs, and these are not chips. They are passive components made from cera-ceramic and metal layers that cannot conduct electricity.
[00:23:18] Justin Sears: So why do they matter in? the
[00:23:20] Justin Sears: electronic
[00:23:20] Justin Sears: supply chain, and what’s the deal with AI data center build-outs? They matter
[00:23:26] Justin Sears: because AI data centers need many more MLCCs than earlier data centers. They need about four hundred thousand for new AI servers
[00:23:36] Justin Sears: versus two thousand MLCCs with the older
[00:23:40] Justin Sears: servers. And, And this is
[00:23:42] Justin Sears: because advanced
[00:23:44] Justin Sears: AI semiconductors, like the graphic processing units or GPUs
[00:23:48] Justin Sears: made by Nvidia, Intel, AMD, others, they switch electricity
[00:23:52] Justin Sears: on and off billions of times per second, and that’s
[00:23:55] Justin Sears: hot. So they need far more L– MLCCs around them
[00:23:59] Justin Sears: to steady that
[00:24:00] Justin Sears: power supply as they do so many calculations. That’s the reason why you need more of them. And so you can have
[00:24:08] Justin Sears: a f- a stack of thirty thousand dollar GPUs,
[00:24:12] Justin Sears: each GPU costing thirty
[00:24:14] Justin Sears: thousand. You can have all of that sitting on the
[00:24:16] Justin Sears: dock and still not ship the rack because you’re short
[00:24:21] Justin Sears: a part that costs less than a postage
[00:24:23] Justin Sears: stamp.
[00:24:23] Scott W. Luton: Wow
[00:24:25] Jake Barr: Yes
[00:24:26] Justin Sears: plans
[00:24:26] Justin Sears: for the cheapest line on the BOM to be w- the one that stops production because they’re not seeing that, they don’t have enough data, data,
[00:24:35] Justin Sears: visibility to see that in their, in their peripheral vision. Um, and so one really concrete example of that, there was, as reported in, uh, an outlet called TrendForce News, Samsung Electronics, uh, published, uh, a statement effective August 1st, 2026.
[00:24:55] Justin Sears: Samsung Electro Mec- Mechanics raised shipment prices across its entire MLCC portfolio by 30%. Again, scarcity drives up prices, spanning every category, consumer through automotive through AI server with no specification exempted. And so that signal not only increases prices, but it, it affects the ability to use things that people have already bought and have ready to go.
[00:25:26] Scott W. Luton: All right. So Jake, two quick thoughts before I get your comment. We heard there from Justin. Number one, it, uh,
[00:25:32] Scott W. Luton: the MLCC, a new acronym for me, uh, reminds me of a little twist
[00:25:37] Scott W. Luton: on s- on an old bad joke we’ve said here around here forever. But how many parts
[00:25:41] Scott W. Luton: does
[00:25:41] Scott W. Luton: it take to make a new AI
[00:25:43] Scott W. Luton: server?
[00:25:44] Scott W. Luton: All of them, right?
[00:25:46] Scott W. Luton: That,
[00:25:46] Scott W. Luton: that never gets old, at least to me. Number two is, I think, Justin, you had shared a quote in, in, it must’ve been a pre-show
[00:25:52] Scott W. Luton: conversation, and I think this comes from Andy Grove
[00:25:54] Scott W. Luton: with Intel. Quote, “Only the paranoid survive,”
[00:25:58] Scott W. Luton: end quote. I’m not sure if that’s healthy or not, but Jake, weigh in on what we heard there
[00:26:01] Scott W. Luton: from Justin
[00:26:03] Jake Barr: you’re understanding the great interdependency of the world in which we live
[00:26:08] Jake Barr: in today, especially… I- it
[00:26:11] Jake Barr: it doesn’t matter. We can break
[00:26:12] Jake Barr: this down into multiple vectors and sectors, et cetera, and
[00:26:17] Jake Barr: what he’s doing is giving you a case
[00:26:19] Jake Barr: study in, wait, if you’re not really going to school
[00:26:25] Jake Barr: in a deep way around how your supply chain needs
[00:26:29] Jake Barr: to be able to pivot and is using extraordinary data
[00:26:33] Jake Barr: sources to help stay ahead to
[00:26:36] Jake Barr: provide you that predictive understanding of the pivots, right?
[00:26:40] Jake Barr: Then you’re, you’re getting left behind. You’re gonna hang your shingle for going out of business. I
[00:26:45] Jake Barr: mean, Justin and what their approach is, is truly… I mean, you
[00:26:50] Jake Barr: have to understand, this sector is made up of thousands
[00:26:55] Jake Barr: of job shops that specialize in one of those 10,000 components. not many of them. In many cases, it’s simply one, Right So you’ve– The, the message here of saying, wait, how are you gonna do this if you don’t put in a structure and a process and have the ability to just in time collaborate to manage these pivots? If you’re trying to do it solo, you’re on your own. You’re– Hang the shingle today. Just move on to another adventure
[00:27:29] Justin Sears: Jake, I’ll share one– I’ll just share one more, I mean, uh, the team told me about one of our customers and, and a story they told them. It was an industry insider at a company, they’re shipping millions of units a year, and they’ve been buying a sensor from that same vendor for years, so they, they c- they come to count on it.
[00:27:49] Justin Sears: Multiple product lines are built around it, six months of active orders on the books. The vendor called and said they couldn’t supply it anymore. Not that it would be late, not that they couldn’t make it, it w- they were n- unable to supply it. And the reason had nothing to do with the vendor’s capacity or the relationship.
[00:28:08] Justin Sears: That sensor needed a specialty glass, and the vendor’s own glass supplier couldn’t deliver it anymore, as the glass is used in components used in AI data centers. So the failure was two tiers down the chain in a relationship the buyer didn’t know existed with a company they had no contract with and no visibility into, and suddenly they can’t ship this component.
[00:28:33] Justin Sears: So like you were saying, no matter what you manufacture or where you sit in the
[00:28:37] Justin Sears: supply chain, make sure you look for these ripple effects and look for those blind spots in your data where you might not expect problems, because as you mentioned, Scott, Andy Grove warned us, “If you’re not paranoid, you will not survive.”
[00:28:51] Scott W. Luton: And the good good news, and we’re about to, uh, shed some light
[00:28:54] Scott W. Luton: on this, with here in the golden age of supply chain
[00:28:57] Scott W. Luton: tech, there’s
[00:28:57] Scott W. Luton: ways technology can help you not just address and
[00:29:00] Scott W. Luton: mitigate, uh, the risks once they’re known,
[00:29:04] Scott W. Luton: but help move it upstream, help you identify the risks that may be buried
[00:29:07] Scott W. Luton: in assumptions or longtime suppliers like Justin was talking
[00:29:11] Scott W. Luton: about.
[00:29:11] Scott W. Luton: So,
[00:29:12] Scott W. Luton: Justin,
[00:29:13] Scott W. Luton: moving along. You’ve done a great job of kind of establishing some of the pain based on real world that so many organizations are, uh, unvo- unfortunately
[00:29:21] Scott W. Luton: finding that are, especially those that are, as Jake was talking about, clinging
[00:29:25] Scott W. Luton: to the traditional way of doing things.
[00:29:27] Scott W. Luton: Where can AI and new technology really help teams
[00:29:30] Scott W. Luton: identify
[00:29:31] Scott W. Luton: a
[00:29:31] Scott W. Luton: couple things, identify
[00:29:32] Scott W. Luton: component
[00:29:33] Scott W. Luton: risk, evaluate some of those t- all hard-to-find alternatives that we were talking about
[00:29:37] Scott W. Luton: earlier,
[00:29:38] Scott W. Luton: and make better design and sourcing decisions?
[00:29:41] Scott W. Luton: It’s a two-part question. That, but where
[00:29:44] Scott W. Luton: does… That’s the kind of on the technology side, but where
[00:29:46] Scott W. Luton: does the, the human judgment in all that
[00:29:49] Scott W. Luton: remain essential?
[00:29:50] Scott W. Luton: Your thoughts, Justin
[00:29:51] Justin Sears: Yeah, I mean, just like I don’t want to say the AI data center build, it’s posing risks, but we can also use AI to improve our ability to make better products. Um, and just like AI is growing, um, it will eliminate certain tasks, but I believe on balance for the smart people that are designing products, it’s gonna free them to do the things that humans do better.
[00:30:16] Justin Sears: So I’ll talk about that a, a little bit. Now, um, the bottom line is that advanced electronics are too complex for any individual person or team to see and remember every important requirement, design detail over a multi-month project. Like there’s nobody smart enough or no group of people smart enough to keep all that in our heads.
[00:30:39] Justin Sears: AI is great for answering the specific questions based on a lot of data, but humans are always gonna be the ones– Well, I should maybe not say always, who knows what’s gonna happen. But humans are not the ones, uh, humans are the ones that should be asking those questions. So really think about it. Humans ask the questions, AI is great at responding to those questions.
[00:31:02] Justin Sears: And one example I like to give is we have a requirements, portal in Agile teams, and it uses AI to help define hardware requirements. So at the very beginning of the project, even before electronic design begins, the team needs to set up a list of requirements. Now, the way this usually works is someone lists out as many requirements as possible at the beginning of the project based on existing documentation, they might have brainstormed, et cetera.
[00:31:33] Justin Sears: But inevitably, some of those initial requirements will change. New requirements will emerge, but all the requirements, whether they were known from the beginning or came up midstream, they have to be verified and validated before the product goes out to production. And those requirements end up determining which components the procurement team ends up sourcing.
[00:31:54] Justin Sears: So AI is very good at answering this question: “Hey, AI, I want to build this type of thing. I’ve got this les-list of requirements. Um, tell me, am I missing any requirements? Sh- what other requirements should I be considering?” Et cetera. So it’s– AI’s terrible at knowing which question to ask, but if you ask it the question, in this case about requirements, it’s gonna help you get more complete answers faster.
[00:32:24] Justin Sears: Um, so in the case of Altium, our requirements manager is gonna be concerned with building lists of requirements, gap analysis, did I miss anything? And then testing quality. This is my list of initial requirements. Is this good? Um, and AI can evaluate quality based on the team’s goals and suggest improvements that it might make to that list.
[00:32:47] Justin Sears: Now, back to the second part of your question,
[00:32:49] Justin Sears: Scott
[00:32:50] Justin Sears: Humans, why is that still judgment? Now we know, first of all, AI can hallucinate. It can find patterns that don’t exist. You need humans to keep that honest. Um, but really they play a crucial role, um, because AI can elevate their work and remove a lot of the, uh, overhead, chasing down emails, scheduling meetings, etc.,
[00:33:16] Justin Sears: um, to free up deeper thought from humans about requirements, um, in this case. So experts using agile teams can spend more time and energy specifying what they will make and what will make a great product, um, and then verify that the team has built that to spec, and AI can actually help with the verification step as well.
[00:33:40] Justin Sears: But of course, it goes without saying that requirements will determine the bill of materials as well. And so, um, judgment from and advice from the procurement team as early as possible will help influence those requirements, so the requirements come back to a BOM that can actually be purchased and delivered for a product that you can deliver, um, at co- uh, uh, according to spec.
[00:34:08] Scott W. Luton: Mm. Okay. So Jake, two things before I get to your comment. Number one, uh, AI still stinks at determining which questions to ask. Uh, we’ll see what ha- we’ll see how AI does next week ’cause that’s how fast we’re moving. But as of today, there’s certainly a
[00:34:22] Scott W. Luton: human advantage. And then secondly, about the h- hallucination, and you know, AI’s getting better and better by the
[00:34:27] Scott W. Luton: minute, but it, it always brings me back to, I asked, uh, one of the AI
[00:34:31] Scott W. Luton: platforms, uh, a Georgia Tech football question, a conference record question, and it gave me a great “
[00:34:37] Scott W. Luton: answer, but it had Georgia Tech being in the Western Athletic Conference and not the ACC.
[00:34:41] Scott W. Luton: And that alwa- you never know
[00:34:43] Scott W. Luton: how much or how little you can trust
[00:34:45] Scott W. Luton: what you get. But
[00:34:46] Scott W. Luton: Jake, what’d you hear there from
[00:34:48] Scott W. Luton: Justin?
[00:34:49] Jake Barr: Well, he, he gave you a narrative of how to think about unlocking the creative
[00:34:53] Jake Barr: power of the
[00:34:54] Jake Barr: engineers that you have that are working on the process, right? So that they can fast focus on the things that make the biggest difference to you, right? And that’s their creative time.
[00:35:06] Jake Barr: If I am actually trying to
[00:35:09] Jake Barr: come up with the next generation of component, I need that
[00:35:14] Jake Barr: thought time, right? Instead of me worrying about the
[00:35:17] Jake Barr: secondary cross implications, I can use AI to actually help me
[00:35:22] Jake Barr: validate, wait a minute, if you introduce this component into the process, here are some cross things you need
[00:35:30] Jake Barr: to consider, right? Now, that engineer may not
[00:35:34] Jake Barr: have had any history, as we said. There’s no one single person smart
[00:35:38] Jake Barr: enough to be able to
[00:35:38] Jake Barr: stuff all that in their head.
[00:35:40] Jake Barr: So this is a way of short
[00:35:42] Jake Barr: cycling
[00:35:44] Jake Barr: and helping speed up that creative evaluation
[00:35:48] Jake Barr: of the check step, right? Of the ability to pivot instead of going Oh God, we just “
[00:35:54] Jake Barr: lost that glass supplier. All right. Woe is
[00:35:57] Jake Barr: me.”
[00:35:58] Jake Barr: Is it six months
[00:35:59] Jake Barr: before we can find a solve
[00:36:01] Jake Barr: equation? No, it should
[00:36:02] Jake Barr: be easier to pivot now because I have the catalog, I have the ability
[00:36:07] Jake Barr: to look for the known
[00:36:08] Jake Barr: associations. I
[00:36:09] Jake Barr: have the
[00:36:10] Jake Barr: ability for it to help me think about the implications of those
[00:36:14] Jake Barr: switches,
[00:36:15] Jake Barr: right? and I can get back to, let’s finish
[00:36:18] Jake Barr: the replacement design
[00:36:19] Scott W. Luton: Hmm. You know, Jake, a- as you were
[00:36:21] Scott W. Luton: talking about, um, you you kind of made a quick reference
[00:36:25] Scott W. Luton: to the
[00:36:25] Scott W. Luton: folks that may be doing it
[00:36:26] Scott W. Luton: traditionally and they’re
[00:36:28] Scott W. Luton: caught, uh, with their
[00:36:29] Scott W. Luton: hand in
[00:36:29] Scott W. Luton: the cookie jar after they’ve determined they’ve had a big supplier risk
[00:36:33] Scott W. Luton: and fallout. You don’t want to be caught with a rotary phone and
[00:36:37] Scott W. Luton: a, uh, and a, and a Rolodex of phone…
[00:36:40] Scott W. Luton: Y- you let technology do what
[00:36:41] Scott W. Luton: technology’s great at. And, and in this part, in, uh, in this case, in part,
[00:36:47] Scott W. Luton: helping you find, identify the
[00:36:48] Scott W. Luton: risks and, of course, having proven alternatives ready to go,
[00:36:54] Scott W. Luton: not, you know, when you’re in a lurch.
[00:36:57] Scott W. Luton: Um, okay, so let’s do this, Justin and Jake. I’m gonna state an obvious
[00:37:01] Scott W. Luton: thing, okay? I wish I didn’t do this often, but I might do this, I might do this every day. But collaboration, look, folks, we all know it’s critical between engineering, procurement, supply chain organization. I hope we can all
[00:37:13] Scott W. Luton: center on that. I, I hope, right? But what changes when engineers have access to supply chain intelligence while they’re making design decisions, Justin?
[00:37:22] Scott W. Luton: That’s, that’s a really big thing. Tell us more
[00:37:25] Justin Sears: Well, th-this is one of the best parts of my job when I, I get to hear from our customers, and I’ll be out at a trade show or, um, on a customer visit, and I know what’s going on, but when you hear people tell you that, “Hey, when you were telling me originally that supply chain intelligence would help my job, I kind of rolled my eyes,” but then, but then you– They will tell you stories, specific stories, um, of how it helped them.
[00:37:54] Justin Sears: And I think it comes back to this mind shift that’s going on in the industry right now. In the early days of electronics design, it was design first and source later. And now supply chain intelligence is in of itself an important design input, and that awareness is, is, is, um, growing day by day, and we hear it from our customers.
[00:38:18] Justin Sears: So this is– I mentioned shift left before, this is a great example of that. Collaboration can start early in the process. I mentioned requirements. As soon as requirements start coming together, somebody who’s in charge of procurement can see that if it’s in a shared common data workspace. And when they can see that, it’s not that they necessarily start buying parts on day zero, but they can start getting ready, and, and back to the creativity point that humans do, they can think, “Huh, I’ve built something.
[00:38:52] Justin Sears: I’ve procured parts for a product like this before. It looks like a product I’m familiar with. What were some of the suppliers and
[00:38:59] Justin Sears: parts?” And they can start doing some of the pre-work,
[00:39:02] Justin Sears: and then as
[00:39:02] Justin Sears: soon as they get more specificity, and they
[00:39:04] Justin Sears: can see it in the same shared workspace, they can start–
[00:39:09] Justin Sears: They can
[00:39:09] Justin Sears: move forward. they’re not sitting there twiddling their thumbs waiting for a certain
[00:39:12] Justin Sears: date
[00:39:13] Justin Sears: where they can start their work. they’re they’re doing parts of that work all the way along in a much more
[00:39:19] Justin Sears: agile way, and then procurement can start preparing for part purchases a long time before the design is final. And as I was thinking about, um, this topic earlier, I was– and knew that this webinar was coming, I w- I thought you guys must have examples.
[00:39:38] Justin Sears: I mean, you guys are the supply chain pros. I focus on this in electronics. Are there other shift left opportunities or things happening in other industries other than electronics? I’d love to learn from both of you
[00:39:53] Justin Sears: on that.
[00:39:53] Scott W. Luton: Well, Justin, let me answer first. I’m gonna beat Jake to the punch really quick, ’cause I wanna steal the one that Jake might, might, might be sharing here. So top of my head, uh, I think the automotive industry, right? It’s been shifting left for a number of years, right? You think of electronic vehicles and some of the supply chain challenges that’s been there.
[00:39:54] Scott W. Luton: Uh, and even more so, uh, with steel, aluminum, alloys, some of those availability and costs and stuff, th- it certainly has been shifting left there. But Jake, you’ve seen a f- just a few or maybe a ton more supply chains than I have. What comes to your mind?
[00:40:27] Jake Barr: um, so there, there are multiple
[00:40:31] Jake Barr: examples that are consistent with what Justin’s talking about. In
[00:40:35] Jake Barr: c- the world of consumer products, they call it shelf-back
[00:40:38] Jake Barr: design, right? And it’s called the concurrent build-out of the product based
[00:40:43] Jake Barr: on the constraints that you have to have for shelf-based processes or even all the way down to
[00:40:50] Jake Barr: Justin, uh, same-day delivery, right?
[00:40:53] Jake Barr: Because the
[00:40:54] Jake Barr: packaging that has to be built around the product has to meet a different set of
[00:40:58] Jake Barr: standards that it, it didn’t have to maybe two months
[00:41:02] Justin Sears: Oh, that’s interesting. Yeah
[00:41:04] Jake Barr: So that’s one. Uh,
[00:41:06] Jake Barr: in the healthcare and life sciences, they’re undergoing a huge
[00:41:10] Jake Barr: metamorphosis at the, at… right now because of
[00:41:14] Jake Barr: the change in product delivery mechanisms.
[00:41:17] Jake Barr: So think about that as going to more liquid vaccine type, right, delivery mechanisms where shelf lives for the product, instead of it being a pill-based
[00:41:27] Jake Barr: format
[00:41:28] Jake Barr: that previously could last 18, 24 months, right, in a stable
[00:41:33] Jake Barr: condition, from the
[00:41:35] Jake Barr: time you put it in together in a, a
[00:41:37] Jake Barr: batch to the time you put it in somebody’s arm in a clinic may have six days total
[00:41:42] Jake Barr: efficacy, right?
[00:41:44] Jake Barr: So they have to
[00:41:45] Jake Barr: design for, well, that ingredient
[00:41:48] Jake Barr: is
[00:41:49] Jake Barr: not gonna be available. What
[00:41:50] Jake Barr: is our pivot on that? How do we do
[00:41:52] Jake Barr: it? how does that
[00:41:52] Jake Barr: evol-
[00:41:53] Jake Barr: how does that affect the efficacy? Does it buy me six more hours?
[00:41:57] Jake Barr: Does it buy me six less hours, right? And everything else is tooled
[00:42:01] Jake Barr: around
[00:42:02] Jake Barr: that. So yes, multiple examples
[00:42:05] Jake Barr: across verticals, but
[00:42:07] Jake Barr: you’ve got a very eloquent way
[00:42:10] Jake Barr: of actually bringing
[00:42:11] Jake Barr: all that together with your collaboration hub, as well as the indexing of all The sourcing in one place
[00:42:19] Justin Sears: So Justin, before I
[00:42:20] Scott W. Luton: continue
[00:42:21] Scott W. Luton: and, and, um, we’re gonna, uh, look at some other industries. Did you wanna add, since you got Jake’s example, me and
[00:42:28] Scott W. Luton: Jake’s examples, you wanna add anything to that?
[00:42:30] Justin Sears: Yeah, definitely on, on the, on the issue of collaboration, and I have a specific example that I can share. I think, Scott, um, I predicted, uh, the trend, uh, of, of fraudulent
[00:42:45] Justin Sears: parts
[00:42:47] Scott W. Luton: Yes
[00:42:47] Justin Sears: when I was last on this show, and that was in the early… That was around the tariffs. Um, so now, then I said when tariffs make components more expensive, there’s more incentive for bad actors to introduce fraudulent parts in the supply chain, and we were talking about whether that would happen.
[00:43:04] Justin Sears: Um, tariffs are still with us, and now we’ve got demand-side pressures from the data center build-out that are driving up prices even further. So it would stand to reason that there’s even more incentives for fraud, um, in the supply chain. And we’re definitely seeing that. Uh, there’s an organization called ERAI,
[00:43:23] Justin Sears: and they maintain a database on counterfeit electronics, and they’re reporting two especially disturbing patterns over the past two years.
[00:43:33] Justin Sears: Um, so some of this, I don’t know how early the data center build-out pressure came into the supply chain, but the first thing they’re reporting is that counterfeit- counterfeiters used to focus on obsolete parts And that was because they were less likely to be detected. But w- they found, ERAI found that while obsolete components represent the largest share of reports, forty-two point seven five percent, active components, including those available through authorized distribution channels, also appeared frequently in counterfeit reports.
[00:44:11] Justin Sears: So that seems to indicate that there’s enough profit motive for the bad guys to start looking beyond the safe stuff and start moving into those more active, i.e., critical components, um, and putting more fraudulent stuff in there. Number two, approximately twenty-four percent of suspect counterfeit parts passed electrical testing, reinforcing the need for more comprehensive inspection methods than functional testing alone.
[00:44:40] Justin Sears: So some of these fraudulent parts are good enough that they might pass testing, but they still are gonna have downstream impacts. And so I guess what that tells me is we all assume that counterfi- counterfeiters chase the scarce parts. The data says the opposite. The parts you can buy easily through authorized channels get faked more often than the hard-to-find ones.
[00:45:03] Justin Sears: So scarcity isn’t the draw. It’s volume that attracts the fraudsters because they can hide their dirty deeds in the volume of parts purchased. So this creates a needle in the haystack problem for our customers. It becomes harder for engineers to catch fraudulent components in a batch of ten thousand parts, say, than in a batch of ten.
[00:45:23] Justin Sears: So today, catching counterfeiters, back to the collaboration point, it’s a team sport. One engineer might see something that’s slightly odd at one stage of the development process. Another engineer might see something slightly odd three weeks later, and without a common data thread that?
[00:45:42] Justin Sears: connects those two moments in time, um, it would w- look like two blips, but now we can combine that, and it becomes a pattern, and they’re both working the same system, and it’s much more likely for the team to identify something that’s suspicious and needs to be looked into.
[00:46:00] Justin Sears: So we think that purfir- procurement folks need to be collaborating with requirements people, electrical engineers, mechanical engineers, and all the other roles, and all of those collaborators should be able to access the same design data in a secured environment so that, and I use the example of finding fraudulent parts, but this applies to a lot of other things you want to have happen.
[00:46:22] Justin Sears: There are many more ways where collaboration with procurement improves the product and minimizes the cost of production in the
[00:46:28] Justin Sears: end.
[00:46:30] Scott W. Luton: All right. So Jake, uh, other than we gotta
[00:46:33] Scott W. Luton: get Justin, given his track record of making great predictions, I gotta get him to pick my Mega Millions, uh, lottery
[00:46:39] Scott W. Luton: ticket next maybe. But Jake, you’re, you’re giving him a bit of a supply chain ovation there. Uh, what’d you
[00:46:44] Scott W. Luton: hear there, J- Jake?
[00:46:45] Jake Barr: I was. It, it, you know, it hit it on the head. The counterfeiters and your need to be able
[00:46:51] Jake Barr: to use a solution set like this isn’t just for the scarce parts,
[00:46:57] Jake Barr: it’s for the high volume elements as well as well
[00:47:00] Jake Barr: as the high margin ones, right?
[00:47:02] Jake Barr: So fundamentally, you have to have due diligence that goes
[00:47:06] Jake Barr: across, and as he outlined very well, this is a team
[00:47:11] Jake Barr: sport. So actually, this is one of the
[00:47:14] Jake Barr: ways that
[00:47:15] Jake Barr: I personally like how AI helps you locate
[00:47:20] Jake Barr: that. Because before, it might’ve been a pocket that was exposed on one
[00:47:25] Jake Barr: product and one process in one
[00:47:27] Jake Barr: area with one buyer, et cetera, but it was in a cave. Nobody else knew
[00:47:32] Jake Barr: about it.
[00:47:33] Jake Barr: I can actually bring that
[00:47:35] Jake Barr: to
[00:47:35] Jake Barr: life and actually run a search across any queries that we’ve had across any of our
[00:47:40] Jake Barr: product lines or any of our
[00:47:42] Jake Barr: designs, and quickly start identifying the bad
[00:47:46] Jake Barr: actors where they’re trying to pop up in multiple places,
[00:47:48] Jake Barr: not just one
[00:47:49] Scott W. Luton: So Jake and Justin, I wanna, I wanna kinda broaden out just a smidge. You know, earlier Jake was talking about,
[00:47:55] Scott W. Luton: uh, a couple different
[00:47:55] Scott W. Luton: industries, including the,
[00:47:57] Scott W. Luton: uh, the healthcare, uh, and the you
[00:47:59] Scott W. Luton: know, the vaccination and, and, uh, medicine space. Um, you know, in industries such
[00:48:05] Scott W. Luton: as aerospace or automotive, which, uh, we, we talked about, or medical devices, a little cousin of what Jake was talking about, you know, products can ma- can remain
[00:48:12] Scott W. Luton: in production for years. And frankly, I hope that’s the case because as, as I shared with both y’all pre-show, I’ve got a 2004 Honda Accord that runs
[00:48:20] Scott W. Luton: like a top. I mean, it’s great. And of course, getting
[00:48:24] Scott W. Luton: parts as We maintain that is getting trickier and trickier.
[00:48:28] Scott W. Luton: So Justin, I got a question. All this leads to a
[00:48:31] Scott W. Luton: great question, I think.
[00:48:32] Scott W. Luton: How should organizations balance
[00:48:34] Scott W. Luton: cost, innovation, component availability,
[00:48:37] Scott W. Luton: and long-term life
[00:48:39] Scott W. Luton: cycle risk when making all these design
[00:48:42] Scott W. Luton: decisions?
[00:48:44] Justin Sears: Well, and that’s exactly right. Uh, for better or for worse, they do have to keep all of those things balanced, And, they have to have data on all those things. And so, um, if you think about how the electronics industry has evolved, design decisions used to be about mostly about how to get a functional product out the door as quickly as possible.
[00:49:04] Justin Sears: Now, teams must think about the full product life cycle from the moment they sketch out the initial concept. And so some examples I’ve given on this call, uh, on this conversation have been about, uh, electronic prototyping, but once a product moves from prototype to manufacturing, everything’s amplified.
[00:49:25] Justin Sears: Maybe you need to buy 10,000 parts to do the prototype, you need to buy, buy a million parts when you’re in production or 10 million. And so you need to buy orders of magnitude more parts, and that means more exposure to supply sho-shocks and even bigger problems when you can’t get enough parts. And so the initial design decisions a team made during prototyping, these turn into cradle-to-grave product lifestyle management responsibilities.
[00:49:53] Justin Sears: And, uh, you all probably know this acronym the software category known as PLM or
[00:49:59] Scott W. Luton: Right?
[00:50:00] Justin Sears: product lifecycle management. About a year ago, Altium acquired a company called Duro And Duro is remaking PLM into something that’s much lighter, faster, and more agile for modern cloud computing. We love having them part of our family, um, because they’re letting us extend that visibility and that collaboration to full lifecycle management of the product.
[00:50:26] Justin Sears: And so we’re in the process of bringing those Duro capabilities into the Altium Agile Teams platform. And, um, every part you pick during prototyping is a part somebody has to keep buying for the next 12 to 15 years. I mean, think.
[00:50:41] Justin Sears: about it like that. Prototype decisions are lifecycle decisions in disguise. So you used to be– You used to have to be big enough to afford PLM. PLM is not a low-dollar investment, and there’s lots of data integration challenges with traditional PLM. So the companies who are disrupting right now, aerospace, med tech, the industries you mentioned, they’re not often big enough to feel like they need PLM, and yet they need the benefits of PLM.
[00:51:15] Justin Sears: So they’re kind of– A lot of these companies are just putting off the purchase decision on PLM, and what Duro said is, “No, why do you need to wait?” Um, you have the discipline and you have the need. You don’t need to be big to start working with PLM. And so the industry segments you mentioned, there are thousands of young companies.
[00:51:38] Justin Sears: Like, you think of aerospace,
[00:51:39] Justin Sears: automotive, medical device, we can think of the top three companies in the world in each of
[00:51:45] Justin Sears: those spaces, but there are thousands of young companies Right
[00:51:48] Justin Sears: now disrupting those sectors. Because they can design better, faster using cloud-based platforms like Altium to get the same advantages and speed for requirements management, cross-functional collaboration, the things we mentioned on this– in this conversation.
[00:52:04] Justin Sears: The current industry titans had to build those PLM capabilities themselves, or they haven’t purchased them for great expense. Um, now in aerospace, just take a look at how many drone or unmanned aircraft companies there are. In automotive, had you heard the names Tesla or Rivian 20 years ago? Think of how fast that’s moving.
[00:52:30] Justin Sears: And then there are thousands of med tech companies now with less than 100 employees, and many of those will become household names at some point. So what we want to be able to do is offer these younger companies, uh, at PLM, this is what Duro’s mission is, a, a PLM capability so they can start thinking about those 12 to 15-year time horizons.
[00:52:51] Justin Sears: And one thing that all of those emerging companies have in common is that they learn how to use their own data to optimize their design operations so they can continuously improve and move faster than the older companies that don’t have quite as much data agility on average. And so most of those smaller venture-backed, fast-paced, um, startups in those spaces I mentioned, they used to have to wait to be big enough to get PLM, and now they can subscribe to Duro and get most of what they need at an earlier stage of their journey and, and continue to accelerate that aspect of their business
[00:53:28] Justin Sears: as well
[00:53:29] Scott W. Luton: Jake, hang on one second ’cause we’re coming down to a fast and furious finish, and I wanna get your patent and key takeaway. But I got one more question for Justin before I, I do that and share some resources.
[00:53:40] Scott W. Luton: So Justin, in the little bit of time we got left, if you could give hardware designers and supply chain leaders three, good things come in three, three things they should start doing today to reduce component risk across their next generation of products, what would those three things be?
[00:53:56] Justin Sears: All Right?
[00:53:57] Justin Sears: Well, if you’ve been paying attention to this conversation over the last hour, this should sound repetitive, but that’s by design. So number one, start designing products with supply chain requirements. Supply chain and part availability should be a critical factor that affects most design decisions.
[00:54:13] Justin Sears: That’s number one. Number two, to do that, bring supply chain data close to design decisions. We recommend Altium Agile teams, I’m very biased, as the best way to do that so that you’re making design decisions and you can– and you see the part data in that same environment, so you can adjust to it as it changes.
[00:54:32] Justin Sears: Number three, empower team collaboration. Think of every colleague as someone you need to empower to make decisions that reduce supply chain risk no matter what they do in that, in that project team. Everybody has to be on board to reduce supply chain risk
[00:54:48] Scott W. Luton: Hmm. And folks, if you wanna reach out to Justin, who admittedly is very partial, uh, ’cause I’m, I imagine there’s other ways you can do that. But if you wanted to find how you can act on all three of those
[00:54:58] Scott W. Luton: challenges, Justin, how can folks connect with you and Altium team?
[00:55:03] Justin Sears: connect with me on LinkedIn, um, and, uh, just mention that you heard of me through this show so I know how to sort the wheat from the chaff and, uh, I would be happy to connect with anyone who’s listening to Supply Chain Now.
[00:55:16] Justin Sears: Just drop me a invite and we’ll
[00:55:18] Justin Sears: get connected.
[00:55:20] Scott W. Luton: Outstanding. And really quick, you know, we got the smartest audience in all of global supply chain. So Justin, I like how you put the wheat from the chaff there. Um, and for what it’s worth, folks, I’ve, I’ve been fortunate to, um, collaborate with Justin for a couple of years now and, and connecting with some folks in the industry.
[00:55:36] Scott W. Luton: S- nicest, smartest guy you’re gonna meet, so make sure you add Justin to your network. Um, all right, so Jake, uh, before I share some resources, um, we covered a lot of ground in the last hour, and I’m gonna ask you the toughest question of the day because, uh, what is your one patented key takeaway
[00:55:55] Scott W. Luton: from today’s big conversation?
[00:55:58] Jake Barr: You heard a case study in how
[00:56:00] Jake Barr: to think about lighting up concurrent design in your operation. I, mean,
[00:56:06] Jake Barr: it, it is a fabulous demonstration of how you can take all the chaos
[00:56:12] Jake Barr: that’s happening in this new world of never normal
[00:56:15] Jake Barr: and socialize it in a very convenient way with your operating team so that you’re not getting caught with your pants down around these pivots.
[00:56:25] Jake Barr: Um, and that is, that is huge because that’s not the script for how we’ve run most operations. We design in a box and throw it over a wall. So what we’ve been talking through is really real-life situations
[00:56:44] Jake Barr: where, wait a minute, I can design almost on the fly now with new operational inputs and determine, do I have a pivot ready?
[00:56:56] Jake Barr: Do I need to pivot? When to pivot? And what’s the implication of me pivoting on the design of my product? That’s huge, guys. Product lifecycle management just simply hasn’t been run that way
[00:57:09] Scott W. Luton: Hmm. That is an
[00:57:10] Scott W. Luton: excellent patented key takeaway from the one and only John Wayne of global supply chain, Jake Barr. And Justin, you didn’t know
[00:57:17] Scott W. Luton: this,
[00:57:18] Scott W. Luton: uh, but y’all are in… Y- did you know Altium must be a eureka moment manufacturer? Did you know
[00:57:23] Scott W. Luton: that, Justin? Because I, can you– I just after, after the last
[00:57:26] Scott W. Luton: hour, all I can envision is teams, you know, once they start communicating differently and sharing information differently and of course booting upstream, the realizations they’re having, and not necessarily all of them like, you know, putting out this fire, but realizing some of their, some of the risks that have been buried deep, you know, down in the various parts of the organization.
[00:57:47] Scott W. Luton: So Justin, you’re an EEE, EMM. Did you know that, Justin?
[00:57:52] Justin Sears: I, I, I didn’t know that until now, but I’m, uh, I wear it with
[00:57:56] Justin Sears: pride
[00:57:57] Scott W. Luton: Okay, I would too. I would too. We all need more eureka moments. Uh, all right, a couple resources, uh, that I wanna share with folks out there, starting with Altium Agile Teams. It provides the structure that engineering requires while connecting every discipline in one work sta- uh, workspace without sacrificing speed.
[00:58:16] Scott W. Luton: And we all know the velocity that global businesses is moving at these days, faster and faster. And better yet, Justin and the team are offering a free 30-day trial. You can kick the tires, determine if it’s for you and your team. And then secondly, we got a white paper.
[00:58:31] Scott W. Luton: If you wanna dive deeper on some of the themes that, uh, and opportunities that Justin shared here today, check out this white paper, “Building Supply Chain Resilience: Transforming BOM Management for Modern Electronics.” So check that out. And Justin, one last thought before we wrap here. Y’all work with many, many electronics manufacturers, but as you and I have talked about time and time again, what isn’t impacted by electronics in today’s age,
[00:58:56] Scott W. Luton: huh?
[00:58:58] Justin Sears: I, you know, I, I sometimes say supply– Yeah, and I, Jake knows this. I mean, Jake was at Procter & Gamble, and I always give the example of cereal, but I’m sure there’s electronics involved in making cereal
[00:59:09] Justin Sears: or, or medicines or anything, right?
[00:59:12] Justin Sears: There– It’s–
[00:59:13] Justin Sears: There’s nothing, nothing that leaves out,
[00:59:15] Justin Sears: you know
[00:59:16] Scott W. Luton: Justin Sears with Altium. Thanks for being here, Justin.
[00:59:20] Scott W. Luton: Uh,
[00:59:20] Justin Sears: It’s always a pleasure.
[00:59:21] Justin Sears: Let’s do it again
[00:59:22] Scott W. Luton: Come on back soon. Come on back soon. And Jake Barr, the one and only. Thanks for being here, Jake. So folks, I did enjoy it as well.
[00:59:31] Scott W. Luton: folks, Justin shared some very practical and actionable, uh, advice, takeaways, you name it, here today. So you got lots of things to choose from, but pick one and do something with it. Deeds, not words. And with that said, on behalf of the whole Supply Chain Now team, Scott Luton challenging you to do good, give forward, be the change that’s needed.
[00:59:50] Scott W. Luton: And we’ll see you next time right back here on Supply Chain Now. Thanks everybody.
