Supply chain- Avidyne edition

Discussion in 'Avionics and Upgrades' started by Racerx, Nov 20, 2021.

  1. Racerx

    Racerx Cleared for Takeoff

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    Saw this on the Dynon forum which came from the Avidyne forum. Don't shoot the messenger.

    Valued Customers:

    Like all manufacturers of electronic products, Avidyne has been subjected to unprecedented supply chain challenges in recent months. Despite our best efforts to maintain our costs and availability of components, including ordering our electronic components more than 52 weeks in advance of our production need dates, we have been subject to frequent supplier decommit to our orders. This situation is very dynamic, with new component shortages and price increases occurring daily.

    To give you an example of the challenges we face, we have a long-term purchase agreement for a particular component used on Avidyne’s IFD and Skytrax products. The supplier of that component recently informed us that despite our long-term supply agreement, they would be unable to commit to suppling any more until at least 2024. We were fortunate to locate an alternative source for a limited number of this particular component that allows us to cover our expected production of the affected products through 2022, but for an increase in price of over 500% of what we were previously paying. This increase in the cost of an already-expensive component, with no advance notice, is unfortunately not unlike the increases that we have seen for many of the components in our products in recent months.
    To address these challenges, and to make our best efforts to continue predictable price and availability of all of our products, Avidyne is taking the following actions with immediate effect:

    • We will honor all purchase orders received and accepted prior
    to today for shipment in 2021.

    • All promotions are suspended.

    • All new purchase orders going forward and orders scheduled in 2022 will be subject to a temporary Component Cost Increase Surcharge. We will establish these surcharges at the beginning of each month. When we accept a purchase order, we will confirm the price and delivery of that order, or we will provide our best estimate of our timeframe for delivery. Please confirm this surcharge amount with your dealer.

    As of the date of this post, all Avidyne products as well as the NGT9000 are in stock and available to order. However, despite our best efforts, we may be subject to unexpected interruptions in the availability of our products in coming months. To avoid being impacted by shortages, we very strongly recommend ordering equipment for your planned installations as soon as possible.
    We understand and regret the inconvenience of these changes. During this period of supply chain challenges, it will continue to be Avidyne’s objective to supply each order that we accept at the quoted price and on the quoted delivery date. Be assured we are working as hard as possible to mitigate future surcharges and potential supply interruptions. We will communicate future surcharge changes and any product supply interruption information as soon as possible.

    Feel free to reach out to marketing@avidyne.com with any questions.
     
  2. Clip4

    Clip4 Final Approach

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    Us foolish Americans are reaping what they have sown.
     
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  3. PaulMillner

    PaulMillner Line Up and Wait

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    What *they* have sown, or what *we* have sown? Take the longer view... we've enjoyed decades of low parts cost... does on supply interruption, linked to an every-100-year type pandemic, really offset all the benefits of cheap, plentiful semiconductors?

    I'm not sure where the crossover point it, but it's far from clear that the present inconveniences offset all the past benefits to our economy... perhaps it's foolish not to look at the math before making pronouncements?
     
  4. G-Force Aviation

    G-Force Aviation Filing Flight Plan

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    Yes, I saw this email as well. Apparently Garmin is being hit by this as well. Since Garmin and Avidyne are the only WAAS GPS manufacturers, the large avionics repair shops with high operating overheads are going to be hit hard by this one in 2022...

    It's going to be tough for both the installers and consumers for avionics work and upgrades.
     
  5. Clip4

    Clip4 Final Approach

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    Like over indulging on cheap whiskey for several decades. Really inexpensive and fun for a while, but the long term cost to your long term health may not be reversible.

    We bet free trade would reform the communists. It did, it reformed them from being poor communists to being rich communists.
     
    Last edited: Nov 21, 2021
  6. schmookeeg

    schmookeeg En-Route

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    Sounds like I need to get off the fence and order up some JPI gadgetry. I was hoping for some sort of black friday sale :p
     
  7. Scrabo

    Scrabo Pattern Altitude

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    Expect to see this word a lot the next 24 months…. “Surcharge”
     
  8. Mxfarm

    Mxfarm Pre-takeoff checklist

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    Call me a cynic, but there no way a company can say, out today - we’ll have more in 2 years. Nope, not even believable.
     
  9. SoCalPilot88

    SoCalPilot88 Pre-takeoff checklist

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    Take an even broader view. I'm sure the Americans who lost these jobs to the communists decades ago didn't enjoy it.
     
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  10. A1Topgun

    A1Topgun Cleared for Takeoff PoA Supporter

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    Glad I got mine installed before the SHTF!
     
  11. PaulMillner

    PaulMillner Line Up and Wait

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    Perhaps, another dataless assertion. Perhaps millions enjoyed the lower cost goods that enabled business and personal endeavors not otherwise possible. Absolute protectionism is seldom an absolute good, and no one's offered any evidence of benefit in this case... other than a little gratuitous commie bashing. Thanks for that... nice to know that your knee still jerks well... If you look at China today, you'll find the semiconductor business is fairly capitalistic, actually... would you like to do some reading on that?

    Paul
     
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  12. SoCalPilot88

    SoCalPilot88 Pre-takeoff checklist

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    Imagine that, the Berkeley guy pompously dismisses the pro-American comment as unintellectual and jumps to communist China’s defense.
     
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  13. Racerx

    Racerx Cleared for Takeoff

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    In the early 90's the US manufactured 37% of the world's microchips. Today, were about 12%, despite the explosion of need for chips In those 30 years. 92% of the most advanced chips made are made in Taiwan. China makes up 8%. Taiwan and South Korea make up the largest shares of semiconductors. Our regulation of the industry has pushed the manufacturing elsewhere. Many expect China to overtake Taiwan by 2030.
     
  14. Morgan3820

    Morgan3820 En-Route

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    I was debating on whether to get a new auto pilot. I guess I don’t have to worry about that decision, because it sounds like it’s already been made.
     
  15. Cap'n Jack

    Cap'n Jack Final Approach PoA Supporter

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    Which regulations do you mean?

    They AREN'T communist. National socialist is the closest economic model I can think of for mainland China. They have several stock markets, people can start and own businesses, but the government intervenes in the market.

    We also helped finance the Chinese military and gave their government the ability to be obnoxious. <sarcasm>The Taiwanese, Vietnamese and Filipinos enjoy the Chinese military in their waters/ADIZ all the time </sarcasm>
    Dewitt made some very good tools here in SE Nebraska- everyone recognizes the Vise grip brand. Management decided they could make a lot more money by selling the product at the same price, but cutting costs by moving production to China. More than half the town lost their jobs when that happened.
    Malco makes a similar tool now. I'll buy those over the Harbor-freight clone called "Dewitt"
    https://beatricedailysun.com/news/l...cle_cdf1c645-3d19-5f74-aa51-d59c2e8c9fcc.html

    My opinion is that it is good to have more production and manufacturing here in the USA.
     
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  16. Morgan3820

    Morgan3820 En-Route

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    Respectfully, My uneducated gut feeling doesn’t think that will happen. I feel other issues will intervene.
     
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  17. Cap'n Jack

    Cap'n Jack Final Approach PoA Supporter

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    The Chinese government has been P'ing off enough other countries, which may be one of the issues you allude to.
     
  18. NoHeat

    NoHeat En-Route

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    The company announcement in the OP mentioned that presently all Avidyne products are in stock and available to ship. (They should have started their announcement with that, since it is actually positive news that distinguishes their company from Garmin. Their announcement otherwise seemed surprisingly off putting and negative, for a company’s marketing.)

    This week I was at an avionics shop that handles both brands, and it was mentioned to me that Avidyne indeed has stock of new products now, whereas Garmin has a wait of well over half a year for one product (something xi maybe, I don’t recall.)
     
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  19. Arnold

    Arnold Cleared for Takeoff

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    See:
     
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  20. Racerx

    Racerx Cleared for Takeoff

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    Or could it be marketing genius. "Our vendors are 3 years back ordered, we have stock now. Don't expect a sale anytime soon. Buy now while the stock is here!"
     
  21. Racerx

    Racerx Cleared for Takeoff

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    Regulations in general are pretty nil over there. Wanna burn tires to heat the factory? Please do so we don't have to get rid of them. Foxconn in Wisconsin had a hullabaloo over water usage. Wisconsin was going to allow 7million gallons a day to be diverted from Lake Michigan which sidestepped the Great Lakes Compact. That was a huge mess from the start.
     
  22. Cap'n Jack

    Cap'n Jack Final Approach PoA Supporter

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    As far as I can tell, that's been changing in the People's Republic of China. Air pollution was greatly reduced when I was there in late 2019.
     
  23. PaulS

    PaulS Touchdown! Greaser!

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    Absolutely, I would say this to anyone who would listen, offshoring the supply chain would turn into a huge cluster****. Here we are.
     
  24. Salty

    Salty Final Approach

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    That’s kind of what came to my mind. I suspect a lot of companies are thinking “hmmm, we could raise prices and blame COVID and everyone will believe it because of all the horror stories. I bet our competitors are going to do the same, so we won’t be undercut” it’s kind of like a silent collusion.
     
  25. Cap'n Jack

    Cap'n Jack Final Approach PoA Supporter

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    In addition, I've heard rumors about hoarding/gouging from vendors from our production team. I'm not in the gossip chain to know more about it. It's hard to accuse other companies when people are buying a year's worth of inventory if they can get their hands on it, just to make sure they can deliver product. It reminds me of the people buying TP, but it's companies and electronics this time!
     
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  26. Racerx

    Racerx Cleared for Takeoff

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    Oh not the tp crap again. Luckily the 6 pack I had on hand before the hoarding lasted me until that was over or things would have been messy.

    We saw the same thing happen when the steel tariff got put in place. People our suppliers had never dealt with were calling and trying to buy out their whole inventory. And these are large suppliers that have millions in inventory. Since about July 2020 our steel prices have gone up from an all time low of .35lb to 1.20+ per pound. And clients asking if that quote from last year was still good.
     
  27. Bob Noel

    Bob Noel Touchdown! Greaser!

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    sadly, pretty low bar...
     
  28. PaulMillner

    PaulMillner Line Up and Wait

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    Imagine that, you don’t have any facts, so you resort to ad hominem and misquotes. Sad for you.
     
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  29. Doug Reid

    Doug Reid Line Up and Wait

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    I can sum up the whole issue with one word "greed".

    I watched our thriving community lose it's prestigious furniture and textile industry because the suits in charge thought they could make a couple dollars more per unit moving all our manufacturing to other countries. Our town is a manufacturing ghost town today...large manufacturing plants sit crumbling in ruin and the effect on the community was devastating. BTW, the end result was that the once treasured furniture that was made here is now considered junk and the company was sold.
     
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  30. Morgan3820

    Morgan3820 En-Route

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    The flip side is that people often don’t want to pay for a quality product or service.
     
  31. unsafervguy

    unsafervguy Pattern Altitude

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    its not. molex parts are just not available anywhere. they are quoting over a year for some common connectors.JST is just as bad, thats whats driving the appliance shortage. JST connectors are pretty much the standard in appliance design.PIC microprocessors are just about unobtainable also. I have been trying to get solid state relays since july. maybe in a couple of months. Personally, i believe its china squeezing the US knowing they can get a way with its since they have already bought and paid for the presidency of the US.
     
  32. kyleb

    kyleb Final Approach PoA Supporter

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    Even worse. The business advantage gained by offshoring is temporary because your competitors will follow suit. Beyond that, your ex-factory workers will have to move to lower paying jobs and will see their buying power drop, further undermining the economy. It is a circular firing squad.
     
  33. bid shader

    bid shader Filing Flight Plan

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    Not really. Some short term gains accrued to first movers that was then clawed back as others caught up, but the price reductions make more permanent gains for both producers and consumers. Arguments about "workers replacing good jobs with worse jobs" suggesting that there are fewer consumers out there to buy products is also only true locally and not economy-wide. If a factory worker loses their job then of course they are worse off, but in aggregate this just hasn't happened. Median incomes in the U.S. are about 20-25% higher now than they were in 1990 before the offshoring wave started, and the unemployment rate is not meaningfully different.

    So it's just not the case that the west accepted more supply chain risk for no gains. There were real, significant gains that were bought by increasing the fragility in global logistics. Whether they were worth it is more of a personal thing, but to say it was irrational or that no gains were made is simply wrong.
     
  34. Cap'n Jack

    Cap'n Jack Final Approach PoA Supporter

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    What sort of jobs have replaced the manufacturing jobs here? Are those jobs good for maintaining a healthy national economy? How much has inflation eaten into those gains?
     
  35. Salty

    Salty Final Approach

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    This thread just needs a overly obnoxious pro LGBTXYZ post to make it appropriate for PoA.
     
  36. Cap'n Jack

    Cap'n Jack Final Approach PoA Supporter

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    Why?
     
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  37. bid shader

    bid shader Filing Flight Plan

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    The numbers I quoted were after adjusting for inflation (Countdown to a reply saying "they lie about official inflation, and REAL inflation is way higher") - the U.S. in aggregate, per capita, after inflation, is much better off than it was 30 years ago. No one argues that when a person loses a job and replaces it with a worse job, that's bad for the person. When a town loses a manufacturing facility, that's generally always bad for the town, and even at the state level, trade with China has harmed some entire states. At the total economy level however, there have been benefits as well that are more difficult to conceptualize. My only point is that there were benefits, and those commenters saying that the west moved to a more fragile manufacturing/logistics framework relying on outsourcing and international trade in exchange for no benefits are wrong - there were benefits, and overreacting to a once in 50-100 years pandemic and condemning the whole thing seems extreme...
     
  38. Cap'n Jack

    Cap'n Jack Final Approach PoA Supporter

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    Yet you didn't answer my question about whether those new jobs are good overall for a healthy national economy, nor what sort of jobs have replaced the manufacturing jobs. There may have been some benefits to outsourcing, but there isn't evidence given that the benefits have outweighed the harm done to our economy.

    You claim to have quoted numbers, but I saw no sources cited.

    I know that, when (if) the pandemic wanes, I'll be in Asia quite a bit because so much pharmaceutical R&D has been outsourced there from here. It's going to take a decade to rebuild that capability if, as a society, we choose to do so.
     
  39. bid shader

    bid shader Filing Flight Plan

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    I think I did answer the question - someone replacing their high paying manufacturing job with a lower paying job is worse off. People, towns, and states (e.g. the middle of the country) that were most heavily impacted by outsourcing have lagged other areas (the coasts, cities) that received the benefits of a shift to service sector (e.g. Research, Financials, etc.) jobs. In aggregate, there is no real way to know whether we're "better off" in as a society - the counterfactual doesn't exist.

    Also, I wanted to point out that my original comment on this was not disputing you or anything you said, but another commenter who implied that it was all costs, no gains fueled by short termism. That is what I disagree with. There were benefits, permanent ones, but whether or not they outweigh the costs is almost unknowable.
     
  40. Cap'n Jack

    Cap'n Jack Final Approach PoA Supporter

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    I understand now.