Industrial Automation – It Doesn’t Have To…
Join us as we explore all things Industrial Automation. Brandon Ellis, owner & president of elliTek, has seen the good, the bad, and the great when it comes to automation. We'll delve into the challenges that manufacturers face, find out what it doesn't have to..., and have some fun!
Industrial Automation – It Doesn’t Have To…
Industrial Automation - It Doesn't Have To... Be In Short Supply
This is an issue of Global Proportions! We're talking about the supply chain crisis. From aluminum to semiconductor chip shortages, the lack of essential materials is affecting just about everyone and nearly all levels of production.
- Why is there a chip set crisis, aka Chipageddon?
- How long will Chipageddon last?
- Is there a fix for manufacturers?
- Tesla's sales are through the roof this year. How has Elon Musk managed this crisis? And, what lessons can we learn from Tesla?
- What products are machine builders, system integrators, and end users waiting on?
- What products are available now?
- How are elliTek's Partners navigating the supply chain crisis?
Stayed tuned to here interviews with Jon Fields, Senior Motion Sales Engineer with Yaskawa Motion & Drives Division and Peter Zafiro, General Manager with LinMot Linear Motors.
You'll hear how these two companies are succeeding AND delivering even in this chaotic logistical ordeal that everyone is experiencing.
There is light at the end of the tunnel and it isn't an oncoming train. You can find your way through the supply chain crisis, but you may need to look outside of your normal sources!
If you're searching for product, check out elliTek's Partners in Automation. There are products available. The lead times may be a bit slower than normal, but you won't be waiting a year to get what you need to keep your business moving forward.
No matter where you are in your automation journey, elliTek will meet you there!
The last episode was elliTek's video debut. If you want to check out the video podcast, head over to elliTek's YouTube channel. While you're there, go ahead and subscribe, so you don't miss an episode.
Reach out to us with any questions or future topics.
- LinkedIn: www.linkedin.com/company/ellitek-inc
- Instagram: www.instagram.com/ellitek
- Facebook: www.facebook.com/ellitek
- Twitter: www.twitter.com/elliTek_Inc/media
If you don't want to click on those links, pick up the phone and call us at (865) 409-1555 ext. 804.
Videos courtesy of:
Name: Intel
Title: From Sand to Silicon: the Making of a Chip
Link to video: https://www.youtube.com/watch?v=Q5paWn7bFg4
Name: Linas K
Title: How Microchips are made
Link to video: https://www.youtube.com/watch?v=F2KcZGwntgg
#elliTekAutomationNation
Industrial Automation – It Doesn’t Have To… Be In Short Supply
Brandon Ellis 0:00
Today we're talking about something of global proportions. That's right, we're talking about the supply chain crisis, which is pretty much affecting everyone from one end of the earth to the other. And so, we're gonna be talking not about the doom and gloom, but how certain manufacturers are seeing their way through. So, join us.
Hello, everybody, and welcome to Industrial Automation - It Doesn't Have to... In case you're new to our program, I'm Brandon Ellis, and I'm your host and also the owner of elliTek. Before we start today's episode, I just want to ask that you consider hitting the follow button, and the subscribe button, depending upon the platform you're listening upon. Also, if you're listening on Apple podcasts and you enjoy what you hear, please go to the show page and scroll to the bottom, leave us a five-star rating and review. Now that we've got the marketing out of the way, I want to say thanks for tuning in. So, let's get started with today's episode.
Good morning. Good afternoon. Good evening. This is Brandon Ellis, your host of Industrial Automation - It Doesn't Have to..., and I'm here as always with my co-host, Beth Elliot. Hey, Beth. Good morning.
Beth Elliott 1:12
Good morning. How are you, Brandon?
Brandon Ellis 1:14
Good afternoon.
Beth Elliott 1:16
It is almost afternoon.
Brandon Ellis 1:18
Good evening. So, whenever you're seeing this, but yes, We’ve got video this time around and last time as well. So that went well. We're getting a little bit better.
Beth Elliott 1:31
Better each time. It takes a little practice, but we’re getting there.
Brandon Ellis 1:38
A lot of things have been going on.
Beth Elliott 1:40
Yeah, yeah. So, did you want to talk about all the buzz going around the robotic welding around our shop?
Brandon Ellis 1:48
Yeah, you know, last podcast we were talking about robotic welding. And we actually have done some even more stuff. We had a couple of customers come down. And it was really interesting because they were here for approximately an hour, visiting our shop and we had our Hanwha demo set up with one of our welders. They both were welders, so I didn't have to try to teach them my skill set. That's a good thing. They figured out real quickly that they were above me at that. But you know, the interesting thing was we took about 20 minutes to show them the Hanwha robot. And it took about 20 minutes of showing them, well, we answered some questions, they were asking good quality questions about, you know, the maintenance, the upkeep, those kind of things. But then we pulled out the pendant, the control pendant and began showing them how the storyline, the storyboard programming works and, and that kind of stuff. And then there's also built-in features already that Hanwha provides for welding. And so, the weaving, you know, the shapes of the weaves and how you can control the amplitudes and all that kind of stuff. And they were talking about that. But in the course of about 20, 25 minutes, we went from us having, and I wasn't, I was watching, Shawn Lyness, one of our sales engineers, was doing this presentation, but he had the pendant in his hand, and about through the course of about 20 minutes they had the pendant in their hand. And then in about 30 minutes from the time they first arrived, we were standing back while they were welding parts.
Beth Elliott 3:29
Oh, that's fantastic.
Brandon Ellis 3:31
And they were talking about all the things that they can do and how they can apply it. And the takeaway for me was, as far as the success and it showed, you know, our mission statement, we empower our clients, but we judge our products based upon how it affects them positively. And not just how you know the quality of, general quality and that kind of stuff that most people claim for their products. And so, the fact that within 30, 35 minutes, they were not concerned about how to program the thing.
Beth Elliott 4:03
That's amazing.
Brandon Ellis 4:04
They were talking about how to apply it, and all the ways they can apply it. And we had test parts there. And so, they're like, well, let's try this. And let's try that and they were setting it up. And they did all kinds of different types of welds, we just had a ball.
Beth Elliott 4:19
They weren't worried about programming it.
Brandon Ellis 4:21
Right. And that to me fits with our mission statement. And that's largely why I'm so proud that we are, you know, one of the US representatives, the only US representative at this point, but we're bringing this product to the US, because it just speaks volumes about the product itself.
Beth Elliott 4:40
Yeah, yeah, it's pretty cool.
Brandon 4:42
Yeah, welding is always cool. You get to make fire and sparks. That kind of stuff.
Beth Elliott 4:48
I don't think this episode is going to be as fire-filled.
Brandon Ellis 4:56
No, not this episode... It's hopefully not doom and gloom. But why don't you go ahead and hit us with the title.
Beth Elliott 5:00
Okay, so today's title is “Industrial Automation - It Doesn't Have To… Be in Short Supply.”
Brandon Ellis 5:07
That's right. So, we have this global supply chain crisis that's going on. And this has been, if you don't know about this, you're living under a rock.
Beth Elliott 5:14
So, why is there a Chipageddon?
Brandon Ellis 5:17
Chipageddon, yeah. So, the supply chain crisis, you know, we've heard about it in a lot of different ways. So right now, we are coming up on the holidays, Thanksgiving here in the US. So, for those of you in Melbourne, we eat a lot of turkey, and ham, but they're saying we're gonna have a turkey shortage. And so, we've talked about labor shortages. And there's all kinds of reasons for that, that kind of stuff. But then all of that has played into this global supply chain crisis. But one of the things that is not labor, I don't believe is labor intensive, or at least, it's a smaller portion, you know, attributed to labor shortage, is the global semiconductor shortage. And so, I'll give a shout out to my mom, because I was talking to her about this, because it has affected us, it affected everybody. Yeah. Because anything, basically anything that gets a chip.
Beth Elliott 6:12
It could be your refrigerator.
Brandon Ellis 6:14
I'm holding up an iPhone. It has chips in it. And so, anything that gets a chip. So why, why is it all of a sudden? Because before COVID, you didn’t have trouble finding an iPhone, you didn’t have trouble buying a car, you didn't have trouble doing those things. So, what's caused it? And so that's really what my mom was asking me. So, what's the big deal about chips? Brandon, you're an electrical engineer, you're supposed to know about stuff like, semiconductors. And so, it kind of kicked us into a conversation about that. And so, the first thing was the why the demand all of a sudden. Well, that definitely stems from the beginning of the pandemic. I don't want to be myopic. And be just short sighted, short sighted. But my experience is primarily in the US. I'm not sure if it was similar and, you know, in Europe and Asia and down in Australia, and Africa and those areas, I don't know. But in the US, the first thing that happened was we shut everything down. Mandated shutdowns. Now, I know in Italy, they did the same kind of thing. That kind of stuff. So, everybody shut down, go home, don't come out of your house. You know, those kinds of things. But more importantly, school. Yeah, all the students had to go home, suddenly, and then all the employees went home. And it's a virtual learning extravaganza. And so, guess what? Every webcam, every computer, every microphone, every tablet, all those things, guess what's in them? There's chips. And so then also, coincidentally, for those employees that were working from home.
Beth Elliott 8:05
There's people that work. They work from it. I was very productive when I worked from home.
Brandon Ellis 8:10
I know you were. But there was also a spike in the video gaming industry. Everybody went out and started buying the new Xboxes and all this kind of stuff. And so, guess what's in those? Chips. And so, the last thing was, people were going out and buying smart TVs, because you couldn't go to the movies anymore.
Beth Elliott 8:31
You had to bring everything, all your entertainment that you would go out, you had to bring it home to you.
Brandon Ellis 8:36
That’s right. So, if you didn't have a smart TV, you couldn't watch Netflix and Hulu and all that kind of stuff.
Beth Elliott 8:41
Unless you had one of those casters.
Brandon Ellis 8:43
If you had one of those, but guess what's in there?
Beth Elliott 8:44
A chip.
Brandon Ellis 8:50
That's right. And so, there was a push for all these chips suddenly, not to mention folks didn't stop spending. And so, if you're not at work and it’s nice outside, you want to go out in a boat, go buy a boat, you know, well guess what? There's chips in boats. Go out and buy a new car, go out and buy this kind of stuff, get the truck you wanted, all this kind of thing. And so, there was just a very even, but intensified demand for things that have microchips in them.
Beth Elliott 9:20
Why can't these chips be turned around so quick?
Brandon Ellis 9:23
Why can’t we just make more? That's exactly what my mom asked me. Okay, that sounds fine. I guess I'll buy that. But why can't we just make more? Well, the reason is you grow a chip, a semiconductor.
Beth Elliott 9:36
How do you grow something that's manufactured?
Brandon Ellis 9:39
Well, first we grow it. So, you know the boards that you buy at the hardware store or the lumber store?
Beth Elliott 9:44
Yes, I can understand, that's a tree.
Brandon Ellis 9:48
So, the raw material is the tree, and you make boards from it. So that's manufacturing lumber. It's kind of similar to growing a crystal. Trees grow. And you can't say grow faster, tree, “Hello tree, I need you to grow faster”. If there's a lumber shortage, you're kind of stuck until you can find more lumber that's already grown, because if you're waiting on it to grow, you're gonna be waiting for a while. And so, crystals, silicon wafers, that's where the chip begins it's a silicon crystal. And so, crystals grow, just like snowflakes, you know. So, you've seen snowflakes with all the little designs. And if you haven't seen that, surely when you were a kid, you took a piece of paper and folded it up and cut little squares and stuff out of it, and then you pulled it out and it's a pretty snowflake looking pattern. That's a crystalline type structure. And so that happens in nature, it's physics. And when you get down to the physical level, it's going to happen at whatever speed the good Lord said it was going to happen. And so that's what's happening when we're growing crystals, which ultimately, once we have that raw crystal structure, we then can fabricate that into just like making boards out of lumber, they do a sawing process, it's a long process to create a wafer. And then from that wafer, they treat it a couple of different ways now, I mean, I've kind of have seen this done, I'm not an expert by any stretch. But ultimately, that wafer is what the chips are actually built upon that wafer. And so, it gets cut down even smaller and smaller and smaller. If you want to know what a chip looks like, pop the lid off something. Yeah, I'm looking at that board. And all those little squares and rectangles and that kind of stuff. Those are surface mount chips, and that's what we're waiting on. That's, you know, they come in different sizes and shapes. And they do different things. I mean, some are capacitors, resistors, and some are actually microprocessors, CPUs, and so some do Bluetooth, some do cellular 5g. And that's, honestly the Bluetooth and the GPS and the 5g connectivity and stuff that we've come to love and depend upon it. Yeah. That's the reason you can't find an automobile right now.
Beth Elliott 12:09
Because it's all incorporated into the vehicle.
Brandon Ellis 12:13
In talking about this, we've actually got some videos. So, silicone basically starts as sand. We got a little video here that we borrowed from the good folks at Intel, but kind of shows real quickly. We take the sand and we heat it way up, and it becomes molten. And so that then is inside of a crucible or some type of a furnace. And then we draw that out...
Beth Elliott 12:50
What is that thing there?
Brandon Ellis 12:51
That's the ingot. That's the raw material. And then we saw that into individual wafers. Yeah, so this is a good little simulation of that.
So, you end up with a round wafer, and then that wafers gotta be, I mean, it's got saw marks, it's having to be taken care of, it's got to be polished, all this kind of stuff. And then ultimately, they coded a couple of different ways. They did this really cool stuff. That's where you see the folks wearing all the cleanroom suits and the outfits and this is top, top, top cleanroom environment. So, cleanroom means no dust, no debris, no foreign material whatsoever. No fingerprints, everything, you know, everything's the way it needs to be, probably even humidity controlled for static and that kind of stuff. And so that's a good example or illustration of how that's made. You got a different video as well.
Beth Elliott 13:45
Yeah, I do. Let me get that one. Un momento por favor.
Brandon Ellis 13:49
Go ahead. Okay. So, growing the ingot is really cool. But that's something that takes a long time. So, in that little illustration.
Beth Elliott 13:59
I'm just gonna pull this one over. Because I don't think you could see the whole thing. Okay. Let's see. There's the crystals. Right?
Brandon Ellis 14:06
Yeah. So, the crystal’s there in the middle. Go ahead and start it there. Yeah. So, they're just moving those around. They're heating those up, those are going to be... that’s like the sand in the illustration that we did, okay. And so, keep going. And so, that's going to become molten. And then we're going to, we're going to apply a little tip in the end of it. And it's according to what you're making. It's according to the size, the shape, the geometry, the complexity, but it's going to be pulling that out. Now, this is a time lapsed, I believe, because it's coming out pretty quickly.
Beth Elliott 14:36
It's like making a candle, right?
Brandon Ellis 14:39
Yeah. If you've ever been to pioneer days or heritage days, the way you used to make candles...
Beth Elliott 14:44
Did you make them in elementary school? I made candles in elementary school.
Brandon Ellis 14:48
You did? I tried to make a candle once, but it didn't come out really well, but I didn't have a lot of patience either. So yeah, go back to that. Back it up to where it was drawing it out. So, there you can kind of see the ingot coming down. So that's what the ingot looks like once it's cooled down, it's kind of a black material. But what we've done, what they do is they draw it out. And so, they, it's according to how they're doing it, they may spin it some, but they're drawing it out ever so slowly, kind of like dropping that wick into the hot wax, and then pulling it out. So, you can see it kind of pulling out there, you can see it spinning. Sometimes they spin those. And again, that's according to the type of manufacturing you're making. Whatever you're making. And so, that’s the whole machine that’s drawing it out. And then once it gets done, then you can see they're lowering this back down. That’s what the ingot looks like.
Beth Elliott 15:36
Okay, I think we've got pictures of those.
Brandon Ellis 15:39
Yeah, bringing those over. And so that's why it takes so doggone long, it’s because you gotta make that raw material ingot.
Beth Elliott 15:48
I will get that over there. Yeah, yeah, my picture, my side-by-side picture isn't working out. Doggone it, I still have some work to do on this.
Brandon Ellis 16:06
Okay, so enough about that, you can kind of see how it's done. So, so for those of you who don't have the video, we're inserting a I don't know what they call it, some type of, they call it a probe or something. But that goes into this molten material. And it begins to slowly, slowly draw this out. And this process could take anywhere from one week to a month to build that ingot. Alright, so um, are we going to talk about that stuff yet? You’re just having fun.
Beth Elliott 16:34
I’m just clicking away over here.
Brandon Ellis 16:39
Beth's got the mouse in her hand. I have the sound effects here, so I can do all my sound effects. Beth is producing the video. So anyway, it keeps it changing. But it can take one week to one month. And it really comes down to the quality aspects, the size, and just the general complexity of what that ingot needs to look like. And then they've got to do the sawing and the polishing and all that kind of stuff. And now they’ve created the base, the wafer, and then you got to print the circuits on there according to what they're going to be. Are they going to be resistors, capacitors, microprocessors, what? And then that gets sawed up into little places or little pieces and then it gets placed, you know, it's ready to go be placed on the board. And so that whole process can take up to three months.
Beth Elliott 17:31
That's incredible. No wonder it takes a while. There's also a cost involved, isn't there?
Brandon Ellis 17:37
There's nothing cheap. But yeah, it's a very costly process. My mom said, “Well, Brandon, you're smart. Why don't you just do that?” Yeah. I don't have the money, first of all. We don't, we probably don't have, I don't have the skill set. But I can do the motion.
Beth Elliott 17:58
Yeah, I've read. It's not rocket science. It's much more difficult. That's what industry insiders say.
Brandon Ellis 18:04
Well, I mean, because you think about it, you're looking at, you're looking at physics, you're looking at chemistry, you know, all these things come together. Because the chemistry says and the material science says this is how we'll grow the crystal, the physics says I need to do it in a controlled way to build the ingot. If you go too fast, you break it off, so it breaks prematurely or you may have fractures, you may have all this kind of stuff. And suddenly, portions of all of that ingot that's taken three months or a month to grow is not useful. It's like a piece of lumber that once you cut it into a board, it's got a crack, you know, it's got a crack down the middle. And so now you really don't want to use it. So, you have to cull it. Well, if it took three months to get to that board, it's an expensive board. And so, it's not for the faint of heart. Most of our chips come from Taiwan.
Beth Elliott 18:57
Yes. I was reading that there. I think there's three major companies that provide chips.
Brandon Ellis 19:08
But Taiwan is the leader, the Market Leader. And Intel, I read recently is looking into… I don't know where they're gonna put it.
Beth Elliott 19:17
Arizona, it's going to be two US plants there. They've announced plans to spend $20 billion to make two plants in Arizona.
Brandon Ellis 19:30
So that'll help.
Beth Elliott 19:32
Yeah, it will, but it's gonna take a little bit. Now. I was also reading where even if you invest all this money in five years, that it's going to be obsolete, that technology is going to be obsolete. So, it's really hard to justify spending that much money and then it's going to be… you gotta keep on changing it every five years. But I don't know. So, I also read where they have to run 24/7, the chip plants do.
Brandon Ellis 19:57
Well, you can't turn it off. Once it's molten, you can’t say okay, just turn the heat off. And you need to be watching it just because honestly, you don't want to, you don't want to lose any time. So, if there's something that does happen, if something does happen to the ingot, during that growth or during the sawing or something, because the sawing is not fast, it's not like that, that. Yeah, it's a slow process. And if anything happens during that, you want someone there to go ahead and arrest it, restart it, do something, or maybe even try to save what's there and keep it from further damage?
Beth Elliott 20:34
Oh, can they?
Brandon Ellis 20:35
I don't know. I don't know, I assume. They're pretty smart people to be able to do it to begin with. But you know, what you don't want is you don't want waste. You don't want to do all that work, and then have to throw it out. And so, it's hard to do that in a lights off factory.
Beth Elliott 20:53
How long do you think the chip shortage is going to last? What have you read? I've read 2022 and 2023? It just depends who you're...
Brandon Ellis 21:04
Well. Okay, so. So again, let me just say, I am not an expert on any of this stuff that I'm about to say. But what I've read is apparently, there's different types of chips as far as thickness. And so, the automotive industry has chosen as a standard, one thickness of chip or something. And then also, I should call some friends of mine who do Service Mount Technology... They probably know this. So, there's different thicknesses or types of chip.
Beth Elliott 21:38
Yeah, yeah, they layer the stuff on it…
Brandon Ellis 21:41
Well, the board is layered on a silicon board, and that's what the chips are going on. So, that's where you have your traces and stuff like that. But when you're making the chips, how you saw them, when you're sawing them that wafer thickness is what I think they're talking about. And so, apparently, automotive uses a different thickness than your iPhones and your PCs and stuff like that, general consumer electronics. And so, my understanding then is, and I don't know if one's better than the other, maybe I don't know. But because of that, you have more people, there's more production of commercial grade chips with one… that thickness, whatever that thickness is, versus what the automotive folks are using. And maybe it has to do with the fact that you’re sticking a chip in a car, man, that's a lot different than your iPhone. Yeah, it's got to sit outside in the cold, it's got to be in the desert heat. It's got to be in water, and rain, and all this kind of stuff. So, there's all these environmental things. And granted, those things are put in different places, but your humidity levels change a lot more in your vehicle than they do inside, say your home. And we all know what happens if you change the humidity level of this too much [iPhone], you end up with a new one. So, if you drop this in the water, if this one goes into a mud puddle or crashes through the stream, it’s probably not going to work anymore. Maybe some new ones, yeah. But you understand what I'm saying. It's apparently a different grade of chip. And so therefore, it's been said, what I've read is that the automotive shortage is going to last longer, because of that, then perhaps what we would see with the commercial type.
Beth Elliott 23:25
So, is there a fix for manufacturers? Have you seen anybody that's done anything different that’s been successful?
Brandon Ellis 23:31
Well, okay, so let's talk about the worst one, and that's automotive. And you can pull your graphic over now.
Beth Elliott 23:37
Okay, finally.
Brandon Ellis 23:39
So, explain this graphic to me.
Beth Elliott 23:42
This is the US auto sales, and it's quarter three of 2021 versus quarter three of 2019.
Brandon Ellis 24:08
So, we just came out of Q3 2021. So, this is now, and who's at the top of the list?
Beth Elliott 24:13
It’s Tesla.
Brandon Ellis 24:15
Okay, so where's everybody else? I read about Ford, Ford's down. Tesla is absolutely at the top. So why do you see that? Why are they so much more? I read that Ford is down 27% year over year, 27%. I think?
Beth Elliott 24:38
Yeah. Well, the US auto sales as a whole are down 22%. Yeah, they're probably within that range.
Brandon Ellis 24:47
But the only reason they're not higher is because look at that Tesla one. Tesla is up about 25% year over year. Yeah. And why, so why is that? So, what can we learn from Elon? Mr. Musk, what we can learn is that he has done some things that maybe the bigger ones weren't comfortable doing. Or, they didn't happen to own a SpaceX with...
Beth Elliott 25:16
That’s true. With rocket scientists.
Brandon Ellis 25:19
Kind of a mind trust there. I don't know if that's how he did it. But what Elon did was Elon decided… because everybody has orders. There's no shortage of orders.
Beth Elliott 25:30
No, because even the car commercials are saying, instead of come buy, come in and buy your car, order your car.
Brandon Ellis 25:37
Order your car, do pre orders. Because they're assuming this is gonna go away, and it will go. The question is when. And so, but Elon didn't want to wait. And so, there were a few car companies that went out there as soon as they saw it coming, they went out and did bulk purchases and tried to grab all the chips they needed and all this kind of thing. And now they're actually starting to run out. But Elon said, Okay, guys, he pulls in all of his brain trust, and says, find out what chips are available. Because okay, so there's a mom question. Well, Brandon, why can't you just use another chip? Yeah, you know, there's, there's Lay's, and there's Doritos. Chips. She didn’t say that. Now, why can't you just use another chip. And the problem is, is each manufacturer, a chip manufacturer, especially if you're talking about embedded type controls, and CPUs and processors and things of that nature, you know, more than just capacitors and resistors. If you're trying to run your software, we call that firmware, trying to run your firmware on that each one may or may not support your firmware. And so, what you would have to do is you’d have to rewrite the firmware, which is a very costly and involved process. It'd be like Bill Gates with the Windows operating system, having to rewrite Windows to run on a different, you know, not run on Intel, but to run on something else. So, they would have to rewrite all their systems to do that. And that's quite an undertaking. Well, that's what Elon did. That's what Tesla did. They took that undertaking on and they went out and bought chips that were various types of chips and rewrote their firmware to make sure it would operate on any of these chips that were available and begin to bring those into the cars. And so, they were able to...
Beth Elliott 27:22
Bring all that in house.
Brandon Ellis 27:25
And meet the demand. And I'm sure they picked up some new customers.
Beth Elliott 27:30
Oh, yeah. So, I was gonna show you, this is the graphic of their sales. So yeah, wouldn't that be nice? Yeah.
Brandon Ellis 27:37
What you see here is, you see, I hope you see is if you're in manufacturing, it doesn't matter what your manufacturing, there's hope. Right? Because if they can do it, you can do it. And so that's what you need to keep in mind. Let's talk about that. Let's talk about who's using what Elon did to make this happen.
If you're a machine builder, and that's who we relate to, is machine builders, systems integrators and helping them to succeed. Yeah. How can they go about doing this? And so, there are...
Beth Elliott 29:05
I was gonna ask you first what manufacturers are waiting on?
Brandon Ellis 29:11
You mean the end users? Well, that's what I think end users are waiting on, just like machine builders and systems integrators. And elliTek, I mean, we are waiting on... We have a whole list of orders that we're waiting on one or two components that are in short supply because of semiconductor shortage. And so, it's affecting everyone. Yeah. So, what you gotta do is you got to figure out other options. And so, whether you're, excuse me, whether waiting on robots, servo motors, there's a steel and aluminum shortage. And so that's what people are waiting on. That's what's keeping them from taking the next steps, completing the projects they're working on.
Beth Elliott 30:00
So how can they overcome that? How can they get past that? What are their alternatives?
Brandon Ellis 30:05
You can, I would say, look at Elon. Learn from Elon. And that's what we have done. And so, we have gone through, worked with our specific partners to actually figure out where they're, you know, what steps are they taking, for example, we talked about, just mentioned aluminum. So, we do aluminum extrusion. So, it's a T slot framing that we use, and we sell. And so, a lot of our machine building customers and systems integration customers and end users use it to build machine frames and guards and stuff like that. But aluminum is in short supply for those that did not manage it well. And so, our partners have managed it well. And the first thing they did was they said no bulk sales, no bulk orders. And so, some of the other folks, I think, when someone got the indication that there was going to be a shortage, it’s just like toilet paper all over again. They just went and bought it all. And it just played out all their billet and just like ingots with the silicone, aluminum comes in what we call an ingot or a billet. And so that's what's melted down and extruded, you know, pushed through the extrusion machines and made into this extruded aluminum. And for us, the bulk salels were eliminated. And so, we were able to manage the billet. And so, what do we do instead? Yeah, we do an engineered type kit, so everything has to be kitted. But that means, honestly, when you get it, it's going to be machined, cut the length ready to go.
Beth Elliott 31:39
Wouldn’t that take longer to get it?
Brandon Ellis 31:43
Well not compared to not having a billet. But we can, because we're managing it all we can get aluminum kits to, to anyone in usually one to two weeks. It's huge. And everybody else I'm hearing 10, 12 to 20 weeks. Some have been that bad. And so being able to do that is really a testament to the partners and the folks that we work with. So that's, that's aluminum.
Beth Elliott 32:13
What but what other metals?
Brandon Ellis 32:16
Well, there’s steel. We represent Nidec Shimpo, servo gearboxes, and they do also just standard gearboxes as well, but we use them a lot for our servo gearboxes. And they're managing their materials very well. And so, we can get gearboxes in a week, two weeks, if it's a complex or, you know, an abnormal gearbox or ratio, then it may take a little longer, but that would take longer anyway. So, for a standard ratio, standard servo for standard servo products, you know, we can probably get that done in one to two weeks, maybe less. And of course, it's through our systems group, we can ship that anywhere in the globe. But then we also usually put that with something else. So, Hanwha Robots. We don't stick gearboxes on those. But our robotics, Hanwha, is keeping everything in check. They're doing a great job so we can get, we can get robots in, you know, three to four weeks. Now, normally, we could get them shorter than that.
Beth Elliott 33:24
Yeah. But there are some places where the robots are...
Brandon Ellis 33:28
I heard of one the other day, a customer was quoted 75 weeks.
Beth Elliott 33:33
That's a year and a half.
Brandon Ellis 33:37
On a robot. 75 weeks.
Beth Elliott 33:39
Oh, wow. And you can get a Hanwha within four.
Brandon Ellis 33:47
Well, now granted, you know, that robot would carry a lot more than…
Beth Elliott 33:53
Oh, the payload. Okay.
Brandon Ellis 33:54
Actually, no, I'm sorry. It's not true. It was a collaborative robot, just like the Hanwha. In fact, that’s what I guess I told them as you bring that up. I was like, “Hey, we can take care of you right away”. And so, but yeah, I mean, it's a testament to how bad things are getting. And from a logistics standpoint, it doesn't have to be, but you need to choose your partners wisely. So, the ones that have kind of prepared for this, who have been, you know, they've taken the steps to make sure that they can still meet demands, kind of taken whether or not they took a note from Elon himself or not. That's what they've done. And that's what we've done. Our IIoTA product, we have ample stock for the IIoTAs. Now, I can't say that that's infinite. But if you need an IIoTA, one of our MES Appliances, we can ship it, you know, in less than a week. We're on normal deliveries on those things. And so, you know, we've managed that well. And so, I would encourage end users and manufacturers to take that into account.
Beth Elliott 34:57
To find other sources.
Brandon Ellis 34:59
Other sources.
Beth Elliott 35:00
Yeah, so speaking of other sources in the semiconductor industry, what about motion control and servos? We're gonna have a special guest on to tell us about that.
Brandon Ellis 35:12
So, let's get to that right now.
Beth Elliott 35:15
Yeah, so we've got Jon Fields with Yaskawa, and Jon is the Senior Motion Sales Engineer. Hey, Jon, how are you doing?
Jon Fields 35:30
I'm doing great Beth, how are you?
Beth Elliott 35:32
I'm doing fantastic.
Brandon Ellis 35:33
Hey, Jon. Hey, so I appreciate you joining us today, Jon. So, we work a lot with Jon. He's our rep for Yaskawa Motion here at elliTek. And so, Jon, what we're talking about today is the global supply shortage, specifically semiconductors, and more importantly, manufacturers such as Yaskawa that have taken steps to kind of overcome this shortage and are continuing to do so today. What kind of things, in your opinion, quickly, is Yaskawa doing either traditionally, or, you know, currently, that's helped overcome this stuff? Because I know you have got stuff on the shelf.
Jon Fields 36:11
Sure, sure. Um, you know, historically, Yaskawa America has maintained a fairly significant volume of inventory in our Buffalo Grove, Illinois distribution center. So, we have kept roughly $65 to $70 million worth of inventory, spread across motion control products and VFD products over the years in that facility, and over the past couple years, we've worked closely with their demand planning group to increase that volume of inventory. So, we're now closer to $85 million to $90 million worth of inventory. So that's really helped us weather some of the logistics issues that we've seen from some of our competitors, and even some of our partners that have run into some of those problems. So, keeping that inventory on the shelf, that's helped us really get into places that we may not have had an opportunity to go into in the past because we do have product available.
Brandon Ellis 37:17
Well, and I know that Jon’s main product line within Yaskawa is the motion, the servo, what we call motion control products, servo motors, drives, linear motors, the large linear motor product, and not so much the VFDs. Do you know, and I'm asking, putting you on the spot, what the status is with the VFDs, I'm not as aware of that?
Jon Fields 37:43
There have been some further delays with the VFD product line. Again, I don't work as closely with that group. I know we've had to do a couple things where we've had to add some surcharges for some products, you know, when you get into some of the larger VFDs, and actually some of the larger motors. Some of the components are a little more difficult to come by you know, with metal shortages and semiconductor shortages and things of that nature. But from the motion control standpoint, we really haven't had to implement any drastic programs like that, where we're adding surcharges or, you know, having to extend product delivery. So, most of the, what we consider our stock items, our motion controllers, our Sigma-5, Sigma-7 product line, most of those products are also what we consider stocking items for us. So, like I said, we've traditionally kept a large volume of those products on the shelf. So, at any one point, you could, you know, call up and say I need a 1kW servo motor, and we may have up to 100 of them available on the shelf, so that’s been key for us.
Brandon Ellis 38:57
We've seen that. I mean, I know personally, we've had customers, elliTek customers, of course, this podcast goes out to a lot of folks, but for the East Tennessee region, and of course through our systems group, we've talked about how we can go even outside of that when we start putting systems together. But we've had customers that were basically in a quandary with competitive brands of servos, and we've been able to go in with the Yaskawa and get them up and going and because of that good management, I call it, of product on the side of Yaskawa. Well Jon, I appreciate you kind of giving us a little insight and adding some validity to what I was saying, to what Beth and I were claiming, so it's good talking to you as always.
Jon Fields 39:46
Absolutely. Good talking to you and Beth as well. And I appreciate the opportunity.
Brandon Ellis 39:51
All right, we'll keep selling Yaskawa, y'all keep stocking it.
Jon Fields 39:56
Will do. Thank you. Thanks, take care. Bye.
Brandon Ellis 40:00
That's good to know, isn’t it?
Beth Elliott 40:02
It is. Jon's full of great information. He’s a blast to have around.
Brandon Ellis 40:07
Yeah, and Yaskawa is such a great product. We've been using Yaskawa for a long time. And again, through our Systems Group, even if you're in Melbourne, Australia, we can take care of you. If you need MRO, spare parts like that and you’re in our region, we can take care of you on that. Definitely through our Systems Group, motors and drives together, coming through our Knoxville Systems Group, we can take care of a lot of things for you. And they're in supply. And so, if you're waiting on something else, and this is not a sales deal, but this is just reality, if you've been waiting for a long time and you're hearing, you know, these kinds of things, you can be Elon.
Beth Elliott 40:45
Be proactive and look at other places. And there's another one of our partners. So, it's LinMot Linear Motors.
Brandon Ellis 40:53
LinMot Linear motors. And another product that I just absolutely love because linear motors are cool. Now, Yaskawa makes linear motors; they make really large linear motors. LinMont makes smaller linear motors, and so we use them to replace a lot of pneumatics, and a lot of electrics where you need high speed, high thrust, high acceleration and that kind of stuff. And so, today, we're going to also have a special guest.
Beth Elliott 41:16
Yes. Another guest we have with us today is Peter Zafiro, the General Manager with LinMot USA. Hey, Peter, how are you doing today?
Peter Zafiro 41:25
I'm doing well and enjoying life.
Beth Elliott 41:29
Awesome. Awesome.
Brandon Ellis 41:30
Good. Hey, Peter, this is Brandon. Thanks for joining us today. So, Peter’s on the road, always on the road. Always getting it done. Is that right, Peter?
Peter Zafiro 41:37
Yeah, that's the major part of my job description for sure.
Brandon Ellis 41:41
Yes, yes. Yes, you do a great job. So LinMot Linear Motors, a partner of elliTek, one that we've known for many years. What we're talking about today is supply chain crisis, specifically, with global semiconductor shortage and steps that companies have made to kind of overcome the shortages. We talked about Elon Musk at Tesla, and how Tesla, you know, experienced a 25% year over year growth, whereas all the other competitors were like 25%, down year over year, and by doing some kind of things. I wanted to talk a little bit about LinMot. I know LinMot has not had the delivery issues that many of its competitors have had across the last few months. What steps has LinMot taken and will continue to take to overcome these issues especially with semiconductors?
Peter Zafiro 42:38
Some steps are no different than what we normally do. We have always bought for large production runs. If you will, you can call us the anti-lean manufacturing company.
Brandon Ellis 42:55
Anti-lean. Right, yeah.
Peter Zafiro 42:56
Because when you’re lean you buy as little components as possible. You have your supplier provide you components on a weekly, in some cases daily basis, so your work in progress is as low as possible. Of course, that makes the bean counters happy. However, in a time of crisis, or supply chain disruptions that we see now for close to six months now, it's been pretty tough, and semiconductor chip shortages are real; it is happening. The difference with us is we purchased semiconductors for a year's worth of production, and we continue to do so even in today's elevated prices. Because this is how we do it. You know, we run our company on large batch production runs that are built to sub-assemblies. And then we do final assembly, and with drives and motors we do our final QC and motor testing, drive testing, firmware burn-in, flashing the firmware all that is done then in small production runs. But the major, if you will, the major components are built off of inventory on a large volume of semiconductors that we have in house or at our suppliers’ installations.
Brandon Ellis 44:26
So, more of a buy ahead kind of model.
Peter Zafiro 44:30
Well, you know, we can't escape the disruptions that are happening right now. We are doing exactly the same that Tesla is doing as well. There are some semiconductor components where we anticipate seeing disruptions and what we're doing is exactly what Tesla's doing. We're redesigning boards, redesigning PCBs, we are looking at using substitute microprocessors or semiconductor chips in some of our… like for instance, in a network capacity, there's a huge demand now for network chips. So, we are second sourcing or triple sourcing some of those components in some cases that requires changes in firmware and a lot of testing. Puts a lot of pressure on our production engineering group, but it's the only way to stay ahead, if you will, to be able to produce low lead times.
Brandon Ellis 45:35
Well and make no mistake, Tesla's bunch, Elon has been working them hard to rewrite firmwares and do kind of the same thing. So, yeah, it's a strain on engineering, but it's what you have to do. That's exactly right.
Peter Zafiro 45:50
I think that companies that were subscribing to this ultra-lean production environment really have to think about, in the future, how do we deal with disruptions in the logistical supply chain. Which is now happening daily? You know, there are daily calls coming in, oh, this is not going to be delivered on time. If you're depending on this shipment to keep your assembly line running, what do you do? You know, what happens when it doesn't get delivered a second day or a second week? Or a second month? This is reality.
Brandon Ellis 46:30
Yeah. And it's a new reality, unfortunately, that I hope that unfolds soon. You know, the port shortages, labor shortages, there’s steel shortages, there's a semiconductor shortage, and there's even resin shortages that are affecting a lot of folks. But you're exactly right. So, the fact that LinMot, right now, I mean, as of today, here in the US anyway, I feel like that, that the deliveries, the lead times on the shelf product is close to maybe an extra week or two but nothing, nothing way, way unreasonable for getting product. Is that still the case?
Peter Zafiro 47:06
You're correct. I mean, we're running in that three-to-four-week lead time for off the shelf products that normally we would call off the shelf. Normally it’d be one or two weeks, we're now running three to four weeks. The volume is higher. There's no question. We're having a record year. You know, there's a couple of reasons. People are using our products to substitute products they can't get. That is happening. We see that. There's also, you alluded to the resin shortage, we know there's going to be issues there down the road, and we're working hard at developing second source vendors, triple sourcing vendors. But still this supply chain crunch isn't gonna go away, like tomorrow or next week, or maybe not even by the end of this year.
Brandon Ellis 47:55
Well, many are saying unfortunately, that it's going to go well into Q1, Q2, some are even saying Q3 of 2022. So now that crosses a lot of industries and a lot of segments, right, so we have to be reasonable on that. But, but it's certainly great to hear that, you know, and that's what I love about LinMot, about your leadership there, and just the company's leadership on the whole, is just the awareness and to be able to jump in and make those changes. It just speaks volumes about your all's dedication to the product and the quality of the product, but also just you know, the success of the company in and of itself. So, we appreciate that.
Peter Zafiro 48:37
Thank you. Thank you for supporting us.
Brandon Ellis 48:41
What I heard you say was, if you need a small linear motor, you need to do two things. First of all, you need to check out... What's the website? linmot.com
Peter Zafiro 48:57
linmot.com is the website. And you can also get to the usasales@linmot.com email if you want to just email your specific application or even just general data, we will have one of our technical sales engineers get back to you. Of course if you’re in the great State of Tennessee, I think they need to contact you, Brandon.
Brandon Ellis 49:23
That's right. Yeah, that's right. That's the number two thing, is call elliTek. And go to our website, of course, Beth has a beautiful LinMot landing page. So definitely, if you're in our region, we are a partner with LinMot. And so, we're here to help as well. With our systems group, if we're combining it with other things, certainly we can go outside of Tennessee. But yeah, but it sounds like if you need linear motors, now's the time because there may be some things, some other things affecting because you just don't know. And that's the problem with this supply chain crisis. You don't know if it's going to be due to steel shortages, resin shortages, labor shortages, semiconductor shortages or shortage of something we haven't even thought of yet. You know, they say there's going to be a turkey shortage come Thanksgiving. Have you heard of that one?
Peter Zafiro 50:15
I know the prices are going up at the grocery store, so nothing surprises me.
Brandon Ellis 50:20
Well, I’ll tell you, a ribeye steak, this is my world, a ribeye steak costs more than a restaurant if you buy it in the grocery store right now. So, yeah, things are getting all crazy.
Peter Zafiro 50:34
Definitely. Yeah. I mean, it's just this is the real world we live in, right?
Brandon Ellis 50:40
Yeah. Well, listen, Peter, I appreciate your time. Thanks for joining us. I know you're on the road and traveling. So, thanks for taking a few minutes.
Beth Elliott 50:48
Thank you, Peter.
Peter Zafiro 50:50
Thank you, Brandon. Thank you, Beth. Have a great day to everyone.
Brandon Ellis 50:55
Yeah. Thanks. So LinMot. That's an awesome product line for us.
Beth Elliott 51:02
Yes, and Peter is full of great information, too.
Brandon Ellis 51:05
And so, they're just monitoring their stuff. They're just being good stewards of what we need. You know, they're a little bit, they may be on some things a little bit longer than they were before, but just like everybody else, but man, they're not 10 weeks, 20 weeks, 60 weeks. It's nothing like that. And a lot of people are, and hey, I'm not sitting here trying to, you know, put us on any pedestal we've got some other things, some other parts that we've been waiting on, that we've been waiting on since May. And so, it's a real deal. Not everybody's doing this. So, if you're facing this as a manufacturer, you're not alone. It’s no fault of your own. This is a global crisis. But our goal is to give a little bit of light at the end of the tunnel, to say here, here's the way you can see it through. And honestly, if you're not familiar with great product lines, like Hanwha robots or LinMot, or Yaskawa Motion Control. There's three right there, that will absolutely, that'll be your specification. If you go that route, that'll be your specification going forward. I guarantee it.
Beth Elliott 52:13
I know you wouldn't pick a product that you wouldn't stand behind anyways.
Brandon Ellis 52:17
That's right. Well, we try not to, but I’ve got a lot of history with those. And so especially with the Yaskawa and the LinMot, and I'll tell you, I think they're second to none. And we know them well. And we've had a lot of successes with them. So not all doom and gloom?
Beth Elliott 52:34
No, no, and it doesn't have to be in short supply.
Brandon Ellis 52:38
That's right. There's a way out. So, thanks for joining us today.
Beth Elliott 52:43
That’s right, thank you.
Brandon Ellis 52:44
We've had all kinds of video stuff. Beth is doing her thing. And then we've learned a little bit about how silicone ingots are manufactured.
Beth Elliott 53:01
Let's, let's get a picture of those wafers again.
Brandon Ellis 53:04
You want to see the wafers overtop. Okay. Then what you can do to possibly kick the can on down the road, so to speak, and not be in you know, feel the grasp of this crisis, especially if you're a machine builder, systems integrator, or if you're an end user that, you know, got those capabilities in house. These are some examples of products that you can do. And these are just a few examples, you know, start asking the questions. Don't be afraid to look outside of your normal box of parts. It may change plant specification, but that's not a bad thing. Sometimes change is good. And the salesperson in me will tell you, especially when you’re talking about servo motors and drives, if your spec is not Yaskawa, you should really think that one through. Because you know, Yaskawa of course, can hang right underneath a Rockwell system; it can hang right beneath an Omron system, any EtherCAT drive, so Beckoff, any of that kind of stuff, can drive, and you get the you get the motors and drives that are top notch, and you don't have to worry about them, and they all come together and they're not in short supply. And then you take it from there. And so changing plant specifications is, not a bad thing. Give us a call and we can help you do that. So elliTek is 865-409-1555. And our website is www.ellitek.com. Of course you can find us on Facebook, Twitter, Instagram, LinkedIn, and our YouTube channel.
Beth Elliott 54:43
Subscribe to our YouTube channel, so you can get updates on this as well as some fun videos that we put up as well.
Brandon Ellis 54:51
Like, like, like, like, like, five-star rating. Those things help us, they get us, they help Beth with what she does and work so hard to do to keep us in the top sections of all those podcast streaming apps and all the magic that she does. So, Beth, thank you very much for being a wonderful videographer.
Beth Elliott 55:12
Yes, we're getting better.
Brandon Ellis 55:16
Here we go. Yeah. Congratulations.
Beth Elliott 55:21
Thank you for your time and the knowledge about the chips and growing silicon.
Brandon Ellis 55:26
It’s just a little bit of knowledge but it impressed my mom. She felt good about paying for my education. Alright everybody have a great time. We'll be back in another two weeks with another great topic.
Beth Elliott 55:44
Yeah, that's right. Thank you, guys.
Brandon Ellis 55:46
See you, Beth.
