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Logging 3 Big Lessons From the Supply-Chain Crisis

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For the last two years, multiple industries have been severely impacted by a shortage of electronic components. Regula, as global developer of identity-verification solutions and forensic devices, has been no exception. However, since Regula provides financial institutions, the aviation sector and border controls around the world with solutions to help prevent identity fraud and contribute to public security, we could not put our work on hold.

So, how has Regula been able to remain operational during this crisis?

As the person in charge of all hardware-related aspects of the business, I oversee the initial design, testing and final production model. Our Regula ID verification solutions—forensic equipment, document reading and identification solutions—are employed at 80 borders. This achievement fills me with pride, but also entails significant responsibility. Over the years, I have faced several challenges that have taught me valuable lessons.

Alex Lewanowicz (Source: Regula)

Takeaway #1: Do market analytics

Given that our business involves a wide range of devices (around 30 different devices and multiple modifications thereof), some with thousands of components, we closely monitor the hardware market.

As certain components became scarce and pricier, we recognized a trend. Our stance has consistently been to maintain a sufficient stock of parts, enabling us to operate smoothly and meet our clients’ deadlines. This approach proved crucial during the crisis as we were able to keep production going and explore alternative supply channels without interruption.

Takeaway #2: Make room for flexible engineering

We initially believed the EMI chokes we required for our document readers would be a simple and widely available item. But we then discovered that not only had the price of the chokes risen from 50 cents to $10-$11, but it was also incredibly difficult to purchase enough of them to make adequate readers.

Moreover, the available options were incompatible with our printed circuit boards (PCBs) for the readers, necessitating a redesign. Even the smallest change in the PCB would result in a chain reaction of necessary changes in production, testing, documentation updating, etc. While the issue appeared significant at first glance, it was ultimately a challenge with a viable solution: a device redesign.

Our market research showed that not every other player in the market had the same opportunities as we did, since their hardware was constructed out of multiple pre-assembled modules that, in turn, contained several smaller components from third-party providers—some of which were no longer available due to the pandemic.

This made us realize that our strategic decision to control the development of all the components and modules for our devices instead of using larger, pre-assembled modules was the right move. Although this approach takes more time and resources to build a product, it provides us with almost unlimited flexibility to adapt to changing circumstances, such as the current situation.

Takeaway #3: Unification is beneficial

Last year, we gained invaluable wisdom while ensuring our devices were stocked in the required quantities: We often found ourselves with varying components in our devices that could have been unified.

As always, it is important to strike the right balance. To successfully navigate through the various challenges, such as a chip-supply crisis or even shortages of other electronic components, you must have the ability to change your devices to replace components that go out of stock. However, you must also use this opportunity wisely, so as not to find yourself in a zoo of devices with drastically different contents on their PCBs.

As of today, I don’t think there is a device in our product range that we haven’t touched in terms of redesign due to the crisis. As a result, we have been able to offer all our products to our customers and deliver them within a reasonable time frame, and some of them have even been upgraded in design.

Alex Lewanowicz is director of hardware engineering at Regula.

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