LED technology is rapidly changing: what was once used only for indicator lights in consumer and other types of electronics is quickly becoming the technology of choice for both general and specialized lighting applications. For example, growth in high-brightness LED lighting is expected to accelerate dramatically over the next five years, with a projected market growth of 31 percent for 2010 alone. This rapid transition has implications in terms of sourcing the right product from the right supplier.
LEDs are often thought of as commodities for which one supplier is essentially interchangeable with any other. While this might be true for indicator lights, the same cannot be said for LED devices intended for newer applications such as headlamps, interior lighting and back panels. These newer applications usually combine LED packages with drive circuitry, custom optics, and thermal management purchased as a single unit. For this situation, establishing a relationship with a dependable supplier is much more critical.
Common criteria
To help ensure that your organization is buying the right LED product, a set of requirements should be provided by your technical team as part of the Bill of Materials. Common criteria include lumen output (how much light the LED product emits), correlated color temperature (CCT - a measure of the “warmness” or “coolness” of a white light), color-rendering index (CRI - a measure of how faithfully the light reproduces various colors), and efficacy (the ratio of light output to power consumed). Other common requirements include ingress protection ratings and agency certifications (e.g. the CE mark). Depending upon the application, light uniformity may also be important.
As has been discussed before, the cycle time for ever-increasing LED performance, especially for white LEDs, is seemingly shorter each day. But more is not necessarily better and it is worth asking your design team which LED characteristics are critical to the application and which are more flexible. Frequently, savings can be realized by yielding slightly in some areas – for example CRI – in order to preserve performance in others, such as efficacy.
The next step in the sourcing process is whether to source through a distributor versus directly from a supplier. Here the biggest factor is the anticipated volumes. Distributors have advantages over suppliers of shorter lead time with less risk, but if volumes are high enough, it may be worth the effort to work directly with a supplier. If your organization has the capability to manage both the supply chain and the technology issues that invariably arise, significant cost savings can be realized by working directly with an OEM supplier.
Choosing a supplier
An example of the dramatic growth in the LED industry is the Guangzhou International Lighting Exhibition which featured over 1500 exhibitors from 26 countries in 2009. Many of these suppliers are, in actuality, “private-label” shops, simply affixing their own brand label to LED products purchased from an outside source. Thus, the first question to resolve in the qualification process is whether the suppliers under consideration manufacture their own product.
Once this has been established, other areas of inquiry include the obvious, such as number of years in the LED business, delivery management system, sales channel and any industry-level affiliations, such as the Energy Star program. An evaluation of each potential supplier’s process capabilities and quality assurance (QA) and reliability programs is also important. If a supplier is not among the top in the industry, a factory audit may prove well worth the time and expense.
There are additional areas of risk that should be considered, including the supplier’s overall business model. For example, a supplier tied too closely to just one or two major customers would be a greater risk since that supplier might not be able to survive a downturn in orders. Similarly, a supplier with only one manufacturing location would also be a greater risk as it would be very difficult to recover from a catastrophic occurrence at its facility.
Another risk that impacts all LED lighting suppliers is the increasing demand for LED chips, resulting in longer lead times and higher costs. Because of this, an understanding of the supplier’s relationship with their chip manufacturer(s) is essential.
One final consideration is the terms of the supplier warranty. The two failure modes experienced by LED products are lumen degradation (premature deterioration of the level of light output) and catastrophic failure (the LED ceases to emit light altogether). Ensure that the supplier’s warranty covers both these failure modes in terms of end user expectations and that return and credit conditions and logistics are clear and easily executable.
