as published in EBN Cost Drivers in PCB Production….or why China? by Thomas Smiley, President, Precision PCBS Most of our customers believe that the PCB is an uninteresting commodity. They imagine a long machine into which fiberglass and copper are poured and out pops a shiny 10 layer pcb, customized to their needs. This being […]Read More
The PCB fabrication industry is older than most of us still working. It is overdue for modernization. We have not seen any transformational manufacturing changes in the PCB bare board boards industry during the last 15 years.
What we have seen is the installed capacity moved to China. (It has been reported that 91% of global board fabrication now comes from Asia, with the vast majority from China.) This China move created a forced shift in how boards are purchased, and consequently created new demands in communication and logistics. Specifically, language, time zone, and cultural considerations. Bigger companies with China based feet on the ground could adapt easily, the rest of us had to learn new skills.
I am suggesting that the rest of us modernize and re-think our supply line strategy.
Some may remember the evolution of the electronic component industry. First the component manufacturers sold directly to OEMs, gradually customers and component manufacturers found that a better path was through a local distributor. Arrow, Avnet, Future, Digikey, and many others were born out of this efficiency. Today, it is an exception to buy directly from a component manufacturer.
PCB fabrication is difficult for distributors because every board is custom. Repeat, every board is custom. Custom equals high potential for error which equals close technical review is required.
So, buyers must go to China directly and slog through the variety of China sources. With this comes the multiple challenges of accountability, communication, logistics and culture. The most dangerous of the challenges is having picked a supplier who occasionally ( or often) sends subpar boards and provides no recourse or no response to your complaint. Do you really want to commit such a critical part of your BOM to the lowest China bidder?
The modernization of the PCB industry is not in processing, but in supply chain. A new category of value added distributor is evolving in the same way the component distributor evolved…to make things easier. We call it “Managed Manufacturing Services”.
Think of it as a value added distributor of printed circuit boards. This concept can greatly improve the supply chain for both the customer and the China manufacturer. But only if they really add some value.
What are the important values, and how does this approach add value?
Technical Support. The value added distributor must be your expert design reviewer, capable of counseling you and quickly fixing the errors.
Only technically trained PCB teams really understand the manufacturability challenges of bare boards. With the technology of new IC packages pushing toward smaller geometries, new thinking is required about designing for manufacturability. So, your value added distributor has to be technically trained to provide this service.
Communication. The value added distributor must be capable of clearly and cleanly communicating with a factory in a different country.
We have been working with offshore factories for a long time. We learned through hard knocks that developing a strong relationship with your counterpart in Asia is the critical key. I call it “Pitcher-Catcher”. Whether a fast ball or a curveball, the two communicate in one cohesive motion. This takes time to develop and not every factory gets it.
Time zones can work to your advantage. We pitch everything to China by 5PM Pacific and have answers at 6AM the next day. Your distributor must know the factory requirements well enough that only a few questions (EQs) come back, lessening the need for middle of the night conference calls.
Accountability. Your value added distributor must have carefully vetted and audited the factories they use. They must also be US corporations with financial accountability to their customers.
Slogging through a variety of factory options is not a good idea. Jumping from one to the next based on price and email pressure is also not a good idea. It wastes time and invites disastrous quality issues. Customers with little or no knowledge of what makes a solid factory are at particular risk….and most customers fall into this category.
So, if you have someone on staff with experience in this area, you can send them to China to visit multiple factories, but unless this person has in depth knowledge of what makes the difference between okay and fantastic….at the granular level, it is waste of $10,000. It takes deeply experienced people to see the difference. It takes board manufacturing experience.
From the China manufacturers side, it is just like the component manufacturers of old. It is much more efficient to deal with a small handful of companies who service the USA market than it is to staff and service everyone. The culturally smart ones are beginning to see this and actually do view us as distributors for them. It is a proven supply chain solution.
So, following the model of the component distributors, we can modernize this PCB industry. We can Improve efficiency, quickly adopt new technologies, and capture lower costs all by modernizing the supply chain. Welcome the Value Added PCB Distributor or as we call it Managed Manufacturing Services.