Features Articles
Buy PCBs with your brain, not your heart.
“Pray for me. I buy circuit boards.”
That was a saying posted on the wall of a prospect I visited some 25 years ago. It’s funny, of course, but it also speaks to an unchanging truth about PCB buying: It’s often an emotional experience, especially when it comes to the bare board.
The PCB is the foundation of your products. It represents a good chunk – about 8 to 12% – of the cost of the bill of materials. While it is the first item needed to begin the assembly, it is usually the last item ordered. That alone can make buying boards stressful.
In my years selling boards and training companies how to buy PCBs, I’ve found it’s not a lack of knowledge about circuit boards that prevents buyers from leveraging their annual spend most efficiently; it’s misplaced loyalty or an aversion to risk.
Strategic conversations are key to sustaining existing business.
The current business environment is creating two significant challenges for mid-tier electronics manufacturing services companies at a strategic planning level. The first is program management workload. Material exceptions have become the norm, and program teams have become highly reactive to respond to changing program variables. Second, material constraints are causing OEMs to keep projects at their current suppliers and push out launch plans on new products. Taken together, planning for account growth beyond what is automatically going in the pipeline based on spikes in existing demand may not be a great use of program management time.
While it is unlikely a significant number of projects will be awarded in the short term, a lot of dynamics in the background make strategically assessing larger accounts an important activity right now. These include:
- The great resignation. While the media may have overhyped it, labor shortages are a reality, and people are moving around as a result. Do you have multiple relationships within each customer’s decision team? If you don’t and your key contact leaves, you will be building a relationship with someone who is viewing your company only from the perspective of the current market.
- Customer chaos. The challenges within OEMs are as great as those within your company. In that environment, they may not be thinking strategically either. Can your company provide services to help address resource shortages within their teams they are unaware of?
- Inaccurate capabilities perception. In a reactionary environment, decisions are made on the fly. In a long-term outsourcing relationship, OEMs can lose sight of the company their EMS provider has become, or assume capabilities are limited to those used in the projects that EMS provider is involved in.
- Growing dissatisfaction. The current market is causing suppliers at all levels to give disappointing news on a regular basis. While experienced supply chain management teams understand what is happening, less experienced personnel may not. If the bulk of program team communication is delivering bad news, or if the ball is regularly getting dropped on issues the EMS provider should be able to control, dissatisfaction levels may be high.
- Cross-company teamwork is high. Many EMS provider and OEM teams are working together closely. The relationships forged offer visibility into opportunities at a higher level than is usually found when team members trust each other.
Given the current workload, the next challenge is determining how this type of analysis can fit into busy schedules. Strategically analyzing larger accounts relative to the dynamics mentioned doesn’t need huge effort.
- Customer contacts. Make a list of the decision-makers you interact with at each key account. If fewer than three, develop a strategy to build a relationship with one to two additional contacts.
- Access what you know about the account. Are there opportunities for increasing the percentage of value-add in the account or growing into other divisions? What are this customer’s pain points? Do they have resource constraints in engineering or production you could help with? Would fulfilling to their end market help free up their team? Is your team doing everything possible to help them with alternate component identification? Has your team failed at anything lately, when they should have performed better, such as in quality, product validation, communication, etc.? Do you have a solution for anything your customer has casually mentioned about new projects or resource constraints? Is the customer aware of your current capabilities? In short, make a list of issues you think would benefit from a focused conversation.
- Address dissatisfaction head on. If your team has fallen down on an aspect of the project they should have been able to control, do an internal review, document the corrective action and present it to the customer as quickly as possible. OEMs forgive issues created by the current market, but they aren’t understanding when they feel internal processes are out of control. The result of this conversation may be improved customer satisfaction, or it may be the realization irreparable damage has been done. Either way, it puts you in a better position to assess next steps with this account in an environment of scarce resources.
- Educate, educate, educate. While it may seem difficult to have a strategic conversation in a reactionary environment, most customers are open to discussions that help solve their problems. An informational or educational approach centered on options for addressing specific pain points is generally welcome. This is also a good way to increase customer knowledge of capabilities or resources. A quarterly business review or similar periodic meeting is one path. If the customer is local, a lunch-and-learn session may be beneficial. If the customer is accessible by travel and open to visitors, a visit with a technical resource may be an option. Ideally, information should open the door to ways your company can better serve the customer and any associated divisions.
When a program manager is prepared, discussions on ways to align solutions more closely with short- and long-term customer needs become easier. Analyzing accounts for opportunities is one way to counter the continuous bad news on the materials front. This type of analysis also helps identify potential vulnerabilities and either address the issue or build the assumption of eventual business loss into the forecast. In the current high-inventory business environment, it is always a good idea to understand which accounts have growth potential and which are quietly planning an exit.
is president of Powell-Mucha Consulting Inc. (powell-muchaconsulting.com), a consulting firm providing strategic planning, training and market positioning support to EMS companies, and author of Find It. Book It. Grow It. A Robust Process for Account Acquisition in Electronics Manufacturing Services; smucha@powell-muchaconsulting.com.
Protecting modern-day, complex stencils requires a mechanism overhaul.
Ahh, understencil cleaning: a necessary – but challenging – aspect of the stencil printing process. I’ve certainly discussed cleaning in this space before, as the topic bears revisiting when things change. Now is one of those times. As a subprocess of the overall printing operation, understencil cleaning is employed at specific intervals – after “x” number of prints, as determined by the process and the product details – to clear the aperture area of solder paste. Left unchecked, there is a high probability any smear around the aperture will cause defects. This is especially true if printing anything close to microelectronics-level dimensions such as 0402s, fine-pitch BGAs, etc. With these conditions, the likelihood of bridging, solder balling or some form of defect is relatively high without a robust understencil cleaning regimen. To maintain a centered, high-yield process, thorough cleaning of the underside of the stencil between prints “as and when” is required. (There is no standard, “right” number.)
These facts have not changed in many years. What has changed are PCB designs, dimensions and electronics assemblers’ expectations. As we are all aware, miniaturization has driven stencil thicknesses down to an almost unbelievable 60µm for today’s mobile products. That’s thin! Modern-day stencils are highly complex tooling components with many tens – if not hundreds – of thousands of apertures cut into a paper-thin piece of stainless steel. The material is delicate, to say the least. With these actualities, it is time to reconsider the mechanisms for ensuring thorough, repeatable understencil cleaning that do not damage the stencil, introduce instability into the process or take too long to perform routine tasks. The industry should rethink the understencil cleaning system needed to manage current and future assembly realities. Aspects to consider include:
The pandemic taught us the importance of AI is not on the shop floor but in the ability of people to communicate.
For roughly half a decade, pundits have been waxing poetic about revolutionary changes about to take place in manufacturing – and in society at large – made available by advances in sensor technology that can be driven and manipulated by sophisticated software. Artificial intelligence (AI) and Factory (or Tech) 4.0 often best represent these revolutionary advances. Both have been touted to promise improving productivity, efficiency and speed, resulting in reduced costs and the need for fewer human employees where implemented.
I have never been a fan of any technology that replaces “human employees” but prefer technology that helps people achieve more. Based on the past couple years, that appears to be exactly what these revolutionary advances have actually achieved: using AI to enhance what people can achieve, rather than replacing them. How this has occurred, however, is different from originally imagined.
Using Lean Six Sigma to balance the increasing cost of solder.
While the death of through-hole technology has been predicted for decades, the reality is some applications have components that require a level of solder joint robustness that only through-hole technology can deliver. In low- and medium-volume operations, the cost-effectiveness of soldering those mixed-technology printed circuit board assemblies using a selective solder machine is an easy calculation because it may eliminate the cost of operating a wave solder machine. However, operations doing high-volume assembly of predominantly through-hole PCBAs may find determining the cost-effectiveness of selective solder is more challenging since their wave solder machines operate continuously. In those cases, the question becomes: What is the point at which use of wave soldering becomes inefficient when the percentage of through-hole components on printed circuit board assemblies drops?
The cost of solder, along with other material and production costs, is increasing globally. While these cost increases are unavoidable, implementing efficiency improvements can help balance these costs by reducing the amount of solder needed and eliminating solder dross.
Industry colleagues reunite after two years for in-person lunches with a side of unrestrained conversation.
I meet a certain friend periodically for lunch. I value his company and conversation. Time with him is never dull. He runs an EMS firm, also never dull. His work provides daily material for stories. He tells those stories well. Sometimes I’m privileged to hear them at our lunches. Talk flows with an easy and relaxed familiarity, a kind of relief. Sometimes the food gets cold. No matter.
Our discussions are more urgent now because the pandemic preempted our lunches for two years. We have a lot of pent-up opinions to catalogue and classify. Add to that winter’s natural chill, which enforces a certain introspection. Two years is a long time to accumulate vent-worthy prejudices. Like a trusted confidante, our resumed midday dialogue is most welcome – and good therapy.
These exchanges with my friend take place in a bullshit-free zone. No topic is sacred. No opinion is off-limits. Salesmanship and posturing are implicitly discouraged. Aside from the standard business-related talk, we risk diverting into politics, history, science, philosophy, religion, child-raising, youthful folly, renewed inflation, government, taxes, hiring difficulties – whatever suits us at that moment.
He has many opinions, as you would expect of an EMS CEO. Sometimes I don’t agree with them, but that’s okay because sometimes he doesn’t agree with me. Those sincere, but always respectful, differences are what make our luncheons so refreshing, interesting and educational. And now, long anticipated. There are no hidden agendas. It’s amazing what one can learn when keeping an open mind and not trying to pitch something. Perhaps an unheralded benefit of the pandemic is the stripping away of many pretensions. Life’s too short, as has been made crystal clear these past 24 months.
So many things have changed. We compare notes in our customary judgmental way. Items that may have seemed important only two short years ago no longer seem to matter. So many things have also stayed the same. People can still be obtuse, stupid, unthinking and intolerant. Colleagues can still be greedy, controlling, inconsiderate and intimidating. All this can be accomplished while social distancing and being fully vaccinated and boosted. Some use the pandemic as cover for bad behavior, masking moves they intended to make anyway. Covid simply furnished a readymade pretext.
Our discussions make use of a newly expanded vocabulary. Think of the neologisms we’ve learned: supply chain; spike protein; herd immunity; viral load; mRNA vaccines. We’re all amateur epidemiologists now with an expanded lexicon of excuses when things don’t go to plan: Los Angeles Harbor; Donbas/Ukraine; Xinjiang; reshoring.
We’ve aged at an accelerated rate. Commitments are now hedged. Everything is qualified and tentative. My friend and I note the prevalence of more nuanced language – after normal was redefined.
“If all goes well…”
“If everything arrives on time…”
“If everybody stays healthy…”
“If nobody gets sick…”
“If the flight isn’t cancelled…”
“If the shipment isn’t held up…”
“If the test is negative…”
If.
Many might add, “God willing.”
Most understand the qualifiers. Understanding is often a function of age, although it is risky to generalize. We all know wise millennials and aged fools. The minute you generalize is the instant you are proved wrong, and you have the lesson of oversimplification and snap judgment thrown back in your face. The story of my life. (It keeps me humble.) But the fact remains, in my experience – and that of my lunch companion – most opt to muddle through rather than make a scene of futile protest. Mercifully, neither of us has experienced debates about masking adjudicated with fistfights yet.
What exactly have we learned? Are we smarter and wiser, or warier from the experience? My friend and I wrestle with that one. Lunch does indeed grow cold. The conversation gets hot.
Our discussion turns to communication skills among colleagues and coworkers. One unsung skill that pays dividends is the ability to ascertain and describe a situation, so it is comprehensible to a third party. That seems obvious enough. The surprising truth is many can’t do it, or do it badly, resulting in much time expended, reexplaining the original problem to the intended recipient. We lament the hours lost rectifying misunderstandings that never should have happened, due to a basic lack of clarity in stating the issue.
Breaking down problems into easily digestible bites (or bytes) is a gift, a real advantage for those who have it. Communicating those bites (or bytes) to interested laypersons so they understand and can act on them is a sublime gift. An articulate engineer who can distill a technical challenge to its simplest terms for nontechnical laypersons, such as buyers or managers, who can effortlessly switch between those laypersons and technical peers, is golden. And almost impossible to find.
Equally scarce are those whose radiological skills can clearly describe the content of an x-ray image to an engineer. The recipient doesn’t always know – or admit to knowing – what it is they are looking at.
The same goes elsewhere in companies for HR or accounting problems. Misinformation about 401(k) policies or charts of accounts can drive comprehension off the rails, leading to more time wasted. Once derailed, it’s hard for the recipient to mentally regain proper course. Just as with articulate engineers, plain-speaking HR specialists and literarily astute bookkeepers and accountants are in short supply, and doubtless not floating off the California coast waiting to be unloaded in bulk. Plug-and-play candidates to fill open positions are becoming an endangered species. We both agree we need to devote more time to training our own.
Communicating problems in easily digestible bites is a gift.
Our discussion turns to the private equity boom. My friend tested positive for private equity, as his firm has been acquired twice in the past four years. No known cure. He hopes the side effects are long-term, and he can cash out at an opportune time and move on to the next challenge, or maybe no challenge at all. (Ain’t capitalism grand?) Whether his company is more competitive as a result is an open question that only time will answer. Whether his employees will remain employed as the debts mount and the spreadsheets are deployed to justify the metrics is another. (Their feelings about the transactions were not available at press time.) One senses a reaction akin to a Russian conscript confronted with the imminent prospect of a Ukrainian winter sightseeing tour: high risk, abundant stress, with plenty of question marks about the future.
My turn. I describe with some exasperation the junior investment bankers and family office acquisition companies that leave friendly voicemails or emails about twice monthly, reminding me of my actuarial status through their queries about our company’s future ownership. So solicitous. A favorite approach comes from ex-military officers. Like this:
I’m a West Point graduate and former Blackhawk helicopter pilot interested in buying a business in the PCBA testing and inspection services industry with $5 million to $20 million in annual sales. The other day, I came across your company and am reaching out to learn more.
I can offer a distinct transition opportunity for you as someone who will appreciate the hard work you've put into the business, take care of the valued members of your team, and build upon what you've established. As a company commander in the Army, I always placed the mission and my people first – and that’s exactly what I’d do with your company.
Hmm. A Blackhawk raid on a delinquent account for past-due receivables would leave an indelible impression. Distinct transition opportunity indeed.
Or this:
I hope December is off to a great start for you and the team at Dataset (sic). I'm reaching out today because I’m an experienced operations leader looking to acquire and grow a (sic) electrical and electronic manufacturing company. If you’ve ever considered handing over the reins and taking some chips off the table (i.e., selling some or all of Dataset), I would love to discuss the opportunity to carry on your legacy.
As a prior naval officer with years of operational leadership experience, I have a commitment to service and am passionate about a company’s mission and employees. I work with a core group of investors experienced in acquiring and growing high-performing companies like Dataset, and I am committed to working with the experienced management team you have put in place.
If you're interested in discussing your options, please let me know some times over the next week that work for a quick call. I understand this can be a sensitive topic, so please know I will maintain strict confidentiality in our discussions.
Lieutenant, now hear this! December was off to a great start until we received your email.
“Operational Leadership Experience” begins with knowing the correct spelling of the target company. It’s D-A-T-E-S-T. Please direct your service and commitment to doing your homework. Speling is @ sensitif topik.
For those who embrace pacifism, or at least a less “regimented” approach, there’s this:
I'm following up on a letter I sent you last week that discussed my serious interest in your business and whether you've considered transitioning ownership of your company. If so, I would very much appreciate the opportunity to further discuss a potential option with you.
As I mentioned in my letter, I founded my company with the intention of acquiring and operating a business in the testing and inspection industry, and I'm particularly interested in your company. If this sounds like an option you're interested in discussing, and you (generally) meet the criteria listed in my previous email and attachment, please contact me using this email address or the phone number below. I've also attached a brochure that further explains my background.
As with many, this pitch reads like a rich kid with family money looking to either fill his idle time or fulfill the thesis requirement for his MBA graduation project.
The pickup line is often some variation of the same theme: I’ve often wanted to get into the testing business and run a testing company on my own... Like they’ve been lying awake at night all their life, harboring this elusive Test Engineering Dream, and now it’s within their third-party-funded grasp.
Interestingly, the prospective acquirers are all male. In all the years of receiving such inquiries, I have yet to receive a single proposal from a female aspirant. Take from that what you will. As my companion does.
We part ways, content in being back together, sharing knowledge and swapping stories about our dysfunctional, yet thriving, industry, and reimagining the New Normal. The more things change....
is president of Datest Corp. (datest.com); rboguski@datest.com. His column runs bimonthly.
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