Understand what the transaction means for customers.
Your PCB supplier has been acquired. Will this acquisition benefit you as a board buyer? Or will it lead to higher prices and a reduced level of service?
The answer may depend on how you react.
Vendor acquisitions can cause supply-chain disruptions, especially when the acquiring firm has a competing product line. What is troubling about these transactions is few PCB buyers seem to understand the real economics involved, or why they happened in the first place and what it means to them as customers.
Or will the West continue to risk exposure?
The massive disruption caused by Covid-19 has revealed the fragility of the global supply chain. With proper leadership, however, many companies are adjusting (or will adjust) to the changes made necessary by this pandemic.
Predictably, this unprecedented disruption has prompted calls for nations to onshore their manufacturing. It’s an argument that pops up periodically. And on the surface, it does make sense. Why leave a domestic market so vulnerable to what’s going on in the rest of the world? Why not build all we need here?
But here’s some straight talk: It is simply not realistic to think we can bring all manufacturing – including printed circuit boards – back to Western shores.
Expand your manufacturing base at little or no cost.
Why are PCB purchasing departments often hesitant to move business to a new vendor, even when it is clearly warranted? Perhaps it’s the overly cumbersome process many buyers require before production can be moved.
Adding a new supplier to an approved vendor list (AVL) needs to be done with care, but I don’t understand why many firms make it harder than it has to be.
It is important to keep PCB vendors on their toes. They should know that you, as a circuit board buyer, regularly review vendor pricing and performance and are willing to move business when necessary. And the truth is adding qualified suppliers may not be as difficult as you think.
And does your purchasing department know what to send, and what not to?
Many commercial EMS and OEM companies have a gaping hole in the system to protect the intellectual property (IP) of their customers.
I can’t count the number of emails from customers requesting a quote for a printed circuit board that include not only the Gerber file(s) for that PCB, but also the assembly drawing, the bill of materials, and the schematic drawing for the entire product.
Companies in our industry take a number of steps to protect customer IP. They require signed nondisclosure agreements for all involved in the manufacture of their PCBs. They verify the identity of any visitors to their secured US manufacturing facilities and assign outsiders mandatory escorts. They may ban cellphones or any other devices that could be used to record inside those facilities.
However, with a press of the Send button, all that IP protection goes out the door.
Automation and faster amortization should mean lower costs.
PCB manufacturers often include nonrecurring engineering (NRE) and electrical test (ET) charges in quotes, in addition to the piece price. During my training sessions for board buyers, I am frequently asked how to avoid those charges.
It’s a good question.
When I started in this industry some – ahem – 30 years ago, NRE charges were approximately $100 per conductive layer, meaning a 4-layer PCB was $400; a 6-layer PCB was $600, and so on. Back then, it took a lot of labor hours to create manufacturing files from a piece of original artwork, as nothing was as digital as it is today.
Talk isn’t cheap, but the absence of it could cost you even more.
Throughout my PCB career as a go-between for board buyers and manufacturers, I’ve often heard complaints from buyers that fabricators – domestic and offshore – ask too many engineering questions (EQs) after receiving an order. “Why can’t they just build the board?” buyers say.
This mystifies me. In my view, PCB vendor questions provide valuable feedback. They may indicate the vendor lacks all the required information to build the order. They also tell me the manufacturer is intent on gathering all the data necessary to do the job right.
I’d be more concerned if no EQs came from a vendor. A PCB has over 100 separate required manufacturing processes, almost all of which are unique to each customer. It would be surprising, even alarming, if everything in an order was absolutely clear, with no back-and-forth necessary.