Mar. 30, 2016: Foxconn buys Sharp.
May 19, 2016: Foxconn buys Nokia.
So many purchasing professionals I meet are wary of exposing their company to a supply line risk by buying offshore. With good reason, it often goes wrong.
An article published by Thomas A. Foster of Global Logistics & Supply Chain Strategies highlighted the issues:
Sourcing from offshore suppliers in China, India, Eastern Europe, Latin America and other low-cost regions is so widespread that few manufacturers and retailers can be competitive unless they join in this trend. In fact, the U.S. Federal Reserve Board attributes much of the recent economic growth and low inflation to this offshore outsourcing “best practice.”
However, the downside of offshore sourcing receives far less attention at the Fed or in any boardroom — at least until something goes wrong.
The more a company sources from distant, low-cost lands where financial transparency, operating visibility and reliable logistics are practically unknown, the risk of serious supply chain disruptions increases geometrically.
In a recent supply chain risk assessment study, Aberdeen Group, a Boston-based research firm, said that more than 80% of supply management executives reported that their companies experienced disruptions within the past two years serious enough to negatively impact their companies’ customer relations, earnings, time-to-market cycles, sales, and overall brand perceptions.
Let’s put some real numbers to this.
The cost of establishing a source offshore in time and out of pocket expenses can exceed $50,000. The cost of attempting to resolve an issue by revisiting a supplier, an equal amount, considering the airfare and hotel alone can top $10,000 per person … and there’s no assurance the problem will be resolved.
Not a huge number to you? Now add the cost of disappointing customers: big. The writeoff of bad product: big. And, to pour salt in the wound, making several trips before you realize there will be no resolution.
Real life case in point. One customer of ours had the unfortunate experience of finding 20% of the goods it received from its Asia-based supplier failed in system in the field. The supplier insisted they did not nothing wrong and would not support any reimbursement. This was after scrambling to replace units in the field for customers, and two engineers flying to China for a week. The customer finally turned to us for the rework at a cost essentially equal to the original purchase price. Ouch.
So, what does the OEM with limited resources do to compete on the same level as the big guys which have deep pockets and feet on the ground in Asia?
The answer is to shift the accountability from the offshore supplier to an experienced provider of managed PCB manufacturing services in the US. They can eliminate the risk of poor quality and greatly mitigate the risk of supply line disruption.
They do this through rigorous attention to technical detail on the front end, using only developed, strong, factory relationships, then thorough incoming inspections, and holding the factories accountable for any errors.
Basically, knowledgeable feet on the ground here, with the skills and experience to manage complex Asia-based electronics projects, and perhaps most importantly, financially accountable for the results.
Eliminating risk and capturing the savings from offshore. That is a pretty decent balance.
Let’s see what’s up with Patty ….
Patty was just dropped off at O’Hare airport after finishing a 3 day workshop on Lean Six Sigma statistics, design of experiments, and statistical process control. Interestingly, the students were lawyers. In recent years more and more service-based organizations were adopting lean Six Sigma and it was a long time since Patty had taught such a workshop to engineers. She noted that although the lawyer’s math skills were a bit rusty, they were very good listeners and picked up the math behind lean Six Sigma topics very quickly.
After paying the cab driver, she entered the terminal and went to see an agent. She was early enough to get an early flight home, so she had called the people at the online ticket agency during the cab ride. They said the change fee would be over $300, she felt that was just too much to pay. She was delighted to see that it was only $75 at the terminal.
She looked at her paper boarding pass and saw that she had more than two hours, just enough time for a relaxed lunch at Wolfgang Puck while she read USA Today. Patty was the only person her age that she knew who enjoyed reading a paper newspaper, she guessed that she picked the habit up from her dad.
The two hours went by quickly and she was standing in line waiting to board the flight to Boston’s Logan Airport. She had now been at Ivy U for a few years and traveled much less than when she worked at ACME. She had forgotten how stressful and unpleasant traveling was. As she stood in line, the man in front of her put his smartphone on the scanner and the scanner could not read the QC code. He and the agent fumbled for a while before they got it to work. This was another place where, in her opinion, paper was still king.
Patty got on board and settled into her middle row seat. She groaned a little bit at how uncomfortable and cramped it was. Patty was reminded of what her dad used to say in situations like this; “I know it is a bit uncomfortable, but just think what the 49ers went through to get to California,” he would tease.
After takeoff, she turned on her laptop. She absolutely had to send some emails, so she signed on to the onboard WiFi. She got sticker shock when she saw that it cost $18.95! Even though Ivy U would pay for it, the high price galled her.
After she finished the emails, a wave of fatigue swept over her and she needed a break. She chuckled to herself when she thought of a recent event. She had taken two of her best teaching assistants (TAs) to lunch and the conversation somehow came to discussing people who hid Jews from the Nazi’s in World War II. Patty mentioned to her two young protégés about an excellent book and movie she read and saw as a teenager, The Hiding Place. The story is about Corrie Ten Boom and her family and how they hid, and hence saved, many Jews from the Nazis in Holland during WWII. Although the movie was made before she was born, it was shown at Patty’s church every few years, for the new sets of youngsters who came along. Patty mentioned to her two superstar TAs that the film was produced by Billy Graham’s organization.
“Who is Billy Graham?” they both asked in unison.
Patty struggled to keep her composure as she explained who he was. How could they not know this? She decided to examine the situation a bit further.
“OK, you two. Who was Mickey Mantle?” Patty asked.
The youngster’s both looked at each other.
“We have no clue,” they chuckled.
Patty though she would try a few more, “Nikita Khrushchev?”
Patty started humming a few bars of Orbison’s most popular song.
“Oh, Pretty Woman,” the boys said in unison.
Patty thought to herself, “Each of these young lads are the best student in every class that they take and yet they don’t know these ‘celebrities’?”
The next day Patty arrived at her office early to meet with Rob and Pete to discuss how the presentations that they were making for Mike Madigan on voiding were coming. Patty had arrived so late the night before, that Rob was already asleep. She did not see him in the morning as it was her turn to get the boys ready for school and he was off early to get in his 90 minutes of exercising. So, they had no chance to discuss the progress of the presentation.
“Pete, your presentation of BGA voiding is terrific. How is my hubby doing on BTC voiding?” she chuckled as she looked at Rob.
“I feel like I’m going to get yelled at ’cause I didn’t do my homework,” Rob said sheepishly.
“Yikes! We only have a few days,” Patty responded. “And I have yet to do my part on using solder preforms to minimize voiding,” she went on.
“I’m only teasing. I have quite a bit of info,” Rob said.
“We have been out of the mainstream for a while and one thing is for sure, voiding is the number one issue among assemblers today. So many people are assembling QFNs and are struggling with voiding. Voiding with some solder pastes can be over 50% of the area,” Rob went on.
“Wow! With 50% voids, think of how poorly the heat is being transfer away for the BTCs,” she looked at Rob and chuckled. “Remember, ‘BTC’ not ‘QFN,’ Patty went on.
“Yes ma’am,” Rob jokingly replied.
“Can you imagine the effect on reliability and field issues with so little heat being removed? The ICs inside the BTCs must be frying” Pete added.
“Voiding at this level has got to be really costly,” Patty mused.
“One of the things that really helped me was that I found quite a few experiments on voiding,” Rob added.
“What were some of the key points?” Pete asked.
“Well, as you might expect, the solder paste is typically the most critical part of the process. Some pastes have voiding lower than 10% with others above 50%,” Rob replied.
“What about the process?” Patty asked.
“Well, the reflow profile can be very important, as is controlling the PWBs and components. But, with the best pastes, it has been found that you can control the voiding content even if you can’t change the reflow profile and the PWBs and components have some issues,” Rob responded.
“Look at the x-rays of poor and good voiding between two pastes,” Rob said.
“What a difference,” Patty and Pete said in unison.
“What about the stencil design and venting?” Pete asked.
“Chris said that stencil design for venting is not as critical as once thought, although a window pane design is usually used,” Rob replied.
“So it sounds like starting with the best solder paste solves 90% of the problem and adjusting the process, say with the right reflow profile, helps refine the result,” Patty summed up.
With this Rob went off to put the finishing touches on his PowerPoint® slides for his part of the presentation, while Patty started working on her part of the presentation on using solder preforms to reduce voiding.
Two weeks later.
Patty’s mom and dad came for a visit on a Sunday. Her mom had graciously offered to bring a complete Sunday dinner. Patty, Rob and the boys were grateful for the delicious meal. As they began to eat, Patty shared the story of her best students not knowing Billy Graham, et al.
“But, what was even more surprising was that I ended up asking 10 or 20 more students and only one had ever heard of any of these four ‘famous’ people,” Patty sighed.
“It’s your age,” Patty’s mom replied.
Thirty years old was not that far in the rear view mirror for Patty and she really didn’t consider herself old.
“These youngsters were born in the late 1990s, a generation after these people were prominent,” her mom went on.
“Who?” Patty asked. And then she chuckled, getting the point.
After a brief pause, she said, “I do know who Trotsky was; tell me about the others.”
As always, this story is based on true events.
Patty had to admit that the last few weeks were exciting. Her talk to US Army Rangers and Navy Seals on critical thinking went really well. Now, the local newspaper was asking her to comment on political polling in the current presidential primaries. Patty was just finishing her response to the paper before a meeting with Pete to discuss the voiding presentation that they were working on for Mike Madigan. Her response follows:
My favorite candidate was trailing in the polls by only 1% in my state, but on primary day he lost by 5%. Why isn’t polling more accurate?
Pity the pollsters. They have to predict what will happen by sampling a manageable number of people, say 1,000. This situation creates several challenges. The first is that their sample should represent the population as a whole. This challenge is not easy. They need to assure that the 1,000 people represent the population of the entire state. If they get an inappropriate number of old, young, wealthy, lower income, educated, less educated, etc., in these 1,000 people then their prediction will be off. As an example, let’s say that 45% of a state’s residents have a bachelor’s degree or higher, yet their sample has 60% with a bachelor’s degree or more. This difference will likely make their sample non-representative of the population as a whole and will skew the results.
Let’s go back to your candidate, whom we will call candidate A. It ends up that candidate A was supported by only 47.5% of the total population and his opponent, candidate B, by 52.5%, giving the difference of 5% that you mentioned. Let’s assume that the pollsters establish a good sample of 1,000 people that is very close to representing the state as a whole. It is unreasonable to expect that the 1,000 people polled would exactly have 47.5% or 475 supporting candidate A, due to statistical variation. To show the likelihood of a number different than 475, we have to use the binomial distribution as seen in Figure 1 below. Note that there is about a 10% (0.1085 in the figure) chance that a population of 1,000 will have 495 or greater supporting candidate A. This uncertainty, added to the difficulty of establishing a perfect sample, makes polling error of 5% or so not uncommon.
Just as Patty finished her response, Pete came to her office door.
“Hey kiddo! Can we go over my thoughts on the voiding in BGA balls section on voiding for Mike Madigan?” Pete asked cheerfully.
“Sure. What do you have so far?” Patty asked.
“I’m focusing on the importance of the reflow profile. Have you seen this graph,” Pete began.
“Wow! That really shows the benefit of a hot soak profile over a cool soak profile. But, I am most surprised at how much benefit a hot soak profile has over a ramp-to-peak profile (RTP),” Patty commented.
“Isn’t the timing of the higher temperatures important, too?” Patty asked.
“My next point precisely. Look at this graph,” Pete said enthusiastically.
“The process engineer needs to assure that most of the flux is volatilized before the solder melts, as in the red curve, not as in the black curve where almost all of the flux is outgassing during the melting it the solder (Tm). This situation is assured by the correct combination of flux and reflow profile,” Pete said confidently.
“Anything else, Professor Pete?” Patty asked.
“It is really helpful to work with your solder paste supplier to obtain the red curve. They should be able to tell you what type of reflow profile and solder paste will most likely provide this kind of result,” Pete finished with a chuckle.
And he added drolly. “Right … Professor Pete.”
“Rob’s working on voiding on thermal pads for BTCs right?” Patty asked.
“Yep. He said he will be ready in two days,” Pete answered.
What will Robs plan be for minimizing voiding with BTCs? Will Patty be happy with it? Stayed tuned for the details.
One of the handy aspects of getting boards assembled at Screaming Circuits is that we don’t require fiducial marks for standard process boards. I would say that we build far more boards without fiducials than with. That’s cool, but there are sometimes when fiducials really are a good idea. In fact, if you’ve got room on the PCB, they’re always a good idea (just because something isn’t required doesn’t mean that it’s not a good idea).
Some boards are more in need of the marks than others. For example, not long ago, we got a rigid flex board in. It had three separate rigid boards connected by flex, designed to be folded into a stack. It looked pretty similar to the mockup in this image:
The boards didn’t have any fiducial marks. Normally, what we do, is find a via hole, through-hole pin hole, or some similar feature to use as a fiducial. That usually works, but not always. In this case, the length of the flex varied slightly from board to board. The PCB color was also very low contrast, which made it difficult for the machine to consistently recognize any mark we picked.
That meant our machines had a hard time finding the “home” spot, and we had to reset for each of the connected boards. Finding a spot on one board did not guarantee that we’d know where to place parts on the other two boards in the set.
In this case, it would have been far better if the boards were a consistent distance apart, and if each of the three boards had a set of fiducial marks.
What makes a good fidicual?
Most CAD packages have fiducial marks in their components library. Basically, it needs to be a metal dot surrounded by an area without any copper or solder mask. More than one is best. It should be an asymmetrical pattern that can only be oriented one way.
I’ve got some more details in this article here.
Routed up like a fiducial
Another rigid flex in the night
Not quite 18 years ago, a pair of venture capital firms bought a small Washington fab shop named Power Circuits. The following year those two firms, Thayer Capital Partners and Brockway Moran & Partners, added Power Circuits in Santa Ana, CA, to its stable. It renamed the fabricators TTM Technologies.
Today TTM is one of the largest PCB fabricators in the world, with revenues of around $2.5 billion across 25 facilities and 30,000 employees. It made some of the largest acquisitions in industry history, and unlike some of its competitors, made those acquisitions work.
It’s not without some irony, then, that one of the former directors of Power Circuits has teamed with a venture capital fund to acquire a pair of Southern California fabricators this week.
Shane Whiteside, who was general manager and director of operations at Power Circuits, rose with TTM, eventually becoming executive vice president and COO before departing the firm in 2013.
With his background, Whiteside certainly would know which plants to target on the West Coast of the US. I haven’t been through KCA Electronics, but Marcel Electronics is one of the finest shops PCD&F has had the pleasure of visiting. I’m eager to see how this evolves.
An ex Photocircuits engineer says the gutting of US manufacturing has led to a huge shift in ownership of US assets, with dire consequences for all Americans.
“With only a very small manufacturing base left, there is a small need to make capital investments in these businesses. Capital investments are what drive productivity,” writes Jason Tillberg.
He’s preaching to the choir, no doubt, but I always find it interesting when folks support their with details. In this case, Tillberg points to the massive transfer of ownership of US assets to foreign entities — remember Ross Perot’s “giant sucking sound” metaphor? — as a real cost paid by Americans through its inability (unwillingness?) to compete in manufacturing.
I find his thesis a bit incomplete and scattered, but he makes an important observation on capital investment and the disincentives to invest in a shrinking manufacturing base.
(As an aside, Tillberg talks about his experiences at Photocircuits in another piece on productivity written a few years back.)
We get this question a lot: How much per square inch for a 4-layer board? (or double sided, or 6 layers … same question). I won’t hold you to it, I promise. Right….
We understand that it is difficult to provide the boss with a project cost roll up if you do not have the board cost estimate. If you do a lot of designs you may have a feel for it or you may refer to a similar board cost from a past project. This actually can be very effective.
I have even seen online cost calculators that presume to give an accurate number. Knowing what I know about PCB pricing, however, I can say that it just ain’t so.
Here is why calculating PCB cost is tricky and dangerous ground.
The biggest cost drivers for a bare board are:
All manufacturers have a floor or minimum and it is best to ask how many boards you can get for the minimum charge. Some of the internet guys will sell one or five at a very low seemingly low cost, but your boards will have to fit perfectly into their narrow technical profile.
Not the following:
So, now think about putting all of this into an algorithm and coming up with a defensible, unchangeable answer. That is a dangerous guessing game.
My best advice is this: Get preliminary Gerbers to your preferred vendors and tell them they are preliminary. If the effort is conceptual, provide a simple description answering the cost drivers above and email your proposed or preferred vendors for a quote. (To make it easy for you, we offer a template. Go to precisionpcbs.com/pcb-manufacturing and click on the “Fab Drawing Template.”)