Leaving the comforts of home can open one’s eyes to what’s really going on.
It may be a small world, but between North America and Asia is one awfully big ocean, and when you cross it you realize there’s much more to the world than you could have ever imagined. In a phrase, it’s like “back to the future” in that some things recall the good old days juxtaposed against a future that is growing incomprehensible from the increasingly provincial Western point of view.
Trade shows, exhibitions, meetings and other opportunities have for decades brought together the electronics supply chain. All these events seem to call themselves “global” or “The Industry” or just plain “big” in the hopes of luring attendees from all over and, therefore, gain bragging rights to being a leading show. One way or another, substantive knowledge can be gleaned from all these events. The risk is becoming comfortable attending the most “local” event on the assumption they are all similar and yield the same net sum of knowledge gain.
Take a ride to the far side, however – across that awfully big ocean to the other side of the globe – and you may be in for a rude awakening. As a fabricator operating in the backwaters of North America, for whom the supply base steadily shrinks and for whom growth is most likely due to a competitor closing rather than higher organic demand, it was both scary and exciting to attend the HKPCA Show in Shenzhen and see the plethora of fabrication equipment and material suppliers and forecasts of true growth for fabricators.
By plethora of equipment, I mean more than 20 manufacturers of mechanical drills and about the same number of laser drills, scads of test and measurement equipment, AOI and direct imagers, and yes, even v-score machines. Supplier technology and attendee energy fed off each other. Unlike contemporary events in North America and Europe, many options were present for those fabricators that need to either selectively add to or broadly recapitalize their plants. And did I mention the prices?
While one need be wary about trade show price quotes (especially in a foreign country where language and culture can skew data in the blink of an eye), the general consensus was equipment costs 10% to 40% less in Asia than in North America. Moreover, many Western suppliers no longer sell equipment in North America and Europe because those markets are deemed too small to be worthwhile. This point is big and may, if not acted on, be the final nail for many who simply hope for a return to the ways of the past.
While the number of fabricators is fewer than in the past, almost all that remain need to recapitalize aging facilities. The core equipment in most facilities dates back – in design if not purchase time – to the 1980s and ’90s. Technology has evolved; useful life is now almost over; yet, as many manufacturers are looking for new machines, incumbent suppliers are abandoning Western markets. Adding insult to injury, without the plethora of equipment suppliers, fabricators do not have the technology and price-point options to fit their needs and budgets. The cost disadvantage makes a level playing field even less likely.
What can be done? Some are taking the lead. A “back to the future” eye-opener was seeing how many US-based, middle-sized fabricators are now going to China to source and purchase equipment and consumables directly. They are finding better prices, more options and cutting-edge technology not available from the relatively few remaining suppliers in North America. As attractive as this may appear, however, this course of action is not for the faint of heart.
Traversing oceans and dealing with data translation, installation challenges and service obstacles requires resolve to work through the many potential knots, as well as truly understanding what your needs are, what your organization can support, and most of all, what it all is worth to you and your company. Without knowledge, understanding and definitive goals, such efforts can lure your staff away from what is important. Successful companies are those with competent in-house tech and maintenance staffs, and enough volume to generate true savings. These companies are driving their business, rather than letting business drive their companies.
For those who feel costs alone are not the issue but are seeking next-generation technology or equipment focused on particular applications or volumes, it is equally important to explore these events. Those of us in the (forgotten) Western economies need to see what is now available, and to make it known we are looking for alternative, quality suppliers and are open to buying from new (offshore) vendors, not just the familiar ones. This means bridging language and cultural gaps, but will provide the knowledge necessary to make informed decisions about what equipment and supplies are globally available.
Finally, attending an upbeat event may be the biggest jolt of all. Much like in years past, there is enthusiasm in the West for the “what if” when you listen to economic projections ranging from increases in the 6% to 20% level, and hear technology leaders discuss next-generation needs and how much volume that will consume. Again, it’s a “back to the future” reminder there can be growth, provided efforts are made to look for it.
Across that big ocean opportunity abounds, not just for Western fabricators but for Eastern equipment and materials suppliers. It is exciting and within reach. While we in the West may face many challenges Eastern firms don’t, with focus, creativity and drive, opportunities can be found globally that will both drive profits and generate excitement locally.
firstname.lastname@example.org. His column appears monthly.is president and CEO of IMI (imipcb.com);