Being ready to pivot offers flexibility and keeps vendors honest.
What is your company’s PCB buying strategy as we emerge from the confines of the Covid-19 pandemic shutdown? Do you have one?
Those responsible for corporate procurement need to understand supplier diversification is the key to remaining competitive in this challenging economy. Yet, many OEMs and EMS companies have invested too much of their annual PCB spend with only one vendor. That could prove to be a costly mistake.
I understand and appreciate vendor loyalty, but are you leveraging your vendor, or are you being leveraged by your vendor?
The truth is companies that stick with this one-vendor approach will have a harder time remaining competitive in the post-pandemic world. “We have used this vendor for years” is not a viable strategy.
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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.