Printed circuit boards are typically the most expensive component and arguable the most important due to their functionality and criticality. Yet, the typical PCB strategy follows the same structure as sourcing office supplies. Does that make sense?
A typical PCB sourcing strategy looks like this:
- Typically treated as a commodity versus a custom component
- Procurement strategy is often made at a tactical, not a strategic level
- Many are doing business without a full understanding of capabilities, capacity or financial situation of their suppliers
- Maintain static strategies in a dynamic market
- Same strategy is used for domestic and off shore sourcing. “One size fits all”
Results of the typical PCB sourcing strategy:
Under-optimization of the supply chain due to poor matching of PCB requirements with the suppliers “sweet spot”.
The fact is, it is extremely rare for a company to have a homogenous technology level across their entire PCB demand. There may be a few 2-4 layer designs, a few 12 layer designs, a difficult motherboard design, and maybe even a few flexible circuits.
It is also a fact that PCB fabricators have a “sweet spot” that best fits their equipment set, engineering expertise, size and company culture. Although, very often, looking at their brochure or website will give the impression that they provide a full range of technology: 2 layer to 20 layer, .010” drill to micro via, standard materials to specialty materials, quick turn prototype through volume production. At the end of the day, nobody wants to turn away business.
The result of not matching your requirements to a suppliers “sweet spot” can be:
- Increased risk in terms of price stability and performance
- Increased risk of supply chain disruption
- Increased overall cost
A few facts
- Very few organizations have a homogenous group of PCB requirements
- Only portions of a customer’s PCB requirements are interesting to a good supplier
- Only 6.5% of PCB production is in the Americas
- Asia PCB suppliers do not operate in the same manner as North American based suppliers.
Do you need to revamp your PCB strategy? Where do you start?
You start with the basics. First, review your PCB technology and volume requirements. Your requirements can then be segmented by attributes such as standard technology, HDI, heavy copper, flexible circuits, etc. Then search to match suppliers to these requirements for both technology and volume. Ask the tough questions to REALLY understand type of work suppliers excel at.
Next, make sure that you have fully developed your procurement spec. Does it clearly spell out your requirements? Are any of your requirements adding unnecessary expense? All too often, a corrective action implemented for an issue that happened 10 years ago is driving a requirement that increases cost and just isn’t necessary in today’s manufacturing environment.
When the product arrives, are your inspectors fully trained to the IPC A-600 criteria? Customer and supplier should be inspecting to the very same criteria.
Finally, supplier performance metrics should be in place with a regular review with your suppliers to provide feedback and create a continuous improvement loop. Don’t just give your suppliers feedback on their performance to you, ask them for their opinion on how you can improve your designs and your procurement process. You just might be surprised!