Better Relationships With Your PCB Vendors Will Yield Better Boards

dan-5We have talked a lot in this column about how board shops should treat their customers. How they should try to get to know their customers and their needs. So now let’s switch things around and talk about how customers should treat board shops, how they should work with board shops to get the best products and the best performances out of them.

For years now we have been talking about the new way of doing business. We have discussed things like what I call the “gray market” where companies like to buy their PCBs on line without ever having to talk to anyone, which by the way I consider the ultimate step in the commoditizing of the printed circuit board as a product. The trend in the electronics market has been to trivialize the circuit board to the point where the technology is considered pedestrian, repeatable and in some cases not even worthy of its own ITAR protection.

Companies can buy boards off web sites with a computer and a credit card without ever having to talk to anyone.

The sales people I work with find themselves overwhelmed with frustration caught between a rock and a hard place with their management whipping (yours truly included) them to get out there and visit those customers. Meet with them face to face; while those wily customers do everything they can to make sure that doesn’t ever happen, putting up barriers made of anything they can imagine to keep those sales people from seeing them face to face and in person. And that’s just the buyer, forget the chance of ever seeing anyone from the rest of the project team.

In short the relationship between the board shops and their customers is now virtually (no pun intended) non-existent.

And that spells trouble. Big trouble. All business is about people, people talking to each other, people understanding each other and yes people caring about each other. And now that has been lost. People are not talking to each other…pretty much never.

So where does that leave us? It leaves us to where we are today when we have the biggest gap between the people who design and engineer the end product and the people who build the boards that go into that product so that now the people building the board have nothing more to go on than what they are asked to build actually; just what is in front of them. They are operating in a vacuum.

In the old days, back in the days before the internet these people used to talk to one another. The customer’s project team would visit the board house or vice versa or both and then they would discuss the project. Then the customer would talk about the project in detail with her vendor. He would explain what they were doing, she would explain why the boards needed to be the way they needed to be and make sure that the people building the board understood why the board needed to be the way it needed to be. In these meetings the board guys would get a good understanding of what their boards were going into and why certain parameters were extremely critical. They would be exposed to the whole picture to the point where the customer’s call outs would make sense to them. And yes often around that meeting table ideas would be exchanged. The board guys could and did come up with suggestions and improvements for making the board a more effective component of the end product as well as more easily manufacturable and yes often, surprisingly often, less expensive.

And then through this process another thing would happen. The teams, the customers and the fabricators would bond, they would start becoming one team, real partners to the point that they were all working on the same project with the same goal in mind, the success of that project. They would become brothers and sisters in arms working for one common goal. This of course would cause them to be open and honest with another. People from both sides of the relationship would get to know each other. The company to company relationship would far exceed the buyer to salesperson only relationship (if you want to call it that) we have today. The teams would get to know each other all of them from engineers to the quality people to program managers they would work on the project together. If the boards were particularly difficult and the shop was having a hard time building them; their customer, their partner would send their team in and they would work side by side solving the problems and thus successfully producing good boards…together….as a team.

Now the irony is that today our end products are more sophisticated than ever. The PCBs to go into those products are more complicated than ever but now we have no partnerships. People in both companies seldom if ever talk to each other never mind actually meet. This has got to change. We have to go back to those pre-internet days where people met, discussed, came up with common solutions and goals, got to know and trust each other and work together building the products of tomorrow. As an old PCB guy I am looking right at you our customers right now and saying clearly and in plain English. “Dear customers we can’t do it without you. Come and visit us, Let us visit you, come and get to know us, come on let’s work together on making your products better than they have ever been.”

Stay tuned as in future columns we’ll talk about the specific steps we have to take to develop those partnership; steps that will make both of us better together than we can ever hope to be apart, the way things are going now. So check in with me next week and we’ll go there…together. It’s only common sense.

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Contract Manufacturers: Where Do You Get Your Boards?

Dan 8Choosing the right PCB vendor is critical to your success

Choosing the right PCB vendor is not as easy as you want to think it is. There are still many contract manufacturers out there who believe the myth that all PCB shops are the same and that in the end it’s only a matter of basing their decision on price and price alone. Oh, sure you’ll make yourselves feel better trying to know more about who you are dealing with. Some of you will actually visit potential vendors and perform surveys on them. This is a good thing, sometimes, because there are some shops who look fantastic when you visit them, pass your surveys with flying colors, and then go on to be a disaster when it comes to day by day performance. That’s because selecting the right board shop goes further than what it looks like on paper, or what it looks like period. I know some great looking shops that can’t perform worth a darn and then some of the ugliest shops you’ll ever see that are great performers.

Putting all of that aside, here are five good ways to choose the right PCB vendor for your contract manufacturing company.

  1. Ask them about their delivery and quality performance. Actually, ask them to back up what they claim their performance is. Ask to see the charts, the numbers. They are all going to tell you that their delivery and quality numbers are in the high 90’s don’t believe them, ask for proof. I mean look them in the eye and ask for proof, hard evidence, of this stellar performance they are claiming to have. Ask them how they measure this performance. An honest measurement for delivery is whether or not they meet the original date. Some companies will get a new catch-back date from their customers and then meet that date and call it on time. That is not on time. Meeting the original delivery date is true on time performance, no exceptions!
  2. Get references. Why doesn’t anyone do this? Ask them for references and then call those references and ask what their experience has been. It’s even better if you now someone who is or has been one of their customers and get their opinion of what’s it’s like to deal with this vendor. Find out for yourself. Do your research.
  3. Ask them if they are financially sound. The last thing you want is to invest in a vendor that will be out of business three months into the relationship. The repercussions of that situation are endless, especially when their doors are locked and your product is held hostage.
  4. Ask them how they handle customers issues. You will find that most customer/vendor relationships are formed in hardship. Any time you work with a PC shop there will be issues, there always are, and how you are treated dealing with those issues will end up making or breaking the relationship. Ask them to tell you about a time they had an issue with a customer and how it was handled.
  5. Once you decide to use a shop, start them off with a fairly simple order. Too often customers will lead off with their most challenging board. The one that they’ve had a difficult time sourcing, the one that everyone has had a hard time with. Do not give them that board. The first order should be an audition order. It should be simple and straightforward technology. You are checking out how their system works. How efficient their quote process is, how easy it is to place an order and of course how they perform on that order. Once you have a good feeling about their logistics, then start placing more orders and even get to the more challenging ones.

And one more, in the spirit of under promising and over delivering there is one more thing to think about and that’s the people. In the end it’s all about what you feel about the people you will be dealing with. You are after all, getting married to these people, not the company but the actual. people you will be dealing with. What kind of vibe do you get from them? Do you sense they respect their customers or do they delight in telling you some “the customer was stupid and we were so smart stories”? don’t laugh it happens all the time. Remember that your company and this company, your people and their people are going to be significant partners working towards the success of your company, so choose wisely my friends. No survey form ever tells the true story of the actual people you will be dealing with.

And, finally beware of board shops offering great price incentives, because in PCBs, like everything else, you get what you pay for. In the end a ten or even twenty percent discount will not make up for boards that are late holding up your production lines and causing late deliveries or worse yet, boards that have poor Quality causing eventual field failures on products that have your name on them, not that board shop’s. Once that happens, buying the cheapest board that money can buy will no longer seem like a great idea. It’s only common sense.

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Contract Manufacturers Need Sales And Marketing Too

dan21

Artwork courtesy Bob Tarzwell (gallerydeboer.ca/portfolio/tarzwell-robert/)

For many years now, too many that I want to count, I have been a real pain in the neck advocating that all board shops need marketing, they need to advertise, send out newsletters, hire and manage, measure, and motivate sales people, create forecasts, and account plans and pay attention to their customers’ needs. Interestingly enough, up to a few short years ago there were only a few tier two contract manufacturers who were doing the same things. I know, because I managed to work with the few of these rare companies who were willing to invest time and money into their own sales and marketing efforts.

I was never sure why there were son few CMs interested in sales and marketing? There are over eighteen hundred contract manufacturers out there and the vast majority of them and I mean a real vast majority of them are under fifteen million dollars in annual revenue, in fact, most of them are under ten million. So, I wondered what was the deal here? Why did so many contract manufacturers feel little or no need to pay the slightest attention to the sales and marketing end of their business?

One of the reasons was I came up with was that they didn’t really need to go out and find new business because it always came to them one way or another, they always had all the business they needed. So, I dug a little deeper, why did they have all the business they needed to stay busy and keep making a profit? It did not take long to discover that many of them started their business to service a larger company that needed them to produce a special unique assembly for them. Often the people who started their own contract manufacturing company had done so at the requests of a large company, often one they worked for. Often, the person who started the CM company had run the assembly department of that larger company, or they had been responsible for specific product line that the larger company was producing and that finally powers that be decided that it would be more economical for them to have those products built outside of their company by another smaller company they would help launch. It was amazing, how often this was the case.

And then, from that guaranteed base of business the new contract manufacturer grew by adding just one or two other customers a year to the level where they always had enough business. In fact the company that had originally helped launch them, did not want them to have too many other customers.

But now all of that has changed. These companies have grown where now they have to maintain a certain level of business just to handle their overhead costs. Often the original projects that had started them in business in the first place have disappeared. So now they find themselves in the position of having to get out there and find more business.

Unfortunately, this is proving to be a daunting task for a couple of reasons. The first one being that they do not have the sales and marketing infrastructure to grow their business. They need to hire sales people and develop and implement sales and marketing plans; and the second reason being that  the sales cycle, the time it takes to acquire a new customer, is a long one in their business. It can take from eight months to a year to find and win a new customer, and then in many cases it takes at least six months to scale that customer up to production levels. It is also much more difficult for contract manufacturer to handle a lot of customers.  By the very nature of their business, they are structured to handle only a few good customers at one time. At least most of them.

Because of these factors it is apparent that contract manufacturing companies need as much help with sales and marketing as the board shops always have. So, it’s with that in mind that I am going to focus my next two columns on contract manufacturers, helping them to develop sales and marketing programs that will help them kick start their sales efforts and started on the road to successfully filling their shops.

In next week’s column, I’ll be talking about how to find and hire the right sales people. And then how to manage, measure and motivate them. I’ll talk about incentive packages that assure results and how to keep sales people focused to success. I’ll also discuss the pros and cons of direct sales people versus independent sales reps.

The following week, I’ll talk about marketing, including creating and implementing great marketing and branding packages that will help contract manufacturers stand out in their marketplace. We’ll talk about social media, advertising, newsletters, and all other aspects of marketing your contract manufacturing company.

And sometime in the next few weeks, I’ll dedicate a column to how to select the best possible PCB vendors for your specific needs, something that is near and dear to my heart. Stick around it’s going to be fun, and good for you too. It’s only common sense.

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Because Prospecting Is What Salespeople Do

dan-3Get out there and do it now!

I know you hate to prospect and you hate to make cold calls, so this is what we have to talk about today. Whether you like it or not. To help us, there is a great book by Mark Hunter called High-Profit Prospecting a trade paperback published by Amacom. This book is a first rate guide to making sure that you squeeze everything you can out of your prospecting. If you are in sales I am not going to ask you to read this book; I am not going to urge you to read this book. No I am going to order you to read this book. This is the best book on prospecting since well since I read Hunter’s buddy Jeb Blount’s book called Fanatical Prospecting. Yeah sorry but I order you to read that one as well.

Look, there are no two ways about it, prospecting is one of the key elements if not the key element of doing a great sales job. You have to find new customers and to do that you have to prospect. Now don’t bother to start listing the excuses and myths about prospecting and why you cannot do it and why it doesn’t work in today’s market, because I have heard them all as has Mark Hunter. Actually to save time he has listed them for us to kick off from his book and here they are, with a few of my own for good measure.

Myth 1: One and Done: A cold call is not leaving a voice mail. You have to keep at it until you actually talk to someone. And by the way a ton of e-mails won’t do it either, they are useful to warm up an upcoming cold call but they are not a real cold call. You have to actually talk to someone to start the sales process.

Myth 2: I’ll prospect when I’m done taking care of my customers: I you believe this you will never call on new customers. No, let the shop take care of your customers and you go find some new ones.

Myth 3: It’s impossible to have dedicated time to prospect: Yeah right. Make the time to prospect, it is after all the most important thing you’ll do all day.

Myth 4: We’ve made it this long without prospecting: As Mark Hunter says in his book, “This myth will sink your company.” This myth has already sunk many other companies in the past. Look you need new customers even if your company is doing a great job and you have many long term customers…stuff happens, companies are bought, companies go out of business or decide to go in a different direction. If you are not always out there getting new customers, you will run out of business and it will be sooner than you think.

Myth 5: If we provide great customer service to our existing customers, we won’t have to prospect: Of course customer service especially great customer service is essential to be successful but you still need to always be prospecting for new customers. Check myth 4 for the reason.

Myth 6: Only “born salespeople” can prospect: No, with a set of skills and a lot of heart, courage and hard work, not to mention patience anyone can be a successful prospector and that’s a fact.

Now I am going to add a few myths of my own.

Myth 7: Ah, my personal favorite, if we build a great product they will come: No, they will not, unless your product is a baseball field in an Iowa cornfield they will not come. You have to tell someone about your products and services for them to know enough to want to talk to you and as a sales person this is your number one responsibility.

Myth 8: No one wants to see me anymore: They are all too busy to see me so it’s much too hard to make appointments. Actually, this is more of an excuse than a myth. Yes, it is true that it is much harder to see people than it has ever been but that’s just too bad. Your job as a sales person is to find a way to make it happen. Look if it’s hard for you to see a buyer it is as hard for your competitor as well so you’re on a level playing field. You have to figure out how to see people and how to get your point across on a phone call or even through the voice mail you leave to intrigue the potential customer enough to make her want to see you.

I think by now you’re getting the point. We as sales people have to prospect, we have to get out there and get in front of new customers. We have to get more involved in lead generation, prospecting, cold calling, first sales calls and getting that first quote and winning that first order. This is want we do. For the next couple of week, I am going to dedicate this column working with you on successful prospecting techniques and I am going to use Mark Hunter’s excellent book as a guide so I’d recommend that you’d do something to help yourself and get out there and get a copy of your own and follow along because there is no way that in 900 words a week I am going to cover everything that is in this important book. Next time we’ll talk about successful factors in lead generation you are not going to want to miss it. Meanwhile stop coming up with your own set of myths of why prospecting doesn’t work and get to work on some prospecting…try it you’ll like it. It’s only common sense.

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Training The Youngsters: Show Them The Possibilities

There is no doubt there is a shortage of young people in our business. As we all get older, the challenge of finding young people to replace us is getting more severe. Last week in this column, we talked about finding young people in our own organizations and then nurturing them to become an integral part of our companies. So, I thought it only appropriate that this week we would talk about that nurturing process, training them to become not only viable, but outstanding members of our organizations.

The PCB is not a commodity and it has been a vital and important participant in the global innovation of electronics.

We must show them future. By that I mean show them the viability of our product; the past, the present and most importantly the future. Show them the value of the printed circuit board in the grand scheme of things. Point out that PCBs have taken us to the moon, they have made the computer age possible, they have made medical advancement possible, and yes, they have provided the very defense and safety of our country and the world. Show them some of the products that your specific customers are building. I still think back with great pride in knowing that I touched the PCBs the guided the Space shuttle and the PCBs that went to Mars on the Motorola Viking program. We have all been in a doctor’s or dentist’s office or in a hospital and seen our customers’ names all over the equipment that surrounds us, only to realize that our board are in the equipment. Even though so many of our customers try to commoditize our products, we all know better.

Teach them the entire process

For these young people to completely and understand our, it is important they know how they are built. This means more than just taking them on a plant tour to see the entire process. It also means having them spend some time in the shop. If they have been working in the shop already, chances are they only know their job, their part of the process. So, it’s important thy learn the entire process. The best way to do this is to have them spend time building a board themselves. Following it through the process and performing each step of that process. This will go a long way towards giving them an understanding of what it takes to build a printed circuit board. This gets even more important if the young person you’ve hired has never worked in our industry before, it will be time well spent.

Train them completely for their new position.

Whether they are going into sales or starting out in the drill room or being promoted from the drill room to a supervisory position, prepare and implement a complete and comprehensive training program. This program should not end too after a few weeks. A complete training program will have evolutionary stages of development along the way. Lay out an entire year’s development program. This will not only serve as a checkpoint to see how the person is doing but will also give you the opportunity to mentor the person along the way. Training is one area that has always been lacking in our industry and I believe it is the number one reason we are in the state are in today when it comes to the aging of our industry.

Show them the places they’ll go

Show them their future. Lay out a career path setting expectations for where they will be in one year, in three years, in five years. A young person has his entire future ahead of him, they only way you are going to keep him engaged is to show them that future, explaining to him in real detail the growth and earning possibilities he faces by investing his time and effort in our industry. Tell her about the earning power of a good mature engineer, or a passionate sales person. We should keep in mind, that our schools are not exactly lauding the advantages of working in manufacturing and the exciting possibilities that entails. Our kids are taught to be lawyers and doctors and accountants and teachers, they are never taught the possibilities of being involved in manufacturing, which is why when they do come to us it us, most of the time it’s just to have a job and a paycheck to put food on the table. They have no concept of the career that is possible and the earning potential that a career in manufacturing offers them. I can safely state that no young lady in high school ever said “when I grow up. I’m going to sell circuit boards!”

But to many of us, being in this business has provided opportunities far beyond our expectations. We have made a good and rewarding lives from this industry. But I can safely say that none of us at the age of sixteen ever said “When I grow up, I’m going to sell circuit boards” and heck, we turned out okay. Its only common sense.Dan 8

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Rethinking Our Approach To Rep Firms

When are PCB shops going to get it?

I send a lot of my time helping board shops with their rep issues. I spend a lot of time trying to convince these shops that they are going to have to change the way they handle their rep relationships and start treating them as partners rather than second hand citizens if they want this whole thing to work.

I am constantly amazed when the board fabricators I talk to tell me without batting an eye that they have the “best shop in the industry; that they have the best service in the industry and reps should be beating a path to their door for the ‘privilege’ of selling for them.”

I really get a kick out of the shop owners who tell me that “they are no worse than anyone else” and “that any rep should be delighted to sell for them.”

And then they go on to tell me that the reps they have not are all a bunch of “lazy bums” and if I could only find them the “right” reps to sell their terrific products everything would be okay.

When I ask them if they have a marketing plan or are doing any advertising? All I get is a loud snort and an impatient, “who needs that stuff? We don’t need any of that we just need the right reps.”

When I ask them if they have a program for managing the reps; pointing out that one of my partners offers a very successfully proven plan that will guarantee that their rep program will succeed they scoff and say, “we talk to our reps all the time and don’t need any of that.”

When I ask them if they are willing to give reps house accounts they refuse even before the words have time to pass my lips. “No way will we ever do that, they have to earn their accounts, they have to bring in new business and not even go near our current accounts.”

When I point out that it is better to serve an account locally than from three thousand miles away so they should give the reps these accounts, I still can’t budge them.

When I ask them if they would be willing to pay a small retainer or even a draw to get the reps started since it is a very expensive and long process to find new accounts, get the surveyed and qualified and get that first order and then wait another 60 days to get paid, they just about come through the phone roaring, “No way will we ever do that! We did that once and the reps screwed us!”

And here is the clincher…when I tell them I might have a pretty good rep in an area let’s say New England that I might be able to introduce to them if they want, they tell me, “Well we can’t really put in a rep in that territory because we already have a rep there but he isn’t doing anything for us right now.”

And when I ask why he isn’t doing anything and why don’t they try talking to him to get him going again, they tell me and get this, listen to this one; “well, we owe him a bunch of money and have not been able to pay it for a six months…. but he should still be trying to sell for us right?”

Okay, if you are a board shop owner and any of this scenarios sound familiar to you then good! Maybe you’ll get it one of these days. So I am going to make it easy and plain to understand:

If you see yourself in any of the above examples you need to know that reps are tired of working with your company and companies like yours.

They are sick and tired of being screwed by you. Your product is not always great and frankly neither is your service. It is not a great privilege to sell your products. And as the market gets tougher and tougher it is that much more difficult to represent you and near impossible to make any real money representing you.

Besides all of these pitfalls of representing a board shop there is always this other dilemma, the danger of being too successful and bringing in so much business that when your accounting department sees how much you owe them and are going to owe them when the next orders come in you think nothing of terminating them. Never mind the fact that reps are always at the bottom of the stack of things you have to pay and if you go out of business they are always at the top of the list of creditors who will never get paid!

Now do you get it! Those of you who continue to disrespect your reps and not want cooperate with them are not going to be able to sign them for much longer so you are going to have to find another way to sell your products.

For those of you who are willing to enter the 21st century of rep/principal relationship listen up”

You are going to have to treat your reps with the trust and courtesy that a true partner deserves. You are going to make sure that the relationship will be win/win and yes you are going to have to pay the piper and pay retainers or at least give them some accounts if you want to have them work for you.

That’s all there is to it…it’s not that hard. Its only common sense.

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Building Leaders

dan-6The hottest topic on the PCB circuit these days is the lack of young people in our industry. As the rest of us get older, it is finally occurring to us that there is no one following in our footsteps, there is no one there to fill our shoes, when we decide enough is enough.

Thinking about this the other day, I remember what it was like when I started in this so industry so many years ago. It was with a company called Maine Electronics, a wholly owned subsidiary of Rockwell International. Originally, I was supposed to be an English teacher, but after about an hour of student teaching, I decided that honorable career that it was, teaching was not for me. So, then I had to decide what it was I was going to do to make a living if teaching was out.

Through a series of circumstances and coincidences and a long story best left form another day, I found myself hired at Maine Electronics as what was then called, a Program Coordinator, a fancy name for an expeditor. My job was to track and report the status of every single PCB in the programs I was handling. In those pre-computer days, taking status and tracking boards was all done annually by myself and seven other Program Coordinators. It was an interesting group. All of us were young, all of us were men of course, it was only much later that management realized that women could track and expedite boards as well as men could, better actually. We were all under twenty-four. And we all had some college, some of us had degrees but most did not yet. All of us with the same demographics politically and socially, which meant long hair and liberal politics which was ironic when you think that we were working on Minuteman missiles and F-11 bombers.

You can just image the fun we had chasing our boards all over the shop, and competing with one another to see who could get supervisors to work on their boards first. It was a time when our technology was respected enough that our customers were used to late dates and catch-back schedules.  We lived under a great deal of pressure but as always when looking back at hard times, today when we get together, we consider those the good old days.

I was fortunate to begin my career in a company what was one of the leading PCB producers in the world. A shop was run by very experienced PCB experts from either Rockwell Autonetics in Anaheim or left-overs from the previous company Maine Research which had been designed and built as the most advanced PCB facility in the world.  Just to give you an example we were building controlled impedance boards before people even knew there was such a thing.

But the point I want to make, is that we young people were trained every day of the week. Everything we did was a lesson for our future. Once we had been there a year or so they started grooming us for the next step in our career development. Some of us were destined to become process engineers, others were to become supervisors or Quality managers and a few of us where trained as sales people. In other words, from the very first day we were hired we were considered long-time members of the Rockwell family, and training us was considered an investment in the future of the company. Ur managers were tasked with starting all of us on the career path of our choice…within the company.

They were always working on the future of the company, with great intention. There was nothing haphazard about it.

And now, as we look back on the past twenty years how many of us have done that same thing? Not many of us, which is why we are in the dilemma we are in today. I daresay part of it is due to the arrogance of the boomer generation. We’ve always thought that we were the coolest generation with no regard or much respect, for that matter, for the generations that followed us. We thought we would live forever, so why bother looking back? We could not imagine a world without is and so we concentrated on the present with little interest in the future, especially a future we would not be part of.

Thus, here we are, a bunch of old gray men and a few better-looking women wondering how we are going to sustain our industry going forward, wondering who is going to carry the torch into the future.

But here is a reality check for you; it’s not really that we have had a shortage of young people in our shops because our companies actually do have some young people working in them. Take a walk around your shop, look around. Notice anything? Yes, that’s right there are young people there. They have been there all along, working in the plating department or the drill room or in shipping. Yes, they are there but we have not taken the time to notice them. We have not taken the time to talk to them, to get to know them, to find out what they are like, what they like to do when they’re not working. We need to sit down and talk to them and find out what their career aspirations are? We need to work with them, develop them just like those professionals at Rockwell did with me and my fellow Program Coordinators so many years ago. And then we must sit by their side and start working out their career path. Showing them that a career in the PCB business can be a good career. Demonstrating to them just how important our work is. Explaining to them what these little green cards go into and how they are changing the world.

We should make them believe that this is a good industry, an industry to be proud of and an industry that can provide a bright future for the person who is willing to work and to learn. And we should be willing to teach that person and help him or her to become a viable contributing member of our PCB community both today and in the future. It’s only common sense.

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