Archive for category Management

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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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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That Annual Sales Meeting

dan-6Last week, we talked about preparing for 2018 by developing account plans and forecasts. We mentioned that this would be presented, viewed, and discussed by the entire management team at the annual sales meeting that would be held in January of 2018. This week, we’ll discuss that annual sales meeting.

This is truly, the most important meeting your company will hold every year. It is the one time during the entire year where the team comes together and intentionally talks about business for the coming year.

Besides the sales people presenting their slate of account plans, and their customer-by-customer month- by-month sales forecast, operations will talk about what their plans are for the coming year and how based on the sales forecast they will plan production shifts as well as staff the company to meet that forecast.

Engineering will talk about the new technologies they will be coming up with in the next year and when they will be implemented.

Both operations and engineering will present a capital plan, listing expenditures for the coming year including equipment, and facility upgrades and a schedule of when they will occur.

And Quality will discuss any new specs and qualifications and registrations that they plan to achieve or be updating in the coming year.

The marketing department will deliver their marketing plan including a quarter by quarter plan for synergistic marketing that will tie in, advertising, newsletters, and social media. They will also announce the trade shows they will be attending and exhibiting at.

There will also be a download of market information including a study of each market from defense and aerospace to security, to computers, to telecom, to medical and commercial to decide which market to target. There will also be a discussion of the competition; who is winning, who is left, who has gone out of business and why, as well as which companies have grown by doing what?

And finally, the entire team will come together and discuss the company’s strategic direction for the coming year. This will involve setting a complete plan in play for the coming year, including sales tactics based on the customers, technology, and markets that the company will be targeting not only in the next twelve months but also twenty-four, thirty-six and yes, even sixty months.

This team will study, discuss, and make major decisions on a number of key topics including whether or not to develop and implement an acquisition program for buying or merging with new companies. They may decide to develop and implement a roll-up plan where they acquire suffering companies and roll up their business into their own. Or they might decide to vertically integrate and buy an assembly company or a design service bureau so they can offer a total solution from design to assembly. Or alas, they might decide that it is time to call it day and sell the company or worse yet just close it…that’s ugly.

This annual sales meeting is a good time to discuss partnerships. Maybe the team decides that it is time to face facts and start offering offshore services, finally going out and getting some Asian suppliers to complement their own capabilities.

These are all issues that are discussed at this once a year annual meeting. But, the most important thing by far, is that all the company’s key people are together in one room for one, two, three days or even a week. Decided together the direction of the company. This is the real reason for the annual meeting. And therefore, every second of that meeting must be carefully planned. There should not be a minute wasted. Everyone should participate and have their fair representation at this meeting. And yes, everyone should come fully prepared to not only discuss their particular area but also with their strong ideas as the overall direction of the company.

And then there are three things that have to come out of the annual meeting:

  1. Everyone must be in complete agreement as to the direction of the company once the meeting is over. Inside the meeting room, there can be infighting and chair throwing and loud words and intense arguments. But once the meeting is over all management must come out of that room fully aligned and marching in step toward the company’s future.
  2. There has to be a communications plan. Once the direction of the company has been decided and everyone on the management team is marching in place, all the managers must go to their respective departments and convey these marching orders. In as little as twenty-four hours everyone, and I mean everyone in the company, must know chapter and verse the direction of the company.
  3. And the last thing that comes out of the annual meeting is a fully assigned and dated action plan. The plan that will become a working document. The tool, the blueprint, that everyone uses to not only implement that plan but measure that company’s progress against the plan’s dated milestones. Too many companies go to all the trouble of holding an annual meeting only to throw the plan in their bottom drawers and completely forget about it until the following September when it is time to repeat the entire process of annual planning. And that ladies and gentlemen is sheer foolishness.

If you are not planning to have an annual meeting this year. If you are not planning to develop account plans, and forecasts, and capital plans, and engineering plans. Then why don’t you just do yourself a favor and just plan to check out. Call my friend Tom Kastner and start the process of selling your company while you still have something to sell. It’s only common sense.

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Salespeople Are The Voice Of The Customer

dan-2So as that voice, make sure you get it right!

One of the greatest responsibilities we have as sales people is being the voice of the customer. This means that we must strive to always relay the customer’s message truthfully and most importantly accurately, because, very often the future of the relationship between your company and their customer is in your hands.

This means that you are the one person in the company who has the be the customer expert. It is your duty to learn everything about your customers and make sure that you convey that information accurately to the rest of your organization. Be careful to speak without bias so that you never put your “spin” on what the customer is thinking, or doing, for your own self-serving reasons.

Here are nine things to keep in mind when acting as the relationship manager between your company and the customer.

  1. Knowledge: Know everything you can about your customers, including the business they are in, the amount of your kind of products they buy, what their hot buttons are, and what their needs are both today and in the future.
  2. How to win the business: Learn what it takes to win their business. Find out who they are dealing with, who your competition is, and why that competition is successful. Learn what your customer thinks it takes to be a great supplier and then pass this on to your company.
  3. Be the news reporter: Keep your company up to date on any changes in the status of your customers all the times. Are they in trouble financially? Are they buying someone? Are they going to be introducing a new product? Are they going to be sold.? All this information is vital to the customer/ company relationship and it is up to you as the sales person to make sure your company knows everything and I mean everything.
  4. Mediator: When problems occur, it is up to the sales person to help solve those problems. This is when she really earns her money and this is when accuracy in communications is especially important. This is particularly true when things heat up, when the relationship hits the skids. The sales person is the one who must cool things down. She is the one who must do everything possible to sustain the relationship at all costs. She is the one who makes sure that the company does not win the battle but in the end, lose the war.
  5. Bearer of bad news: As they said in the Godfather, management needs to hear the bad news immediately! No matter how painful it is to hear, bad news should be communicated right away.
  6. Be an Armadillo: Yes, a true sales person must have skin as tough as an armadillo because there are times, especially hard times, when the company is going to want to shoot the messenger because they are so angry and frustrated about the news they are hearing. This means the sales person has to hang tough. He should be able to relay the customer’s negative message with clarity and without exaggeration. He cannot let his own feelings get in the way of conveying the customer’s sometimes insulting message, in a way that will get the point across but at the same time will not pour gasoline on the fire. This is a tough, but important one.
  7. Provide a live butt to kick: When the customer is particularly irate it is up to the sales person to go directly to that customer an offer himself up as the sacrificial lamb, to provide that fresh live butt for the customer to have the satisfaction of kicking. You’d be surprised at how often this works and how often it serves to diffuse the situation.  A great sales person will show up and provide the customers the opportunity to vent. Believe it or not, the sales people who do this are the most respected in the business on their industry.
  8. Accurate and complete conveyer of all news: Sales people should make sure they know all the facts in any critical situation. They need to be able to correctly report any problems a customer is having with their company. If it is a technical problem they need to know all facets of the problem so they can convey it accurately to the people at their own company. They need to be able to anticipate the questions that their engineers and Quality people will ask to be able to develop the right solution to the problem as quickly as possible.
  9. Number one customer advocate: Always, the sales person has to put the customer first; and she has to make sure that everyone at the company does the same.

And finally, there is one more, under promise and over deliver, and that one is to never over promise and under deliver something that is often the case when it comes to sales people. Look, we know that a good sales person must be optimistic, but try to keep your rosy outlook in check. You are not helping your company out if you over forecast or if you let them know that everything is all good with that large customer, when it is not. No one likes surprises, especially negative ones, so no matter how much you would love to forecast that huge million-dollar order for this year. Make sure it’s in the bag before you do. It’s only common sense.

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That Won’t Work Here (And Other Excuses)

dan-6I don’t know about you but this drives me absolutely nuts. You’re in a meeting, you come up with a good idea but before you finish getting your idea out there, this guy across from you. You know the one, he graduated from the Dilbert School of discouraging new ideas jumps in with that smart smirk on his face and starts listing the reasons why it won’t work. And he has a great time doing it. After all your company hasn’t tried anything new since Nixon was president so why start now? Now this guy doesn’t deal in specifics, he doesn’t deal in what the general populace, the bulk of your customers, would think no he goes right to the exceptions, those few people who are not going to like your idea for that new product offering, a group that chances are make up about three percent of your customer base. Then he sits back and folds his arms and with that smug look of glee on his face as if thinking, “Great strike one for the great status quo!”

Or you get passed this guy, this objector this champion user of the word “but” and your idea is going to be tried, you are going ahead with it. Oh there are a lot of worried people around after all its not every day that your company tries something new and dar…well almost daring. Finally you are going to get a chance to see if you can bring you company into the 20th century (no that’s not a misprint I meant to say 20th century, heaven forbid you would be in the 21st. So you try your idea, you send out a mailing describing your offer and lo and behold it’s a hit! The majority of your customer love it; a whopping twenty percent take advantage of your offer and try it out right away. It’s all a great success right, it’s all good right? Well unfortunately two customers called in to complain. Yes two customers you sent the offer out to one hundred and twenty five customers but your company has doubts about ever doing it again because two customers complained. And here is what their complaint was, “if you can afford to make this offer then you are making much too much money and I want you to lower your prices to me.”

Well guess what? Deal with it. Handle that objection because there is always and this I can guarantee always someone who is going to say something like this. That’s just the way it is. There are always going to be some customers who are unhappy with anything you put out there. They are simply the corporate version of that guy sitting across the table from you with his arms folded and that smirk on his face, just looking for a reason to be unhappy.

Oh and another thing about those two customers’ objections, just a side bar here, but there are companies out there particularly in our industry who are absolutely petrified that circuit shops are making too much money, hell they are petrified at the mere thought of us making any money at all. Ours is one of the few industries where our customers hate it if we make a buck. Why is that… anyway that’s a column for another day.

But back to the point. If you want to be daring, if you want to try new things, if you want to do things differently from the way you have been doing them or even differently from the way the rest of your industry is doing things then you’d better be prepared to take some heat. You’d better be prepared to hear some objections. People hate change and people hate to try new things so if you’re trying something new you will have people hating you for it.

Remember a few years ago when a bright young man from Colorado got the idea to start doing some marketing so he started sending out postcards for follow-on orders and then he started sending out popcorn and coupons for pizza for his engineering and design customers? Remember that? Remember the brouhaha that caused? Critics jumped, jumped hell leapt out of their chairs screaming about all the reasons this was unfair, waving long lists of reasons why this would not work? Well that company is still going strong today and they are still giving away pizza and popcorn.

Then there’s my personal favorite, nesting, the art of putting multiple part numbers on one panel. Try this sometime. If you’re sitting around a table with a bunch of bored PCB executives at some boring industry event throw out the subject of nesting panels and you’ll see that table come alive faster than you can say “controlled impedance” You’ll be barraged with all kinds of derisive comments covering every negative aspect of that subject from one hundred and fifty reasons why it can’t work to why it can’t work in their company to accusations that the people who are doing it are out and out cheaters! I warn you that if you decide to bring this subject up you’re better be prepared to take some serious heat; and if you decide to defend the fact that nesting makes sense you’d better be wearing your worst suits because it’s going to be covered with pasty mashed potatoes and rubber chicken before the night is over.

But nevertheless keep those ideas, inventions and innovations coming because we need them now more than ever it’s high time that the companies in our industry start thinking about how they are going to grow their business instead of how they are going to stay in business. It’s only common sense

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Be Curious. Hire Curious People

dan-7Albert Einstein once said that being curious is much more important than being smart. If you’re curious about something you are going to spend a lot of time and effort finding out everything you can about it. You are going to focus as much as you can on that subject. You are going to read books and magazines, watch documentaries, go on-line, and do research in short do everything that you can to learn all that you can on that subject.

If you think about it some of the biggest contributors to society have been people who were curious; Thomas Alva Edison was curious about everything from finding the right filament to make a light bulb work for longer than ten seconds to how to save sound on a wax disc to how to play that sound with a needle and a giant speaker horn. Henry Ford was curious enough to try to figure out how to make an affordable car by inventing the assembly line. Newton was curious enough to figure out why an apple fell on his head…or so they say, I have my doubts about that one. But anyway, he was curious enough to find out why things fell that he figured out gravity and how it works. Okay you get it curious people are people who move that great tin foil ball of civilization down the road to progress.

Now let’s apply it to our profession, let’s apply the quality of curiosity to sales. How can being curious help you to be a great sales person? How does being curious help you to win and keep customers? I just read a book where the author said that when he hires sales people the number one thing he looks for in those sales people is curiosity, their level of curiosity and if he sees that in a candidate he will hire that candidate whether or not that person knows anything at all about the product he is going to be selling. Because of course that person’s curiosity will drive him to find out everything he can about that product without anyone having to urge him to do so.

A curious person will want to know everything about the product she is selling. Not just what her company is selling today but everything else about the product from how it was developed in the first place which includes the history of the product, to how it is used, to who uses it, to why they use it. In the end that curious person will know much more about her product than people who have been dealing with the product for decades.

That person will be curious about the companies who use his product. The customers. He will study his customer base. He will, get this, ask his customers why they use this product, which type of product they prefer and how he can make his product or service so good that they will buy more from him than anyone else.

He will also talk to those people who are building the product he sells. Not only to find out what they are working on now but what they will be working on tomorrow. In short, he will be looking into the future of the product.

But even better than that her curiosity will drive her back to her customers to find out where their business is today and also where it is going in the future so that she can have her customer literally telling her what kinds of products they will need in the future so that she can go back to her own company and advise them on the types of products they should be developing in the future that will be the most useful and appealing to their customers.

And that curious person will also be constantly analyzing the way he does things, seeking a better way to do them. He will always be trying to find a better and more effective way to grow his customer base. He will always be developing new and innovative ways to make his customer sales calls more productive. He will invent better reports and matrices and he will be finding better strategies to sell his products.

The curious sales person will use her curiosity to find ways to be the best sales person in the industry. She will study other successful people to find out what makes them successful. And thus, she will use her curiosity to become as successful as they are.

A curious sales person will do everything, study everything and learn everything to be the best he can be. He just can’t help himself because he is driven by is overwhelming curiosity. Are you curious enough to be successful? Are you smart enough to hire curious people? You should be. It’s only common sense.

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Don’t Be Afraid, Have Courage!

dan-5They say that courage is the number one quality of all successful companies. You have to have courage to get anything done. Because it is a big scary world out there and if you don’t have the guts, think courage, to face it you will not survive.

The more I work with companies the more I realize that all this talk about having courage and not being afraid to do the right thing when it needs to be done is true. From when it’s time to hire someone, or to reprimand someone or yes, the worst one of all to fire some many of us will do anything we can do avoid doing the right thing

The best run companies are run by managers who are not afraid do what they need to do. Conversely poorly run companies are managed by people who cannot make a decision if their life depended on it. They procrastinate until it’s too late participating in analysis paralysis and using that to fool themselves into thinking that’s doing something

Great managers act. Great managers are not afraid of anything, they are:

  • Not afraid to get involved in that new technology even if buying that equipment is risky.
  • Not afraid to hire that new process engineer, even if he is very expensive.
  • Not afraid to have a hard talk with someone who is not doing his job.
  • Not afraid to change the direction of the company.
  • Not afraid to take the time to learn new things.
  • Not Afraid to change their minds.
  • Not afraid to fire that person who needs to be fired.
  • Not afraid to do the right thing for their customer even if it hurts the company.
  • Not afraid to put the customer first, whatever it takes.
  • Not afraid to say she was wrong.
  • Not afraid to build that addition.
  • Not Afraid of handling cash flow issues head on.
  • Not afraid to say “no” no matter how hard it is.
  • Not afraid to make that decision when it has to be made, even if he doesn’t have all the facts.
  • Not afraid to stand up against conventional wisdom.
  • Not afraid to face his own flaws and do something to fix them
  • Not afraid to hire people smarter than she is.

Years ago, I was working with a company that had cornered the market on the ability to fabricate high tech PCBs from a material called LMR Kevlar. I say “cornered the market” because they were literally the only shop in the industry that had managed to learn to build MLBs with this very quirky laminate. Every year for five years we could count on at least three million dollars of business from two customers, two of the defense and aerospace industry’s OEM’s. Our relationship with them was very good and the business was just about guaranteed. Then one day we were faced with a very difficult decision. We had been working with several laminate suppliers and had helped them develop a new product called Thermount. The thing about this new Thermount material was that it had all of the characteristics of LMR Kevlar but it was much easier to work with and was only one fourth the price. This meant that just about any good board shop could now build boards that had the need for LMR Kevlar; so we would lose our edge over our competitors plus the price of the over-all program would go down because the material was now much less expensive.

“So, what do we do?” We asked ourselves. Do we tell our customers about Thermount and stand a chance of losing the business? Or, best case keeping the business but at a much lower price, or do just stay mum about it? In this case, the best and the right thing to do as good vendors… and good people was to tell our customers about this better solution. It was an easy decision but a hard pill to swallow in the end. And yes, they used LMR Kevlar for only one more year and then switched to Thermount which of course opened the program up to a much more competitive environment. We ended up losing the program a couple of years later. But, telling them was the right thing to do and we were not afraid to do it. It did take courage to face the fact that we were going to hurt our sales by a few million dollars of very profitable business a year. Now, looking back on this incident over twenty years later it is a decision that we are proud we made.

Never be afraid to do the right thing, even though sometimes it will hurt, it will pay off in the end. By the way even though we lost that particular program we did have a good ongoing relationship with those customers for years to come. Its only common sense.

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