Archive for category Opinion

If We Don’t Work Together, We May Not Work At All

dan-7

We have a problem in this PCB industry of ours.

We are so focused on beating the other guy, that we don’t spend much time working on how we can make our own companies better. In fact, we are always so focused on disrespecting our competitors that we would rather see them fail than succeed. I have noticed that there is usually some satisfaction when we hear that another shop has gone out of business.

Think about this. Should we be happy if one of the few shops left in this country goes out of business…really? We are already feeling the negative results of the steadily diminishing number of shops in our part of the world. The numbers are up for debate but from what I can estimate there were once at least twelve hundred shops in North American in the early eighties and now there are only around two hundred, and that’s individual locations not companies. If you consolidate all the TTM locations under just the name TTM you get even fewer.

This is what has happened while we were cheering the loss of our competitors:

  • We have lost our leadership position in the PCB industry
  • We are no longer the technology leaders we once were (Yes, it’s time to quit telling ourselves that all the technology is developed here in this country because it is no longer true)
  • We no longer have the strong vendor base we once had to the point where if you have a shop in the Southwest or the Northwest you are no longer seeing vendors as often (if at all) as you once did.
  • Which means that we have also lost the technical support we once relied on with having a strong vendor base.
  • Our customers especially the defense contractors are so worried about the sparsity of qualified American vendors to handle their defense and aerospace PCB needs that they are petitioning the DOD to allow them to go offshore, or at least to work through American contract manufacturers who buy their boards from “qualified” offshore sources.

None of this bodes well for those companies that are left. We have two choices, we can keep beating the crap out on one another until there is no one left or we can figure out how to work together and become strong partners instead of weak and weakening enemies. Think about it, maybe it’s time for the remaining companies to circle their wagons and figure out a way to start working together and in a cooperative effort to stand together and make the American Board industry as strong as possible.

Collaborating with one another is the only way to go if we want to make the future ours, heck if we even want to have a future. PCB companies need to find ways to come together and present a stronger front to their customer base.

Instead of cheering for the demise of our competitors we should be making them partners in these ways:

  • Communications: Start talking to each other. Find out what your competitor can do that you can’t and work out an agreement.
  • Share technology research work on new innovations together.
  • Share capabilities: One shop might have via-fill equipment while another has plasma etch by working closing together and doing some bartering both shops will be able to offer both capabilities.
  • Combine your buyer power. Remember the old granges where farmers got together to buy seed and equipment and get a better deal from their vendors? That’s the idea. If four board shops get together to buy four drills from one equipment vendor, they are going to get a much better price than if each buys their own. And they will also have more influence when it comes to having that equipment serviced.

These are just a few of the things that shops could be working together on. If they choose. They say that if you don’t define your future someone else will. Aren’t you tired of someone else determining your future? Don’t you think it’s time you did something about it? It’s only common sense

Advertisements

Leave a comment

Peeking Into The Future: The Future Is Here Now!

dan21

I like to read anything I can get my hands on, when it comes to predicting technology of the future. I have been doing this since discovering Alvin Toffler’s ground-breaking book Future Shock, decades ago. Since then, I have read several books predicting the future, and so many of the things they talked about in those books have come true. Things like a book in the nineties that said that one day we will be watching TV shows, when we want to watch them! Can you imagine? Or, that someday there will be rockets that can go into space and then come back to earth, and safely land. Wow! Or cars that will drive themselves? Who could believe that?

I was reading an article about the future recently and realized that the future is here right now. That we are living in an age where the things we once only dreamt about are now here. We have devices right now that literally run our house, devices, that allow us to check on our houses from thousands of miles away, that allow us to turn off our lights in our living room in Montana, while we are enjoying a fine meal in a restaurant in New York City.

We have come to expect change for the better because it has been happening so quickly, in the past twenty years, that we are at point of taking things for granted. A well-known comedian does a bit about the fact that all we do is complain about air travel and what a pain it has become, when we should really stop for a minute and  realize that in just five hours we are flying coast to coast in a long metal tube, something that would have astounded our grandparents a few generations ago, but we just take it for granted instead complain about the size of the bag of peanuts.

I remember friends coming over to watch the 1975 world series, on my brand-new Magnavox 25-inch color television, and being impressed at the size of the screen, one friend even commenting that it was like being in a movie theater! And now who wants a puny 25-inch television set? Remember when T.V.s were furniture?

Now we would not be surprised if there were, wait a minute, there are one hundred foot and bigger televisions.

Here is what we are we can expect in the future and we are not that excited about:

Going into space: Yes, all of us expect to be able to take a ride into space sometime in our lifetime and are not that impressed anymore.

Robots are going to take over manufacturing, and, of yes, also brain surgery: Yes sure, tell me something that I don’t know…yawn.

Special printers will be able to make anything: Oh, wait we have that already, don’t we?

Our house will automatically adjust to our preferences and needs: Bill Gates already has that, and we are on our way to having it as we speak.

Cars are going to be able to drive themselves: Yeah, yeah, we know that what else do you have?

Sorry, I am boring you, maybe I can come up with a couple you have not heard about:

Your shirt that will do CPR: MIT is working on this right now. The shirt will detect if you are having a heart attack, send emergency alerts, and yes, administer CPR.

Shoes, that diagnose your overall health: Using the nerve endings in your feet, shoes will have sensors to track body weight, heart rate, blood pressure and activity and send data and alerts to your caregivers.

Stem cell patches that will replace damaged heart tissue:  The heart cannot regenerate itself after a heart attack, but animal studies with tissue patches, have shown that cells delivered in a premade tissue patch will help grow new cells. A patch therapy using contracting cardiac muscle cells could be available in trials in twelve years.

Your voice will be able to diagnose your health: New technology will sense changes in your voice from tone, to speech patterns, and create a number of brain, muscle, and respiratory health measurements to help identify depression, Alzheimer’s, Parkinson’s disease and more.

You will be able to put yourself in your friends into the movies: It’s called hyper-individualizing a movie so that you can put your face and body in the place of the actor and put them on the screen, so that you can be the hero of the movie.

Pretty cool stuff, right? Amazing, but, I must wonder how long it will take us to absorb these new innovations and start taking them for granted. I predict that it will happen by the time you’re done reading this column. It’s only common sense.

By the way the information about new technology comes from that deep scientific journal, The AARP Bulletin!

 

Leave a comment

The Future of The North American PCB Industry Is Up To You

dan21No matter what happens in the world, success is up to you

There are about 230 boards shops left in North America and out of those about 175 of them are at $10 Million or less and out of those about a 100 are at $5 Million or less and out of those 25 are at $1 Million or less. For those who want to do the math, that leaves only about 55 that are doing $25 Million and over.

So, most of the board shops left in North America today are $10 million and under and the majority of those smaller, much smaller than that.

Now, the Global PCB market is just shy of $60 Billion dollars. Considering that the North American market is about $12 Billion dollars with about $4 Billion of that being built here in North American, there is still plenty of business to go around especially for those shops that are under $10 million.

Our North American market still has about $4Billion being built domestically. Which means that those smaller board shops have very little of their success and failure relying on what the rest of the world is doing. Oh, sure there is the trickle-down effect, that cannot be denied but on the same token if you are the sales manager of a $6 Million dollar a year American board shop, stop complaining about China your success is in your hands

If you run a $6 million dollar a year board shop and you are doing defense and aerospace work you are in even better shape because your business cannot be imported thus you are in even better shape than your commercial board shop counterparts who have no protected business.

So, what is my point? Where am, I going with this? It’s simply that the success or failure of most board shops in this country is completely in their own control. The real factors they should be concerned with are simple business factors.

If you find yourself in this space here is what you should to be concerned about:

1. Quality: Is your Quality in the upper 90th percentile? Like 98 or 99%? Are you customer returns minimal somewhere between next and nothing? Because if your Quality is less than that you are throwing your money away faster than you can make it. I can also safely assume that you are burning through customers as well. In this high-performance age, if your company is not performing at peak then your customers are not going to stick around. As Ford likes to say Quality is number one.

2. Delivery: Yes, delivery. Companies, you customers, need their boards on time…all the time and if you can’t do that consistently then you are going to lose customers at an alarming rate.

3. Price: Sorry but we need to talk about price. I know that is tough to hear but the price of something is based on what the market is willing to pay for it. It is not based on anything else. Our job as business owners is to provide a price that is competitive and most importantly marketable. By the way if your Quality and delivery are not where they should be neither will your price. To compete in the world today you have to be as efficient as you can possibly be, that means there is no room for poor performance.

4. Service: Customers are going with vendors who are easy to work with. So much can be overcome by great customer service including the competition. Ours is an industry whose customer service is down around the service level of the department of motor vehicles so it would not take much effort to out-service the competition!

5. And yes of course sales and marketing. You have to tell someone who you are and what you do and you have to have a clear and focused sales strategy.

Think about these five things. There is nothing difficult here. There is nothing extraordinary here. Everything mentioned above will only benefit your business as well as make sure that your company thrives in this economy,

And guess what? If everything mentioned above is working you will not have to worry about the Chinese or your competitors or your demanding customers, you will be ahead of the game and running your own race to success.

It has become too easy to blame outside elements for the difficulties we face but going back to the beginning of this column, if you have a board shop that is currently doing $ 6 Million and you want to get to $7 Million a year it is entirely up to you and based on how well you run your business. Putting things in perspective you are trying to get one more million a year in revenue and that translates to a little over $ 83,000 per month. In a global market place that is $60 Billion a year, in a North American marketplace that is about $4 Billion a year, your one-million-dollar growth is entirely in your hands. It doesn’t matter what the Chinese do, it doesn’t matter what your competition does and sure doesn’t matter what goes on Washington all that matters if what you do, how you perform and how you price and yes, how easy you are to deal with. It’s only common sense

Leave a comment

How Many Times Do I Have To Tell You? Stop Talking And Start Listening

Dan - books

I’ve been concentrating on listening lately. I mean really listening, not doing what I usually do, which is to wait for the person I’m talking with to finish talking so that I can tell him all the great thoughts I was formulating, while he was talking. It’s not easy to listen, we are all so in love with the sound of our own voices, that we barely take the time to really listen, and really hear, what the other person is saying.

Entrepreneur, Richard Branson, claims that he practices what he calls “aggressive listening” He says that most of us view the act of listening as a passive act, when, it should be an active action. He goes on to say that “listening is 100 percent about engaging; it is in fact the most emotionally intense of human activities.

Tom Peters says in his new book, The Excellence Dividend “I firmly believe that if, after a half-hour conversation, you are not exhausted, you were not seriously/fiercely/aggressively attentive.”

Once again from Peter’s book: The Good Listener’s Rules

 

  • A good listener exists totally for the given conversation. There is nothing else on earth of any importance to me for the time I am listening.
  • A good listener keeps his/her mouth shut
  • A good listener gives the other person time to stumble toward clarity without interruption. No matter how long the pause (keep quiet) when someone is thinking before talking is not an invitation to interrupt.
  • A good listener never finishes
  • A good listener becomes INVISIBLE; makes the respondent the centerpiece

 

And to quote the great humorist Will Rogers, “Never miss a chance to shut up.”

Okay, why am I going on about this listening thing? Why do I bring up this subject two or three times a year? Simple, because I am a sales consultant and I am a total failure when it comes to getting people to listen. Oh, I don’t mean listening to me. No not at all, I mean listening to their customers. Every sales person I have ever come in contact with is a terrible listener. You put a bunch of sales people in a room like say, at a sales meeting, and all you’ll hear is chattering, you will never see everyone listening as one person speaks. I dare say, it is the single most challenging problem facing sales people today. They just don’t get the fact that no one ever learned anything while talking.

And their worst fear, I mean what gives most sales people nightmares, is silence. Silence is the great enemy of listening. There has never been a sales person who could stand silence. They feel it is their duty to make sure there are never any silences, in any room they are in. And the fact that silence makes them uncomfortable, is the reason that so many sales people fail.

What about you? Can you handle the silence? Are you a good listener? Here are a few questions to ask yourself:

  1. When you prep for a sales call, do you focus on what you are going to tell the customer? Or, do you focus on what you are going to ask the customer?
  2. When the customer tells you that he is seriously considering giving you the order. Do you remain quiet, and wait for what she is going to say next? Or do you just keep talking, piling on the reasons why buying from you be the best choice?
  3. When your customer is angry and wants to tell you what he does not like about your performance, do you keep quiet, giving him plenty of time to get the complaints out…to vent? Or do you keep interrupting him, so you can give him the excuses for why you messed up?
  4. When a customer is telling you an interesting story, say about meeting a famous person, do you listen quietly and appreciate not only the story, but the enjoyment she is getting from telling it? Or, do you only half listen because you cannot wait for her to finish so you can tell her about an even more famous person you’ve met?

I think by now you get the point. In each of these examples there was a proper way to have a conversation, and a wrong way, which way did you go? If you were only thinking about what you were going to tell that customer; or kept piling on the reasons, he should buy from you; or if you kept making excuses while your customer was balling you out; or if you have a tendency  to play “can you top this” with the person who is telling you about the famous person she met, then you need to go to listening school, You need to take the art of listening seriously enough to read Richard Branson’s recent book, The Virgin Way: How to Listen, Learn, Laugh, and Lead. And start listening for a change. It’s only common sense

 

Leave a comment

YES! Finally, The State Department Shows Its Teeth About ITAR

dan-5I love it! A good friend of mine sent me this article he received in an email announcement from the law firm of WILLIAMS MULLINS.

Read it and weep ITAR offenders! Law abiding companies rejoice!

Check this out:

State Department Announces Another Major ITAR Enforcement Case and $30 Million Penalty

By: Thomas B. McVey

On April 25, 2018 the Directorate of Defense Trade Controls (“DDTC”) announced another major enforcement case for violations of the International Traffic In Arms Regulations (“ITAR”).  The case, involving FLIR Systems, Inc. (“Respondent”), involved a wide range of alleged violations and resulted in a $30,000,000 civil penalty.1  This case is a sobering reminder of DDTC’s serious commitment to investigate ITAR violations and provides an important compliance lesson for U.S. and foreign companies.

The Respondent is a manufacturer of advanced sensors used to protect borders, gather intelligence and protect critical infrastructure.  DDTC alleged that the Respondent engaged in multiple violations of the Arms Export Control Act (“AECA”) and ITAR Part 127 including:

·    Failure to apply for and manage export licenses;

·    Failure to comply with terms, conditions and provisos of licenses;

·    Poor management of use of license exemptions;

·    Inaccurate or incomplete shipping documents;

·    Improper actions at trade shows;

·    Failure to obtain Nontransfer and Use Certificates;

·    Failure to properly decrement or report quantities of items shipped;

·    Failure to properly record shipments;

·    Failure to return items to the U.S. under temporary export licenses;

·    Failure to file reports of payments of contributions, fees and sales commissions as required under 22 CFR Part 130;

·    Multiple recordkeeping violations.


DDTC also identified significant alleged violations by the Company for permitting certain of its employees who are foreign or dual nationals to have access to ITAR-controlled technical data stored in the Company’s computer system.  DDTC alleged that the Company failed to have adequate controls in the data system to prevent foreign national employees from accessing controlled files through their use of the system.  In addition, DDTC stated that the Respondent failed to collect citizenship information necessary to determine licensing requirements for its foreign-person employees, including employees holding nationalities from more than one country.

As many of you know this is one drum that I have been beating to death for many years now. Look, I am a free trade guy. I believe that in the true sense of capitalism all good American companies should be able to fend for themselves. They should be able to make it work on any level, okay fairly-level playing field, but. I never abide cheating and when companies violate ITAR rules they are cheating, and they should face the consequences.

For far too long in this country certain companies both OEM’s and CEMs have been playing fast and loose with ITAR laws, especially when it comes to printed circuit boards. They have repeatedly tried to plead to our government that our U.S. board capabilities have diminished to the point where they have to go offshore (read non-ITAR) to buy their boards. Or, up until recently that the bare PCB is too lowly and component to earn ITAR protection. Fortunately, IPC did finally convince the DDTC that the boards were an integral part of proprietary products and got them written into the rules. So, now there is no longer a gray area. It is right there in black and white that PCBs are ITAR protected and that when the call out is for ITAR PCBs they had better be built in the good old USA; or like our friends at FLIR they are going to be punished.

Hooray! I have had too many of my PCB sales friends telling me stories about actually losing military programs to offshore vendors because their customers chose to go offshore to buy their PCBs. PCBs that needed to be built in an ITAR compliant facility.

I had one incident where a company I was working with mistakenly got the wrong copy of a military RFQ and noticed that instead of getting their own they got the one for a Taiwanese PCB fabricator. When the inside sales person called the buyer to point this out and further point out that this was an ITAR job and that the RFQ data package should never even leave the country, the buyer became furious and cut us off from quoting the package!

This story indicated to me that the true ITAR violators are not really the non-ITAR companies taking the orders and building the boards but rather the OEM’s and CEM’s who buy the boards from them in the first place.

Look it gets down to this. It is hard enough to make a living selling boards in the United States these days without having to deal with this illegal unfairness. And what the DDTC did with FLIR this week should be a loud and clear warning to any other companies that is even thinking of getting their ITAR boards from a non-ITAR supplier. It’s only common sense.

Leave a comment

The “We’re Behind Quota Already!” Emergency Crash PCB Sales Plan

dan21So the year has started badly. You thought all that start of year pent up demand would have you rocking.

But sales are thin and the funnel is pretty darn dry.

You’re beating on your outside sales team and they are doing everything they can with their customer base. Or worse yet you don’t even have an outside sales team…don’t laugh many companies don’t. They rely only on word of mouth. They feel that good enough has been good enough so far and that things will come around, just like every other time in the past they have come around. But alas, this time it’s different; this slump has been going on for months and now you are entering the panic mode and you have to do something!

The problem is you have to do it now. If something doesn’t change soon you are going to have to close up shop and that is something you just don’t want to face.

You are really behind the eight ball because most well-organized sales initiatives take about 90 days to get going and at least 120 days before you start seeing results. You should have started this months ago, hell you should have been doing it all along, But that’s another story…I’ll save that lecture for another day.

So now you have to do something, to make something happen…not rocket science that. But it is a fact. Do something and do it now!

If you’re going to do something at least have some sort of plan that will stand a chance of getting some sales in the house before it closes.

Here is that plan

Here is an emergency plan for increasing sales right away.

The most important thing you can do at this time is to try to get sales as quickly as possible. Create a sense of urgency…not panic but urgency. Let your team know that their jobs depend in getting sales into the house now!

For this you will need to get all hands on deck. You will have to push the inside sales people you do have and then recruit from other departments. Put anyone who can handle a phone on the phone and do it now!

Part One: Using the current database/ how good is our data base at this time?

  1. Try to contact as many customers and potential customers as possible.
  2. Current customers
  3. You need to go through and evaluate this list immediately.
  4. If they are nearby they need to be visited to see what they have going and to see if we can do anything for them.
  5. If they have not ordered in a while ask them why not? Ask them if there is something you can do to get going with some orders again
  6. You need to discuss with them how they are doing
  7. Go over the orders you have in house and ask them if they have anything else you can work on
  8. Review your finished goods list with you and try to sell their boards which you have in stock.
  9. Work with them to help you help them.
  10. And sell them on buying from you right now. Tell them you are willing to make a deal they cannot refuse,

Part Two: Orphans: Customers we used to do business with.

  1. They are the next group to contact.
  2. Why did they leave?
  3. Do they have business now?
  4. Make a priority list of these and start contacting them immediately.
  5. This group is very important. They know you and they once did business with you. They need to be contacted. This is what we call the “low hanging fruit”

Part Three: New potential customers:

These have to be customers where you feel you are close to getting something from them. Of course you also have to work on the long term, but for the sake of this plan you need to go after customers who may want to send you business in the near, very near future.

Part Four: Measure your way to success: This is important: you need to keep track of all the sales calls you make. You need to put together some sort of plan with goals like how many customers do you want to talk to in a day? You should be measuring the following:

  • number of calls a day
  • What they said
  • Any actions required
  • What is the next step?

This is best done using an excel spread sheet. Review it every o day to make sure that things are happening and progress is being made. This is hard work, but it works. You have to make something happen.

Part Five: Do some guerilla marketing:

  1. Create a pitch: A reason why customers would want to come to you. Free tooling, great price whatever, and just some kind of promotion.
  2. Permission marketing: Take a good look at your data base, sort it out and then from there you can develop a permission marketing plan. You can choose from one or some or all of these methods of reaching out to customers:
  • Postcards (yes believe it or not that are back and they work in this e-mail world)
  • Email
  • Fax (when is the last time you tried this? Imagine getting a fax sales offer today!)
  • Direct letters (who can resist opening a letter. Especially if the address is hand written. No labels please.
  • Literature

You need to be sending these out every two weeks, like clockwork. The most important thing is to get in touch with as many possible in the shortest amount of time.

Now come closer….here is the real secret about increasing you sales…if you do something, something will happen. Like I said this is not rocket science but it is only common sense

Leave a comment

Where Will We Be In Five Years?

dan-7A friend of mine got me thinking the other day when he asked me what I thought the North American PCB industry would look like five years from now. That’s an intriguing question isn’t it? A question that I decided to really think about for the next few days.

Certainly, I knew already that the next few years would be the most transitional years in the long history of the North American PCB industry. An industry that started in 1951 when America’s first independent board fabrication company, Photocircuits was started. That made me think of some of the big names in the industry, companies that had once dominated, but now were gone. That list is long obviously, since we have gone from well over one thousand shops (some same as high as eighteen hundred while others say the number was twelve hundred) to now where there are just around two hundred. Shops left in North America. Remember them? Photocircuits, Maine Electronics, General Circuits, Capital Circuits, ACI, The Bureau, Altron, Zycon, Hadco, Pacific, Diceon, Rockwell Collins, Advanced Quick Circuits, Tingstol, Coretec, Bartlett, ASI, Continental, and many others too many to remember, all gone, existing only in the memories of those of us who worked for them.

So, back to the question of the day. Where is our industry going? What will it look like in five years…or maybe less? Well, here are a few things I know:

  • Some of our more prominent companies are on buying sprees right now. At least three American companies are buying everything they can get their hands on, with an end game of a big payout in the next few years. These companies have three things in common. One,, they have an aging management team looking for that last payout. Two they have venture capital money behind them and three, they are more interested in the top like than the bottom-line, don’t get me wrong the bottom-line is still important since a company’s selling price is determined by a multiple of their EBITA. But, that all important top line is what attracts buyers and their investors. So, watch these companies keep buying and growing. They are the ones I am talking about. This means that there will be fewer and fewer shops as the small ones get “vacuumed” up or as I prefer to call it, “TTM’ed”
  • So, who is going to buy these companies? Who is going to spend those big bucks on these American-based companies. Well, think for a minute…what country in the world has big bucks? Ummm, let me think. Yes, that’s right China. The Chinese are coming, and they are coming with their dollars, and their global ambition. Some of the big Chinese companies have already bought companies in Europe and they are now setting their sights on North America. This is a not a prediction this is a fact. In the next twelve months you are going to see a Chinese company swoop in and buy an American PCB company. It will not be a large acquisition at first, but it will be the beginning of a trend.
  • Sadly, we will continue to lose North American shops. Those who refuse to change will choke on their own immobility. They will go down and the last thing we will hear from them will be the dying words. “but I never had to do any sales or marketing in the 70’s and had all the business I needed” It will be too bad for sure, but it is inevitable as these companies hold on to the past a and refuse to adapt to the times.
  • The North American market will continue to grow. Right now, the North American market is rising to over eleven billion dollars and growing every day. At this time barely three billion dollars-worth of PCBs are being built in this country while over eleven billion are purchased, obviously that means that eight billion dollars are built offshore. That will change with global acquisitions on the horizon, a larger percentage will come back to be built here in North American…but by foreign owned (fully or partially) companies.
  • Mexico will start to be a factor as the Mexican demand for PCBs increases at a steady rate. This will also contribute to the growth of North American PCB fabrication.

Finally combining these trends this is what the North American PCB industry will look like in five years. First, we will be part of the global PCB market place as the world gets flatter. Our companies will be larger and multinational. The number of shops will diminish but the capabilities and capacities of the American shops will grow. The North American fabricators will be part of multinational companies with locations all over the world.

Take the automotive market for example, the prototypes and pre-production phases of a part number will be fabricated in the U.S. and then the production will go to Asia. But the difference being that the part number  will remain in the hands of the same company for the life of that part number. The same will apply to other markets as well.

These are exciting, if not outright historic, times but that the North American market will go in this direction is inevitable. As the great economist Thomas Friedman continues to advise us, commerce dictates the flow of the world economy and there is really nothing that governments and particularly politicians can do about it. Commerce like water always rises to its own level. And yes, as will be demonstrated by what happens here to our own PCB industry, the world is indeed getting flatter. It’s only common sense.

Leave a comment