Archive for category Opinion
Don’t. Just do what they can’t do instead.
While talking to a friend of mine the other day our talk turned to how American Printed Circuit Board shops can compete against the Chinese and other Asian board fabricators. After an extended exchange he turned to me and said. “It’s very simple Dan, the best way to compete against them, is to not compete against them.” After thinking about this for a few days I now realize that he was right, one hundred percent right. We let them play their game and we play ours.
Sure we are not that good anymore at what they do well, but on the same token they cannot do what we do either.
Look here is what they are good at: High volume low cost production. No matter how hard we try we will never have lower labor rates than they do. Well maybe never their economy is rising rather rapidly. But for the most part they have lower labor, they have more automation, they have more government support and yes they have also more support from our customers, some of our customers, you and I know who they are, the ones who learned technology from us and then sent it over to Asia to combine our technology with their lower labor and then eat our lunch for the sake of building the so called best products on earth with the cheapest circuit boards on earth.
That ship has sailed, we are never going to beat the Asians at this game, we never have and never will. The American companies who have survived and succeeded are the ones who did not bother to complete against the Asians in the first place, but rather looked for things that they could beat them at and then concentrated on those things.
What are those things? The things that we can do better than the Asians. Well let’s think about that for a minute. We are closer to our customers here in North America so shipping our product to them is much cheaper, as much as four times cheaper than shipping product from China to the U.S. Sure I know, I know all about those shipping containers and those slow boats from China and that mode of shipping does help with shipping costs, but it also eliminates the possibility of shipping small quantities fast. They have to have a whole lot of boards to fill those containers so there is no way that they are going to produce and ship five boards and have them to you in twenty four hours. No matter how much they say that can do it, and yes once in a while they can do it, but not as consistently as we can.
That’s right we can build and ship boards faster than anyone outside our country, so yes, that is an distinct advantage that we have over the Asians.
Technology is another one. As long as we can stay ahead of the technology curve we win. This is something that we have always done particularly well in this country and if we continue to focus on technology we will win the battle for that particular market.
So then building tough stuff fast gives us a strong advantage over our Asian neighbors.
Oh here are a couple of other things that Asian’s cannot do. They cannot build military boards, they cannot build mil spec boards or aerospace boards or anything that involves national security and no matter how many companies have tried to breach those compliances the door on doing that was shut nay slammed in the past year when the D.O.D. put our beloved printed circuit boards on the ITAR requirement list. So there. These products are to be built here in the U.S. and anything else is breaking the law. And as I always say do not hesitate to call the FBI whenever you learn of a competitor or even a customer who is trying to turn a blind eye to that fact.
And finally the granddaddy of all advantages we have over our competitors from the East is service. We can out service them any day of the week. Have you ever rejected boards you bought in China? That’s a lot of fun isn’t it? Did you ever try to find out what’s going on with those high tech boards you tried to have built in Taiwan? That’s equally as much fun isn’t it? NOT!
As long as we continue to service the hell out of our customers; as long as we produce what they need when they need it; as long as we keep ahead of the technology curve and as long as we build and deliver boards faster than anyone else in the world we will win. We will live another day we will thrive; and yes with all of the changes that are going on in the world right now; from innovative new product development, to on-shoring to re-enforced ITAR protection we’ll be doing just fine, just fine, it’s only common sense
Boldness is behavior born out of belief Groeschel
When things get tough, the bold ones will always take action. They will forego the feelings of dread, the anxiety about what could go wrong if they took that action or any action for that matter. They will not be afraid of the possible dire consequences if they do something different from what they have ever done before. They will, instead, analyze the situation and make the move that feels right for them…even if they have never made that move before…even if no one in their industry has made that move before.
Well folks, things right now are tough. We have hit the summer doldrums and getting appointments, never mind getting new business is difficult at this time. My friends, in sales talk to me about how hard it is to sell. Sales managers tell me how hard it is to motivate their sales people. Owners, tell me how hard it is to grow their business. American companies tell me they are being eaten alive by offshore competition and the offshore companies complain to me that their margins are not at all what they used to be.
But, meanwhile the PCB market continues to grow, with predictions of it hitting $70 Billion globally in the next few years; which only stands to reason when you look around and see electronics every. It only makes sense that the business is growing, but where is it all going? Who is making all this money? Who is growing these days.
What you can do or dream, you can begin it, boldness has genius, power, and magic in it. Goethe
It’s the bold ones who are thriving, the ones who are taking steps forward regardless of the possible dangers that lie ahead; without concern for delving into that great unknown.
We all have to face forward and play the cards we are dealt with a fearlessness that will drive us to success.
Here are a few examples of “risky moves” we are often faced with. I ask you to read these and ask yourself what you would do? I think the results will be indicative of where you stand in terms of boldness:
You hear of a small board shop in your area that is about to go out of business, do you approach them about buying their book of business and hiring some of their key people? Or do you worry about what could go wrong and keep doing what you’ve always done?
One of your sales people starts talking to a new customer, a customer with very high-tech requirements. Requirements that you will not be able to meet unless you buy a new expensive piece of equipment. This potential customer needs these technology boards so badly that he offers to go into partnership with you. He will even fund that new piece of equipment if you agree. What do you do? Do you take him up on his offer and go full speed ahead? Or do you worry about what could go wrong and keep doing what you’ve always done?
You have the opportunity to hire one of the top technical people in the industry. This person could take your company to the next level. But, he is a bit difficult to work with and he is very expensive. Do you take the risk and hire that person investing in the future of your company? Or do you worry about what could go wrong and keep doing what you’ve always done?
There is a billion-dollar contract manufacturer in China. You have a small contract manufacturing company in the Midwest. The large Chinese company approaches you about a partnership where you assemble the smaller quantities of part numbers and then use them to build the mega-volume in their facility. If this works everything about your company will grow from top-line to bottom-line. Do you shake hands and make the deal? Or do you worry about what could go wrong and keep doing what you’ve always done?
Another board shop approaches you about a synergistic partnership. You build rigid boards and they build flex and rigid-flex boards. They want both of your sales teams to sell one another’s products. It’s possibly a very good thing. Your sales people are always coming across flex and rigid-flex requirements that you have to no-bid, while on the other hand it would be good to have additional sales feet on the street selling your products. What do you do? Do you shake hands with your new partner? Or do you worry about what could go wrong and keep doing what you’ve always done?
You have just met someone, an IT guru who can set you up with web site that will offer “no-touch” sales. You have been selling the traditional way with live sales people visiting live customers in real time. You are suspicious of this new kind of selling. You know that some companies are very successful at it. But it is just not the way you are comfortable doing business. Do you hire the IT Guru and go for it? Or do you worry about what could go wrong and keep doing what you’ve always done?
So how did you do? What would you do in these situations. I know what I would do and I know that those bold ones who are succeeding in business today have done. They have made that bold move, that game changer that was a little bit scary at the beginning but has paid off in the in. They dared to be great. Its only common sense.
If you have the courage to begin, you have the courage to succeed. Kushandwizdom
Author’s note: I wrote this column last summer, but thought it was particularly fitting given my column on the DoD a couple of days ago.)
The young sales person had been waiting patiently for the buyer to come out for almost an hour. He was a bit nervous and also excited because he was finally here. It had taken him literally months to get here. He had worked very hard with prospecting and research and cold calling and leaving messages but he had persevered and in the end it had paid off he finally got an appointment with Mr. Big the buyers for one of the largest defense contractors in the country. And now he was ready. He had his presentation memorized, he knew that his pitch was perfect and there was no way he was going to fail, no sir, not after having come this far.
And now finally Mr. Big came out and motioned him to follow him into one of those little rooms off of the lobby.
Mr. Big: Okay kid you’re finally here, I’ve got to hand it to you you’re one persistent little SOB so tell me what you’ve got.
Eager sales person (ESP): Well sir let me tell you about me company.
Mr. Big: Hold on now son, before you do that let me ask you some questions to make sure we can even do business with you at all. After all we are the largest defense contractor in the country. We are the defenders of not only this country but also the free world so we can’t have just anyone build our printed wiring boards. Okay let me ask you kid. Are you ITAR Registered?
ESP: Yes sir we are.
Mr. Big: And of course you have ISO?
ESP: Yes of course sir.
Mr. Big: And you have your 55110?
ESP: Yes we do
Mr. Big: And you need your AS9100 you have that don’t you?
ESP: Yes sir we do.
Mr. Big: And 31032 do you have that? He asked eyeing the kid suspiciously.
ESP: Yes we that.
Mr. Big: And NADCAP you have your NADCAP don’t you?
ESP: Yes sir we do.
Mr. Big: And your company has instituted Lean Manufacturing?
ESP: Yes sir.
Mr. Big: and JIT?
ESP: Yes we have all of that. The young sales person was looking excited things were looking good for him now.
Mr. Big: How about a Laser Drill and an LDI do you have that equipment as well? Can you do HDI Microvia work?
ESP: (Looking a bit confused) well, yes we have invested almost four million dollars in the past year to make sure we could do HDI Microvia but I didn’t think your company bought HDI Microvia boards?
Mr. Big: No we don’t but we require all of our vendors to be top of the line in case we decide to go in that direction
ESP: Oh do you think you’re be doing that soon?
Mr. Big: I doubt it. But anyway let me ask you do you have our company’s new qualification so that you could qualify as one of our suppliers?
ESP: (Crestfallen) No sir, we have not done any business for you yet so we didn’t start on that qualification yet.
Mr. Big ( with a bright glow of satisfaction in his eyes) Aha, well son you’re going to have to go back to your company and make sure that you qualify to our new spec before we can even talk again. I shouldn’t have even met with you today.
ESP: (Trying be upbeat and not show his disappointment. So let me ask you sir once we have that qualification will we be able to do business with you?
Mr. Big: Whoa hold on there son I can’t commit to anything right now there are steps we have to go through you know. This is a process. After you meet all the spec requirements you have to fill out our survey form and then we you have to build five sample sets of boards, free of course, and then we do a site visit and the you have to submit some sample quotes and if you do all these things in a satisfactory manner we’ll consider putting you on the AVL and sending you some live RFQ’s. Finally if you can turn those quotes around in a timely fashion and if your price is the very lowest of all of our qualified bidders, then you might get an order. But there are promises son. As I told you we are the largest and I might add most important defense contractor in the country. Our products are used to defend the free world we have to be very careful who our vendors are right?
ESP: I see sir, I’ll go back to my company and well do the best we possibly can to be your supplier. Thank you for your time.
Mr. Big: Okay, but don’t come back until you are fully prepared and qualified to be one of our vendors after all…
ESP: I know sir (he says wearily) you are the largest and most important defense contractor in the country and you are saving the free world.
Mr. Big (as his cell phone rings) that’s right son you got it. See you later. I have to take this.
The young sales person leaves dragging his briefcase behind him as Mr. Big answers his cell phone.
Mr. Big: This is Big here what can I do for you?
Mr. Big’s company’s lead PCB designer (PCBD): Can you get me twenty of those 82113 cards as fast as possible Mr. Big?
Mr. Big: Probably but those are really hard to build when do you need them?
PCBD: We need twenty of them in five days.
Mr. Big: are you crazy it takes at least five weeks to get those boards. I can’t help you with that.
PCBD: Well we need them or we’re going to be late on the first system, what am I supposed to do.
Mr. Big: Well dummy why don’t you do what we always do when this happens? Go to one of those ‘no touch’ sites that advertise in the back of the magazines!
PCBD: I would but I thought all our vendors had to be fully qualified now, especially to our own new spec? Hell we’re not even sure where those boards are actually built.
Mr. Big: Oh forget about that if you need the boards get them from one of those web sites that’ll be good enough. Good enough for government work.
And they both laugh.
End of story
Great story right? The problem is it’s not just a story this happens every single day on our industry, every single day. Now for this one time only…this is not only common sense.
Last week a friend of mine sent me this excerpt from the congregational record. Yes, That congregational record. If this doesn’t set your hair on fire then nothing will.
“National Defense Authorization Act for Fiscal Year 2018”)…”
“Executive agent for printed circuit board technology
The committee is aware of ongoing efforts through the Department
of Defense Executive Agent for Printed Circuit Board Technology
(PrCB EA) to develop and execute a strategy to address the
declining printed circuit board industrial base and gaps identified
in the 2015 Department of Defense Executive Agent for Printed
Circuit Board and Interconnect Technology Roadmap. According to
a PrCB EA industrial base capability assessment, between 1980
and 2014, the printed circuit board manufacturing base declined 86
percent from over 2,000 manufacturers to just 280. The committee
is concerned that what remains of the U.S. printed circuit board industrial
base is becoming less capable of sustaining the superiority
of Department of Defense systems and growing increasingly dependent
on foreign suppliers, particularly China. This poses a risk
to the Defense supply chain in terms of the quality and trustworthiness
of the products it acquires. The committee supports continued
execution of PrCB EA functions addressing trust, supply
chain, organic capability, and research activities, including the continued
development of a network of trusted suppliers and
leveraging the DoD Trusted Supplier Program to include PrCB designers,
manufacturers, and electronic assemblers.”
So, finally they get it. Now, they realize they should not have let those contract manufacturers play fast and loose with ITAR requirements sending a lot of their defense and aerospace printed circuit boards to Asia to be built. Maybe those defense contractors should have thought twice before demanding that all of the components in their critical mission products be the cheapest that money could buy regardless of national security. Maybe the U.S. Government should have protected the PCB industry a little more rather than leave them to their own devices to sink or swim. Maybe, someone should have realized that it never was a “level playing field” that while our shops were left to fend for themselves they were competing with Chinese and Japanese government supported board shops. And yes, maybe they should have held those defense contractors more accountable when it came to where they were sourcing their components.
Look, I know that this is capitalism and I know that we believe in free market. I also realize and support the idea that commercial products from garage door openers to coffee machines to Blue Ray players should probably be built offshore. That is just a product of a flat-world global economy. But mission critical defense products…are you kidding me?
For years now the largest CMs and yes OEMs, have been giving the DOD one specious argument after another for why they needed to buy their PCBs offshore. At first it was the line of bull that the PCB was too low on the technology supply chain to be an ITAR protected product. And then when IPC finally convinced them that this was incorrect and that we should be on the ITAR list, those same companies told the DOD there were no longer enough qualified U.S. PCB suppliers to meet their needs (Thanks to them by the way) so that they were going to have to go offshore to meet their DOD component requirements.
Not that the State Department has been much help over the years when on one hand they hold our feet to the fire in terms of secrecy and the much needed, I admit, ITAR protection while on the other hand they sell their completed defense products ITAR protected circuit boards and all to our frenemies whomever they may be. By the way the care to guess who our largest Arms customer is? Iraq! Yes they are number one! And our latest good arms customer is, coming in at number three are the Saudi Arabians the true founders of the feast we call 9/11!
All I can say is that it is not too late for our defense and aerospace contractors to act more like Americans than Capitalists and protect our technology and our industry with the same enthusiasm that they protect our borders. They need to stop buying mission-critical electronics from off shore companies; they need to stop trying to squeeze every last dollar out of our remaining board shops and they need to start truly partnering with those shops helping them to stay alive. And the State Department? Well, they need to stop selling our proprietary national security weaponry to the highest bidder regardless of their current status of friend or foe. Oh, and one last thing stop blaming the shops for not keeping up, the playing field has never been level for them, they have been fighting an uphill battle for years and they have been fighting it with no help from the parties mentioned above. It’s time to cut them a break, hell, it’s time to cut the U.S.A. a break and keep our weapons here in the U.S.A. protecting United States citizens.
It’s only common sense
This column is meant for those customers who need printed circuit boards but don’t want to communicate with the PCB shops directly. It’s meant for those customers who believe that a PCB is just a thin piece of green plastic that anyone can build. This is for those companies who feel that the board shops are just job shops and that they should just shut up and build what they’re told to build. If you see yourself here, then read on because it is going to get worse…you’re going to get exactly what you deserve.
If you don’t want your PCB vendor calling with questions, then you’re going to get what you deserve. Here’s the deal; the PCB engineers are calling up to get all their data right and to make sure they deliver the best product possible. They are also calling you to suggest a better way since they have built thousands of PCBs and you have built none. I would warn you to beware of those vendors who never ask you a question because in the end, sooner or later your boards are going to fail and you will get what you deserve.
If you don’t even want to visit a PCB shop because you have no interest, because you feel that you know everything there is to know about PCBs, if you are thinking, “how complicated could it be putting out these little pieces of green plastic?” then you are going to get what you deserve. The more you know about the PCB fabrication process the better you will be able to design your boards. And by the same token, if you think there is nothing to learn, then of course, you are going to get what you deserve.
If you think that all PCB suppliers are the same, that PCBs are a commodity and that it doesn’t really matter where you get them…you are going to get what you deserve.
If you think that PCB fabricators make way too much money and they should let you show them how to really price their boards…you’ll get what you deserve.
If you think that a 28-layer blind and buried via board is a commodity…keep thinking that and yes, you’ll get what you deserve.
If you think that all that matters is price and that your purpose in life is to find the cheapest, lowest-priced PCBs you can get your hands on…you are going to get what you deserve. And I challenge you to go out in front of your customers and let them know how proud you are that your product is made up of the cheapest, lowest priced PCBs you could get your hands on…you will get what you deserve and if those customers buy from you, they will get what they deserve.
If you think that you can buy cheap boards from people who break the rules, people who have no social conscience, companies who bear no ecological responsibilities, or from countries who have no interest in human rights, then you are going to get what you deserve—and good luck looking your kids in the eye when they ask you what you did to help save the world.
But if on the other hand you take great pride in your relationships with your board vendors, if you take their advice when it comes to helping you to design your PCBs, or you ask them for help in providing you with the best possible PCBs to make your end products that much better, if you rely on your PCB vendors to help you with your impedance measurements, your CTE management materials, your thermal controls and all of the other parameters that go into making you products that best they can be, if you make sure that your vendors are following all of the rules when it comes to meeting their specs and qualifications, in meeting ITAR requirements, in meeting EPA requirements, in treating their people fairly and with respect….you will get what you deserve and that will be a good thing…a very good thing. Support your PCB fabricators, look out for them, listen to them, and yes respect them. Look at them as your PCB experts…because after all they are.
Its only common sense.
Being the best will get you the best prices. You have to be better than everyone else.
You have to be better than everyone else to win the business; not only win it, but keep it. If you are good, very good, you can be good enough to get past the price issue. If your products and your services are better than everyone else’s you can get by the price issue. If your treatment of your customers is so special that they feel they cannot live without you, you can get by the price issue.
Now, I’m not claiming that it is going to be easy nor am I saying that it will happen every time but what I can tell you is that if you are the best in class you will more often than not get your price.
“But, how,” you ask, “can you be better than everyone else? What will that take and in the end is it worth it?” Good questions. I can start off by saying yes, it is worth it. Let me ask you in return, is it worth it keeping customers for life? Is it worth it making a profit? Is it worth it running the best performing company in the industry? Because you see, to be so good that your customers will pay you a better price than they pay anyone else is also being so good that you are performing at the top of your game. You are delivering all of your products on time and you are as close to zero defects as possible.
The road to great customer service is also the road to being a great company, they go hand in hand. And, if you can do everything better than everyone else then you will become a great company.
To be a great company you have to be valuable to your customers. You have to be so valuable that when their nasty bean counter, you know the guy with the green visor and sleeve garters complains that their company is spending five or even ten percent more on your products and services than they pay for your competitors; the people in the company using your boards will yell at him to, “shut up!” Your fans and yes they will be fans will be so in love with your products that they will point out all of the benefits they get from using your products, benefits so far superior to the products they get from you competitors that they refuse, yes they refuse to live without your products and services.
Look, in the real world this is not going to happen in every case. There are still the cheap so and so’s out there who only care about price. You know who they are the ones who know the price of everything and the value of nothing; the ones who claim they are building the best products in the world…by building them with the very cheapest parts that money can buy. You are never going to change those people so why try.
But those customers, the ones who understand Quality; the ones who understand what a good product is; the ones who appreciate great service and most importantly the ones who appreciate all of the little extras you do for them. The help with engineering, the flexible delivery dates, the manufacturability advise, the ship to stock and just in time services you provide, the special way you package the boards the immaculate always perfect documentation you include with the products, the constant availability of your management team, the way you drop everything to help them solve their problems (even if those problems come from your competitors cheap products), the way you look out for them and act s their personal experts and consultants when it comes to your industry, the way you are always looking out for them and yes, the way you put their interests first making sure that they have everything from you that they need to be successful. Those customers are the ones you invest in. They are the ones you target, win, service, and then keep for life.
And you know what? These are the companies who will make you better. These companies, the customers who appreciate and value what you do to the point where they are willing to pay your for what you do well. These are the companies who succeed in business because they treat their suppliers like thy want to be treated and most importantly they are making the truly best products in their market today because they are building them from the best parts money can buy from the best vendors they can find. And that’s because they are buying from you…the best supplier on the market today. It’s only common sense.
I 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