PCB Fab in a Recession: Lean, Web-based Ops

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By Pratish Patel, Electronic Interconnect (EI)

PCB fabrication is a tough business: it's highly competitive and price-driven; margins are generally slim, and competition from offshore PCB fabricators in Asia and regions where environmental regulations are not as tight (lowering manufacturing costs) has decimated the circuit board fab industry in the U.S. These challenges all exist along with this global recession. One U.S.-based supplier in the Chicago area, Electronic Interconnect Technology (EI), has a lean methodology to thrive and grow even in tough times. This article covers the fabricator's approach to business, the marketplace, and the application of lean manufacturing principles.

The classic definition of lean manufacturing is an overall methodology that focuses on minimizing the resources required for production by eliminating waste (non-value added activities) that inflate costs, lead times, and inventory requirements. It emphasizing the use of preventive maintenance, quality improvement programs, pull systems, and flexible work forces and production facilities. Anything that does not add value to the final product or service is eliminated. Lean manufacturing is usually implemented along with the concept of kaizen, or continuous improvement.

The fabricators developed a range of customer services that must accompany almost any custom job, particularly design and engineering help and a close-working approach that would not be possible or practical when dealing with an offshore volume board fabricator. Of course, the usual methodologies involved in competitive business aggressive pricing, etc. are used, but the U.S.-based company focuses on providing a higher level of engineering assistance to the board customer. This helps eliminate potential problems upfront, before the manufacturing stage. This prevents waste, lost time, and added costs, in line with lean principles.

Partnering with an Asian supplier of PCBs can provide cost-competitive PCBs to a board fab's high-volume customers. This allows the company to remain a player in bidding for high-volume jobs, but it is not without risk. The competitiveness of high-volume customers' products are often cost-driven and they need PCBs that are volume-priced. However, the level of quality assurance, service, design, and engineering help must remain as high as for low-volume projects. To do that, the partner in Asia must consistently provide product that meet the U.S. company's quality standards, the same as if they had manufactured those products themselves. Finding the right partner in Asia can take time.Instead of simply offering competitive-priced services and products, how about working together to help the customer reduce the cost of products, more so than perhaps they had anticipated? Work toward the same goal from both ends? This involves greater communication and transparency between customer and supplier. Yields can be improved; wasted material, mistakes, and downtime cut out, costs reduced; and better communication developed, along with a closer working relationship. This requires modern, Web-based customer interaction.

EI began putting a lot of effort into its Website. How could it become an enhanced mode of communication between the fab and customers? Fabricators should move away from the traditional paper methods of communicating board design, for example, and exchanging information, one that traditionally leads to design errors and problems. Faster communication also gives engineers early opportunity to work with the customer's design in suggesting ways to improve the design for manufacturability, streamline the process, and avoid errors ahead of time. Many hassles, reworking, and time wastes can be eliminated. This even allows board manufacturers to suggest ways to reduce cost in terms of processing or manufacturing suggestions and more efficient ways of doing things that the customer may not have been aware of, and still reach their goal of a robust product that performs to expectations. Web-based communications, removing the reliance on paper, have the added benefit of saving time through the immediate availability and access for engineering review. Since information does not have to be verified as often, they move forward faster and streamline the process.

cap_323754.jpgAll fab operations must overcome manufacturing challenges without disrupting customer schedules or budgets.

Board fabrication typically has a number of inherent problems associated with it, especially for a new product, and it can be frustrating for the customer. Going from concept through design to prototype and then to volumes of finished boards is a very complex process. These problems are endemic to all fab operations. For example, there are design issues associated with the manufacturing process design for manufacturing (DfM) issues that have to be worked out in the beginning. You want to avoid soldering defects and ECOs associated with the finished product. Skilled design engineers can work these issues out so that potential problems are identified and solved in the early stages. Because it is such an involved process, accurately tracking and tracing the evolution of the product at every step is vital. That information must be provided to the customer on a real-time basis. This is essential when developing a computerized system of tracking and reporting.

When developing a design, quoting, tracking, and other steps in the chain can be used to streamline the entire process, making everything easier for the customer. A simplified online quote system is one example of an efficiency that helps customers get answers and size up a project quickly. EI also decided to offer a full range of PCB layout services, adhering to established standards for acceptance and delivery that result in a rapid design cycle.

By putting as much of the process online as possible, fabricators make access to services and information easier for the customer. Quotes, ordering, and tracking can all become Internet-based. Online, the customer can track their orders, even phone orders, in real time. They can keep track of online quotes and access all of their information 24/7. They can get instant quotes, place an order, or place a bid (order with their target price), for example. Other information can be shared between fab and customer online, such as PCB guidelines.

For online operations to be successful, the fabricator must get things right from the beginning in terms of organizing and interpreting data. For every success, there is a pillar supporting it in terms of a comprehensive procedure. For example, in the initial evaluation of a job, when a customer sends in a file, EI will analyze that file with 57 parameters from its custom quote program. The analysis generated directly impacts delivery and product quality to that customer. Detailed instructions are generated for the manufacturing process, from acceptability through shipping instructions.

With online customer relationship management, the board customer can track their order online and share information with the fabricator. With shared plans, collaboration to find the most economical solutions is easier, pre-manufacturing. Greater efficiencies result in dollars saved, and this becomes money saved by the customer.

The Web-based approach eliminates the confusion of lost past orders, etc., for re-ordering. Administrative efficiency is a major advantage in promoting a streamlined, lean manufacturing approach. Customer order history is available immediately for review by both supplier and customer, and pricing history and engineering changes over time. This makes the process much simpler, increases competitiveness while reducing losses, and keeps customers on board while attracting new ones even during slack business times. When your internal scrap rate is low, then your customer return rate is high. With these lean practices, internal yields are high, and customer return rates are low, something at odds with the traditional way that the board fab industry is run.

Innovative practices to help customers reduce their own costs, working together, and use of the Web to facilitate ordering and information transfer help to implement lean manufacturing practices and improve efficiency. This, in turn, promotes a better bottom line and business sustainability in a tight market during recession times. Rejection is minimal, and yield is the name of the game. This dynamic results in an economic solution whereby the higher yields translate into savings and better pricing for the customer.

Pratish Patel, president and CEO, Electronic Interconnect (EI).

For more on U.S.-based electronics manufacturing after board fab, read Low-volume/High-mix: EMS Jobs in North America



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