Early involvement and technical expertise make all the difference when it comes to PCB purchasing. As NCAB’s Hans Stahl explained, there’s more to buying a PCB than first meets the eye.
Purchasing managers working at UK-based OEMs and CEMs, particularly those providing prototypes, special projects and quick turnaround production, face a dilemma regarding PCB sourcing. As PCB manufacturing has migrated offshore, production capacity is coalescing around ever larger Chinese factories which are using their economies of scale to improve their efficiency. On the upside, customers can access better pricing. On the downside, finding the right suppliers, negotiating the best contracts and overseeing production and delivery is no easy task.
One solution is to join forces with a local PCB specialist offering detailed technical knowledge and a portfolio of manufacturing partners capable of matching an OEM’s or CEM’s product mix, regardless of complexity or volume.
Hans explained: “Our customers often require high mix, low volume production. NCAB’s skill is to match and carefully choose the right factory for the project from the portfolio of NCAB approved factories and then act as a facilitator to balance the workflow. We support customers from the design phase through to logistics.
“For example, a CEM might need access to five or six different PCB factories to secure the best offer. If a CEM is supporting 50 different customers, each with varying needs, NCAB will build a package using a portfolio of factories, each benefiting from its purchasing volume.”
NCAB describes this concept as an ‘integrated PCB production’ service which reaches beyond simply buying and selling. This is particularly important for the medium size customers who can find it difficult to negotiate sensible deals when talking direct to larger factories.
Hans added: “For medium sizes manufactures the problems aren’t limited to striking the right deal. If things go wrong they may have difficulty getting their voice heard. Typically a customer would want to know what happened, what corrective action has been taken and when their boards will be shipped: all within a couple of hours. A local partner with purchasing power can ensure the factory pays attention and understands the importance of these needs.”
In addition to negotiation and production support, NCAB prides itself on adding value at a project’s prototyping phase.
Hans said: “If we partner with a customer from the prototyping stage, we can debug the board using our specialist knowledge of volume production.”
This expertise regarding transitioning from low to high volume can be particularly useful for today’s small start-up companies exploring new technologies or ideas.
Hans explained: “Many great ideas start from small operations. Some of our customers are design houses or OEM companies with up to ten people. Naturally NCAB is interested in high volume projects, but it is essential to support start-up companies developing technologies that may take years to reach the market, it’s a fundamental part of our business. We have a long record of working with entrepreneurs, it’s why we ensure we have technicians at all our companies, so that they can discuss designs at all stages.”
NCAB describes its plans for the future as ‘local growth’. Hans said: “We think that it’s important we grow locally. That’s why we have 13 different companies, so we can get close to customers and take care of the smaller projects.
“We are putting resources into employing more technicians to guide customers during the design stage because that’s when the price of the circuit board is decided and that’s sometimes where things can go wrong. By changing the design, it may be possible to lower the price by 20 per cent. That’s why we encourage early involvement.”
Fundamental to some customers’ problems is that they don’t afford PCBs the respect they deserve on the bill-of-materials.
Hans explained: “A lot of companies treat a PCB as a component and that’s a big mistake. Sourcing components is essentially a logistics issue. The same cannot be said for PCBs because each board is bespoke and warrants the involvement of an experienced purchasing professional.”
NCAB also aims to add value through its logistics management. Selecting the optimum batch size, for example, can leverage savings and ensure efficient supply.
Hans said: “Batch size is an interesting topic because of its effect on price. The more a customer orders per batch, the lower the price per piece. Specialist CEMs, in particular, have to weigh up the situation carefully. If they order small batches, the price is a little higher. However, although larger orders reduces the PCB price they then have to pay for storage. The situation is even more complex because sometimes it may be possible to significantly reduce the price by ordering a little bit more because the volume then suits a different, more efficient, factory. It’s a decision making process that requires detailed discussion.”
For customers who do decide to order larger volumes and store product for call-off, NCAB operates a UK warehouse. Where possible, customers should plan well ahead to calculate the optimum batch size, taking into account the product’s lifecycle. This typically requires decisions involving senior buyers.
Hans added: “The best purchasing decisions are based on early discussions between the customer, NCAB and the factories. Everybody is happiest when the OEM, CEM and NCAB have a three-way meeting and everyone is transparent in the information they provide. That’s when it works perfectly. Sometimes four parties included, for example when a design agency is involved. Everyone profits from coming together to talk it over.”
Purchasing brain power
For discussions to be meaningful, NCAB stresses the importance of technical accuracy during the specification and purchasing processes.
Hans concluded: “It’s important to make sure a PCB’s specifications are accurate and understood when comparing costs. If you want to compare PCB prices you need to ensure you are comparing ‘apples with apples’. This requires purchasing professionals who understand the technicalities of bespoke PCBs.
“The best managers are the ones who understand the technical issues. This is a good example of the benefits of a partnership between the purchasing and the design department. There can be arguments between the technical and purchasing departments but when they talk to each other and work together they always find a better, more cost effective solution.”