Issue link: https://iconnect007.uberflip.com/i/1265351
JULY 2020 I SMT007 MAGAZINE 25 verge of a hybridized supply chain. I had writ- ten down the word "matrixed." Until the '60s, the supply chains were very vertical. I grew up a kid for whom most of my relatives worked at the Tektronix headquarters. Tektronix did everything in the '60s on-site; they even machined their own screws for their oscillo- scope products. It was a very vertical supply chain. That has all changed into a very hori- zontal global supply chain, as you were say- ing. It seems like there are portions going verti- cal again, creating a matrix organization. Does that ring true to you? Kelly: Yes, but again, my lens is it will still be dominated by the horizontal supply chain. This doesn't change overnight; it took two decades to get to this point. There will be individual points where, for security and bottleneck rea- sons, they're going to say, "We're going to invest in this. We want to pull it closer to the final hub," etc. We'll call it a handful of stra- tegic moves dominated by a horizontal supply chain. Johnson: As I look forward, there's going to be a mix. We'll have the traditional job shop fab or EMS provider doing work for third-party cli- ents. But there seems to be a lot of room for some return to captive or a consortium of com- panies that timeshare a facility that they've built and maintained. Are you hearing any- thing like that in the market at this time? Kelly: I've seen nothing that I would say is a dominating trend at this point. I'm sure things are swirling. Picking up on expansion, one thing I do see, using EMS as our anchor, is if we look at the late 1990s and 2000s, we of the challenges moving forward in this envi- ronment is access to the financial resources needed to make some of these changes. These are not inexpensive changes. Johnson: Matt, following up on that, earlier on in our conversation, you mentioned that it takes about five years to get an EMS facility fully optimized, where you can put your feet up on your desk and let it run. Do you have any sense for how long a PCB fab shop would take to get to that point? Kelly: It would be about the same—three or four years. Johnson: Three or four years to get the wet chemistries and everything in place? Kelly: People are going to look at that and say, "No way. That's too long." But people who have done it say, "Thank you for saying that," because it goes quiet after a while. New prod- ucts and technologies are usually measured in that product launch cycle, so once the prod- uct goes out the door, everybody assumes it's great, and everything is figured out, but that's not usually the case. There's constant learning, and I'm not saying the quality or the reliabil- ity isn't good enough. It has all been qualified, but there are business and operational proce- dures and things that are constantly changing, so it takes a good couple spins and the follow- on generation of a product. And it's not just the technology. We always look at the product at the end of the day, but Happy, you were talking about the workforce. Is the workforce doing what it's supposed to do from an operator's standpoint, from an engineering standpoint? Do they know how to get to business quotes in the business office? There's a variety of things from the begin- ning to the final delivery of that product that is maturing. That's why I say it's somewhere between three and four years for a board shop, and four or six years for an EMS. Johnson: During the opening remarks in this conversation, you suggested we're on the Is the workforce doing what it's supposed to do from an operator's standpoint, from an engineering standpoint?