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56 DESIGN007 MAGAZINE I JULY 2020 Reassessing the Risk of Offshore PCB Manufacturing Offshore board production has long been considered an effective way to reduce the cost of producing electronic devices here at home, but those savings often demand a higher tolerance for delivery issues and come with lowered expectations for quality. In addition, the risks associated with global supply chain logistics have increased in the wake of COVID- 19, and the component costs of offshoring already were increasing due to rising wages abroad, persistent high overseas transporta- tion costs, and uncertainty surrounding global trade policies. These macro-factors are not unique to our industry. Their impacts can vary as market conditions evolve. Problems with quality assur- ance (QA) are a more persistent issue when it comes to PCBs, accelerating the reshoring trend. When quality issues occur, they are usually accompanied by an absence of trans- parency. Collaboration with offshore manu- facturers is inherently limited by time zones, distance, and, sometimes, language. These impersonal relationships foster a "take what you get" transactional paradigm that device manufacturers should not and cannot tolerate. Offshoring Production Can Onboard Problems Along with the highly visible risks, there are some less apparent complications that will tangle up a manufacturer. If you plan to off- shore PCB manufacturing, carefully examine the impact on your domestic operations in sev- eral key areas. Offshore manufacturing does not automati- cally equal savings and can disrupt cash flow. If you need the boards fast, expedited shipping might end up offsetting much of your poten- tial cost savings. Most Chinese manufacturers require full payment for prototypes or small- volume orders before they begin production. If offshore PCBs fail to meet design specifications and you've already paid for them, you have limited leverage with the supplier—meaning the resources required to re-tool the boards yourself or adapt the prod- uct to accommodate them further masks the real cost of low yield. Increased Risk Can Unleash Additional Costs Risk mitigation isn't free, and the resource burden required to manage it falls on your domestic produc- tion team. This creates additional hidden costs Connect the Dots by Bob Tise and Matt Stevenson, SUNSTONE CIRCUITS

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