Issue link: https://iconnect007.uberflip.com/i/1288481
56 PCB007 MAGAZINE I SEPTEMBER 2020 If you want to have a transactional relation- ship with your supplier, where I pay you, and you provide the stuff that I order, you can do that. But don't be surprised if the suppliers don't knock themselves out on your behalf, or if they don't return your phone call right away because it's just a transactional relationship. I'm not advocating that you have to be close partners and buddy-buddy with all of your suppliers, but everybody has critical compo- nents in their systems where assurance of sup- ply, quality, and ongoing engineering coopera- tion are important. I encourage supply chain managers to identify what those critical com- ponents are, and then invest in more of a part- nership relationship instead of treating it as an arm's length transactional relationship. Johnson: That argument you just made screams PCB fabrication. Rodgers: Again, PCBs are custom components. You can't just buy them off the shelf. If you expect higher levels of performance from your supplier, then you need to spend a little bit of extra time on the relationship. You can't just have an arm's length transactional relation- ship. Otherwise, you just look like another customer, and why should your supplier knock themselves out? Johnson: I'm mindful of the PCB fabricators that have a largely e-commerce model. That seems to be pushing pretty strong on the trans- actional business model. Rodgers: Let's face it—it's getting a lot hard- er these days to visit these suppliers. It's just about impossible. Even before the pandemic, it was cost-prohibitive for a lot of folks, so it tends to be more of a virtual relationship, which makes it a lot harder to establish that sense of partnership. But what do you have to offer? Do you have high-volume purchases? If we're working together on this design and can reach an agreement, there are going to be thousands or hundreds of thousands of units that we're going to purchase from you. That's obviously very attractive to your supplier. Are bilities. Other times, it's identifying new sup- pliers not currently in their supply base, but always ensuring that when the time comes and these new designs come to market, suppliers can meet their needs. Johnson: The decision point for making sure that procurement and engineering are working together is senior management? Rodgers: That's where they come together. We want a clear message from senior manage- ment that these teams need to work together and that they will be measured on their collab- orative performance. Their performance mea- sures are not in conflict with each other. The procurement team is not there just to do the bidding and finding the cheapest suppliers to squeeze them on the price. Their job is to en- able the hardware team to achieve whatever level of price performance that they're looking for. That starts higher up in the organization. Johnson: I'm now imagining that as a PCB fab- ricator, I'm working more closely with an en- gineering team and helping them understand how to make their design the lowest cost and highest yield for them. As a fabricator, what's in it for me? Rodgers: That's a great question and it comes up a lot. Isn't it in my best interest to promote the higher cost solution, especially if it means higher profit for me? I would suggest that if you want future business from a customer, then having a team-based approach will create more value for your customer. That's more valuable to the hardware OEM and will win you more loyalty in the long run. Even if you're a small OEM, you still may have something of value to a supplier that would incentivize them to want to work with you as a team instead of just in a transactional relationship. Johnson: That is a fundamental shift. We need to move away from being strictly transactional. Rodgers: I agree. I've had this discussion with a lot of people in supply chain management.