Issue link: https://iconnect007.uberflip.com/i/1288481
SEPTEMBER 2020 I PCB007 MAGAZINE 57 you working in a new kind of market segment that's attractive to this supplier? Are you work- ing with flexible circuits or molded circuits, 3D circuits? This could provide an opportunity for your supplier to develop more expertise that they can then use as a way of attracting addi- tional customers. You may have something to offer in that category. You shouldn't look at your supplier as just a way of providing the lowest cost option. Smart companies treat their suppliers as an exten- sion of their own internal manufacturing. Yes, they're a different company, and they have oth- er customers, but you should really treat them as an extension of your own internal produc- tion. Your suppliers can enable you to achieve higher levels of performance because of the ca- pabilities that they have. Maybe you talk to a supplier about a basic FR-4 multilayer rigid board, but then you dis- cover that your supplier has other capabilities, like flex circuits or molded circuits—more three- dimensional designs. Now, suddenly, because your supplier has this capability that you didn't really think of before, your engineering team can create a completely different kind of prod- uct because of the capability of the supplier. Johnson: Or, in the case of a PCB fabricator, spending much more time understanding the other materials available from their suppliers. Rodgers: Does it have to be an FR-4? You might be able to achieve higher levels of electrical or thermal performance by using a different kind of material altogether that you didn't re- ally think about before, but your supplier has experience fabricating boards with those ma- terials, which opens up other possibilities for your design team. Johnson: What do you see as some of the chal- lenges we'll face in the next year or two? Rodgers: The tariffs and the pandemic together have caused people to think a lot about the assurance of supply. A lot of companies have been driving their inventories down to very low levels. Lean manufacturing has been ex- tremely popular for a long time, and people get it. It means keeping low inventories and reduc- ing the number of suppliers. Instead of spread- ing our purchasing out across a wide supply base, we use fewer suppliers and concentrate our purchasing power, thereby allowing us to get better pricing. All of that makes sense, but now we're get- ting hammered over assurance of supply be- cause suddenly our suppliers are located in parts of the world that have political risk— in the case of tariffs, or our inventories have reached such low levels that we can't quickly respond to changes in the supply chain. I just saw an article that said laptop sales had gone unexpectedly through the roof as a result of the pandemic. Companies that thought they were running a pretty mature business—lap- tops have been around for a long time—sud- denly had to figure out how to scale up their supply chain. They didn't have the inventories in components, sub-assemblies, or boards to support the increase in demand. Now we see two competing trends—one to- ward lean and lower inventories to reduce cost, and the other toward creating a more resilient, adaptable supply chain that can react quickly to changes in demand. That costs more mon- ey, and it's a higher cost supply chain. That might mean having more suppliers or suppli- ers in different parts of the world. Remember the big tsunami that hit Japan back in 2011? It wiped out a lot of electronics manufactur- ers and caused companies to wonder wheth- er they should be concentrating their supply chain in just one part of the world. Diversi- fying adds cost to your supply chain, so how much is that worth? The tariffs and the pandemic together have caused people to think a lot about the assurance of supply.