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8 PCB007 MAGAZINE I JULY 2022 Nolan's Notes by Nolan Johnson, I-CONNECT007 The Shifting Supply Chain: An Argument for Investment e gears of the economy worked like clockwork for quite a long time, at least in North America, Europe, and Asia. Overall, that smooth operation is no longer the case, for several reasons. It's as if the watchmaker has upended the clockworks onto the workta- ble and is rearranging the mechanism to work differently—to tell a different time, if you will. In the overall economy, there are bearish signs (9.1% inflation year-over-year in the U.S. in mid-July). But in electronics manu- facturing, the market looks quite bullish on the demand side. is month's cover reflects that dynamic—a bullish industry within what seems to be an emerging bearish econ- omy. Recently, I had the opportunity to tour seven San Jose-area EMS providers. At each facility, I would ask, "How's busi- ness?" e answer was always the same: "Very good, when we can get components." e supply chain, I was frequently told, is a continu- ing stressor. Materials can be dif- ficult to procure for PCB fab as well. Talking to fabrica- tors, the general answer to my question was, "Sales are good, our order backlog just keeps extending. It's staffing that's throttling us." In a separate conversation recently, a fabrica- tion industry insider said, "We hire someone, train them, and they jump ship for the grocery store down the street because they're paying $2/hour more than we can afford. It's hard to keep our people." More than once as we put this issue together, one source would refer to the book, e Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America by David Gelles, and draw parallels between Welch's approach and what happened in PCB fab: By reducing (elim- inating?) R&D, and throttling the investment in new processes, the U.S. lost its c o m p e t i t i v e edge and over- optimized the supply chain. Twenty years ago, Welch's approach was embraced; in today's mar- ket, it would seem, not so much. While I'm just begin- ning to investigate the ideas in Gelles' book for myself, there are people in the U.S. indus- try now considering how to undo Welch's legacy.

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