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66 SMT Magazine • October 2014 Sure, there are producers around that offer multiple volumes and technologies from one source. However, one has to answer the ques- tion: Does this "Jack of all trades" situation al- ways offer me the most reliable and competitive solution? If you believe the answer to this ques- tion is no, your sourcing policy tends to require a multiple sourcing strategy. If you believe the answer to this question is yes, your sourcing policy tends to require a single sourcing strat- egy. Which sourcing strategy is the best and what are its strengths and weaknesses? sourcing Options For the most part, there are four different approaches to sourcing: 1. Sole sourcing: only one supplier in the supplier base (e.g., because of a patent) 2. Single sourcing: one single supplier is selected out of a choice of suppliers 3. Dual sourcing: two suppliers are selected 4. Multiple sourcing: multiple suppliers are selected single sourcing vs. multiple sourcing Let's take a look at the pros and cons of the two most popular and classical approaches, be- fore presenting a third, alternative approach. Single Sourcing Here, one single PCB manufacturer is cho- sen to provide the entire PCB portfolio. There is one contract and one line of con- tact, which significantly reduces the effort in the day-to-day management of the outsourcing activities. Since there is only one contact win- dow, continuous improvement programs can be run more efficiently. However, outsourcing to a single manufacturer does not diversify your risks, as you are putting many eggs in one bas- ket. Let us now compare two typical PCB manu- facturer types available for this souring strategy, each with its own specific peculiarities. 1. Medium-size PCB manufacturer Medium size PCB manufacturers (annual turnover of $150-250 million) are usually armed with equipment that caters best for their core competence technology. If they are requested— due to a single sourcing approach—to produce various technologies that do not perfectly fit their core competencies, compromises must be made. Hence, a situation has to be managed that presents itself as follows: • Boards for the "not-so-good-fitting" tech- nologies are produced on less than sub-optimal production lines and quality restrictions are more often than not the trade-off • Raw material costs may not be very com- petitive because the purchasing power for rel- atively small volumes of special materials re- mains limited • Little to no stock keeping for "out of the ordinary" laminates will extend lead times • Limited UL approvals for certain mate- rial combinations can send your project into a much unwanted waiting loop of around 3–5 months until approvals are granted 2. Large size PCB manufacturer Large PCB manufacturers (annual turnover of $0.8-2 billion or more) have sizable company overheads that will be reflected in the pricing. They lose flexibility and speed when demands for smaller lot sizes and fast lead times are to be covered. Because of their legal structure, deci- sion-making tends to be relatively slow and can be perceived as being complicated. Looking at only the two examples above, single sourcing has advantages but does come with a set of challenges to be considered be- fore a strategic decision is made to go down this path. Deciding on this relatively inflexible strategy can pose problems when working in a highly dynamic and fast changing demand en- vironment. Multiple Sourcing With multiple sourcing, you enter into sev- eral separate, parallel contracts with different suppliers to best cover the demand structure of your PCB portfolio. It is a rather flexible ap- proach, although, you must spend considerably more time and resources to manage a broad range of suppliers (e.g., contractually, techni- cally, quality-wise, claim-management wise). ArTiCLE smart Pcb sOurcing cOncePts continues