By Nolan Johnson, EDA/CAD Product Manager, Sunstone Circuits, Mulino, OR
The U.S. PC board industry has been working its way through a well-documented softening in the market during the past few months, and the data is concerning. Since 2001, the number of PCB fabrication companies has declined steadily as approximately 30 U.S. fabricators close each year. This trend is not just a consolidation of the industry.
Growth in total PCB fabrication sales year-on-year in the U.S. is marginal. The industry's current dynamic is not of healthy U.S. companies absorbing the lesser performers (consolidation), but of business moving overseas, making the U.S. manufacturing pie smaller overall.
It isn't all doom-and-gloom. PCB companies that stick to some basic precepts for good business will not only survive, but thrive. Successfully navigating a contraction cycle is much like other things in life: understanding what you're up against enables you to take appropriate action to drive your business. It's the not knowing that makes it most difficult to compete effectively and allows your business to drive you.
Key to Survival
In the U.S. PCB market, the key to survival is developing a business strategy built upon core competencies (sweet spots), and then executing with discipline. Adhering to four key principles along this vein, Sunstone Circuits has successfully weathered market change and experienced steady growth.
Find Your Niche. PCB manufacturing is in a period of specialization. The current competitive demands on PCB manufacturing require companies to determine what they can do both efficiently and profitably. Once a niche is established, build a business strategy to chase that business.
Sunstone, for example, uses a competitive advantage in prototype manufacturing and PCB design processes to deliver the most reliable environment for prototypers. Investing in processes, tools and systems to reinforce its niche positioning, the company has established a reputation for being the easiest PCB firm to work with.
Execute the Strategy. Executive leadership must ensure that the strategy is communicated to all levels of the organization for optimal execution. In some cases, a transformation of culture might be necessary and tough decisions must be made to improve the business.
At Sunstone, developing a strong core competency in high-mix, low-volume production now serves prototype fabrication extremely well. In addition to setting up the factory specifically for this mix, Sunstone's management plays to the company's strength with extreme 24/7/365 customer service tailored to the needs of prototyping engineers.
Build Processes. Develop or refine the processes that strengthen your company's "sweet spots." Consider operational investments in equipment and talent to strengthen company differentiators. Don't overlook systems requirement (IT/IS), engineering, documents and certifications requirements, and staffing. These activities often occur behind the scenes, but they are as important as plotters, drills and plate lines. Continued attention to systems takes discipline, but is vital to success.
Redefining Design Process
Sunstone redefined the design process with a strategy named the Sunstone ECOsystemSM
Design Environment, a designer's one-stop resource for the expertise and capabilities needed to design PCBs. Design engineers require unique and specialized help when developing their pre-production designs, and the Sunstone ECOsystem provides immediate feedback backed by extreme 24/7/365 customer support.
Likewise, Sunstone introduced design tools (PCB123) and Design-For-Manufacturing (DFM) utilities for third-party design tools (DFM add-ons for EAGLE and Altium) that flag manufacturability issues interactively during the design process. With these tools, distributed without any associated licensing or support costs, key pain points during the design phase are addressed, making it easier for customers to get a successful prototype in fewer design spins. Collaborate.
The real secret to success in a shrinking market: collaborate with other manufacturers with complementary products or services. It's tempting to say "yes" to a customer requesting something on the fringe of your core competencies, but why tie up resources on work that runs counter to your standard mode of operation? "Co-opetition" is a word bantered in NASCAR circles, which refers to competitors who collaborate to improve performance and mutual success. Refer business that isn't a core competency. Trust that your co-opetition partners will refer business to you.
Sunstone works in "co-opetition" with other firms to solve customer design, manufacture and assembly issues seamlessly and effectively. By working to continuously improve the flow of data along the manufacturing supply chain, Sunstone's ECOsystem creates a feedback loop between the designer and the manufacturing specialists. Screaming Circuits is a Canby, Oregon-based quick-turn assembly firm and an active partner in the Sunstone ECOsystem. Sunstone and Screaming Circuits have been improving the data flow for Sunstone orders being assembled by Screaming Circuits. For example, PCB123-based orders using Screaming Circuits for assembly services will be submitted electronically to both firms at the time of order. This simultaneous notification along the manufacturing chain provides Screaming Circuits with additional time to prepare for the job, even while it is under fabrication. In the event of a parts or assembly issue, Screaming Circuits is better equipped to find a resolution before it stalls the manufacturing process. The customer benefits from a dramatically shortened turn time, from order to delivery, of a fully assembled prototype design.
Sunstone also builds relationships with parts manufacturers and distributors, as components are often cited as culprits in manufacturability issues. Increasingly, designers are working from the Bill of Materials (BOM) as a planning tool, not just a parts list generated from a finished design. This change in methodology is driven by such factors as RoHS-compliance and other parts-related issues, and is an extension of the DFM mindset. Sunstone's PCB123 version 3.1 includes functionality that gives interactive designers parts availability and pricing information from the design's BOM page. Designers can enter the manufacturer's part number (or the part number from a well-known parts distributor) and receive up-to-the-minute pricing information. Follow-on releases may include additional information about parts, enabling designers to make design decisions that include RoHS compliance, back-order status, or End-Of-Life notices.
Leverage your strengths by forming strategic alliances with those who can complement the areas outside your core competencies and open new business channels.
Contact: Sunstone Circuits, 13626 S. Freeman Rd., Mulino, OR 97042
800-228-8198 or 503-829-9108 fax: 503-829-5482 Web: http://www.sunstone.com