After spending the last five years, in what for me was an unknown line of business, I see that confusion is holding us back and costing us money. There is a lot of efforts going on, primarily in IPC, to avoid this confusion, but none addresses the issue that I’m going to talk about now.
Products that are not products
As a major broker, Elmatica receive thousands of requests each year for pricing and orders on PCBs. The PCB already has a product name, and number at that stage. Either from a Product owner/Brand, an EMS or both.
The problems starts here: The requested product at quotation is not a product – it is a Draft. Even though it contains most of what is needed to become a product, it does not contain crucial information products need. This information only comes after the Manufacturer is selected, and the Tooling Process at that manufacturer is undertaken. At that stage, the remaining specifications are set, such as:
- Country of Origin/Manufacturer name
- Stack up/build up
- Certificate/Declaration of Conformity
This is the product that is then ordered and delivered. Any change in Manufacturer will create a new product.
Let me point out some of the actual problems that this lack of having a Draft/Product approach, creates:
Example one: Prototypes
The EMS or Product owner sends out an RFQ for what they consider a Product, but is actually a Draft. They receive offers on various volumes, from quick turn prototypes to large volumes. Prototypes and Volume boards will most of the times be manufactured at different Manufacturers, and have different specification. As this is treated as one product, orders does not separate what product is ordered, and crucial information is not exchanged between the parties in the supply chain.
Pricing is not separated, resulting in higher cost per board in the volume order. Statistics on quality will be wrong, Lead time a challenge. Lifecycle information is mixed. In most cases, the prototype also has different, and less strict requirements.
Example two: Unnecessary quotations
Most of the RFQs Elmatica receive, contains several volumes, e.g. 10, 100, 1000, 10000. The purpose of this is to reveal several aspects while moving within the boundaries of an ERP-system:
- What is the price and lead time of the prototype?
- Where are the price breaks in a volume order?
- What is the lead time of a volume order?
As the product in reality is two products, this method of requesting information will generate problems all the way throughout the product lifecycle. If the question had been regarding the actual projected volume and also stating the need for a prototype, the response could have been much more accurate and probably cheaper.
Example three: Trouble if changing suppliers
As the requesting party, either EMS or the product owner, holds one part number for their own reference in internal systems, any change in the manufacturing facility will not be kept in an appropriate manner. If changing a manufacturer generated a new product being generated and any BOM containing the old on updated, all future problems of ordering the correct product, comparing statistics, keeping relevant files etc would be avoided.
As a business – we should have a thoughtful and uniform approach to this. Today this is not the case. Elmatica suggest the following approach:
- Until ordered, all references to a PCB product should be treated as a non-deliverable draft product.
- When requesting prices on prototypes, this should be clearly stated and the result be treated as a separate product related to the draft.
- When tooled by suppliers, both manufacturers or brokers, the result should be treated as a new product related to the draft.
- Any change in suppliers should result in a new product being generated, related to the draft.
CTO at Elmatica