(Author’s note: this interview was conducted by Barry Matties of iConnect007.com. Thanks to my good friends at iConnect007 for permission to publish it here)
Two well-known consultants in the PCB industry, Dan Beaulieu and Steve Williams, have joined forces to try to help close the divide between CMs and board shops. I recently sat down with them at IPC APEX EXPO 2016 to better learn about their strategy for bringing the two sides together.
Barry Matties: You guys are two of the best consultants in our industry, and you’re bringing together a concept of communication. Why don’t you just give an overview of what you guys are strategizing.
Beaulieu: Over the years, Steve and I have had a lot of fun talking about the animosity between CMs and board shops. Steve’s a consultant and he’s certainly an expert on the CM side of things, and I know something about boards, and they are polar opposites, if you will. We decided to get together and get these people talking. It’d be a better world for them and for the world if they could be much more productive.
We decided to form a partnership where we would offer to companies, let’s say a CM for example, support on how to buy boards, how to approach board shops, and what type of board shops to approach. On the other side of it, for the board shops, we’d help them with how to deal with a CM customer, OEM customer, or a designer. Just to open up the communications. We’ve seen a need for this and people are now asking for it. They’re saying, “How do we get better results from a board shop?” Well, talk to them. Get to know them as human beings. That’s what this partnership is about.
Matties: Steve, Dan mentioned that you have a lot of experience. What sort of experience do you have?
Steve Williams: I spent the first 23 years in board manufacturing. Then I went to work for one of my larger customers, Plexus, which is a $3 billion contract manufacturer.
My job was to manage the supply base globally for them. As Dan mentioned, one of the problems especially is that PC fab guys are used to dealing directly with the OEMs. They put their engineers in touch with the OEM’s engineers, and they’re used to the relationship. Now, they’ve got to work more and more through the CM which is kind of in the middle. They don’t understand how to navigate the CM’s demands versus the OEM’s demands. It’s an art. You’ve got to learn how to do that. That’s kind of what Dan and I have been talking about. So far, it’s been pretty well received by the companies that we’ve spread this concept around to.
Matties: How do you implement this?
Beaulieu: The implementation part is actually not that difficult. We’re putting the plan together and Steve is already talking to CMs, and we’ll do the same thing with board houses.
Matties: Talking to CMs is a program you already have, correct?
Beaulieu: Yes.
Williams: We rolled this out to a number of Dan’s clients who wanted to know how to sell more effectively to the contract manufacturing customer.
Beaulieu: The other reason we saw a need is because I’ve been approached by a couple of research labs. Quite frankly, one of them said, “Why do circuit board shops suck? Why can’t we get out of them what we need? They’re not keeping up with us.” I said, “Because you’re not talking to them.”
There’s a gray market that has occurred, which is the no-touch market. Nobody talks to anybody, and yet it’s one thing if you’re building garage door openers, but if you’re building guidance systems or products that have never been built before, you need to talk to somebody who’s going to build that product.
That’s where the concept came from. We saw a need from customers. What we’re doing now is completing the implementation, the actual package, and taking it out on the road. We’ll do columns on it and we’ll do interviews like this and get people informed.
We both have pretty strong databases. I’ve worked with more than 125 companies in the 20 years I’ve been in business as a consultant. Steve’s got a lot of friends also.
Williams: Not that many.
Beaulieu: You have a lot of friends from when you were buying boards. You were a pretty famous guy back then. Those are kind of the low-hanging fruit that we’re going to approach first.
Matties: That’s smart. There’s another branch of that too, Dan, right? Please talk about the need for people to understand how to set that up internally. How do they set up their own internal PCB buying center? They may not have the expertise internally, or they don’t have the resources, and they don’t know how to start that.
Beaulieu: That’s right. That’s what I set up for Steve because that’s exactly his thing. When he was buying boards globally for Plexus, he knew how to qualify, he knew how to survey, and he knew how to select. He knew how to get the most out of them, so we’re tapping in on that.
I come from the voice of the frustrated board shop guy asking why Steve was doing all these things. Take the guy who thought them up and bring them to the board shop and he tells them, “I was doing these things for this reason. Guess what? I can show you how to get through those things.”
Matties: One of the things we all know is price matters. Especially for OEMs beating up fabricators, if you will. I don’t know if “beating up” is the right term.
Beaulieu: It is the right term.
Matties: Does this program and education help the OEM learn that you have to leave some meat on the bone to have a healthy supply line? Because if they’re eroding the supply chain, they’re eroding the service that they receive and the quality of the product.How does your program address that, or does it?
Beaulieu: Well, from a board point of view, this is what has happened over the years. There’s been a complete devaluation of the board. I mean we laugh about it. We call it a card. You’ve heard me say a thousand times, “A 28-layer blind and buried via board is not a card. It’s not a commodity.”
It’s easy if you’re blindsiding yourself to believe that. If you’re negotiating, it’s convenient to believe that and don’t understand it, so you can denigrate it, and make it a cheap product. It’s different when they get an understanding. When we bring people into board shops and they realize there are 108 steps to this, or 124 steps to this, they start appreciating. Especially when you will be doing all levels, like price sensitive, smaller CMs, but also those labs where the price is not as important as the quality and the technology. Like if a shop can keep up with the stuff of tomorrow even if they don’t know how to build it yet.
Williams: One of the biggest disservices that not only OEMs, but contract manufacturers have done to the industry is to label that term “commodity.” They’ve all got commodity managers and that sets the impression that it’s like an off-the-shelf electronic component with no customization…Right. These are custom engineered products that take a lot to build.
Matties: The other thing that I hear frequently from is that the circuit board designers design circuit boards, but many have no idea about the actual manufacturing process. How do we help tighten that part? Does this program address that at all?
Beaulieu: The designers are asking for it, particularly young designers. Without naming names, I ran three design centers that are gone now which were owned by Cadence. They had, I think, three or four design bureaus at one time. Those designers had never been in the board shop and they owned a board shop. There was a philosophy of don’t listen to the board guy. You’re the designer, build it the way you want, and tell this guy to build that card the way you want it built.
Now, when I talk about these labs, it’s the designers who are asking, “Can you come in here and can you help us with selection of laminates?” for example. You’d see laminates chosen that would have made a board very expensive and very tough to produce. The same CT management could have been handled at a much more affordable laminate. Things like that.
One of the targets is the designers and they’re the ones who’ve asked for it, quite frankly. The new wave of designers wants to know. They’re under 30 years old, and they want to know how a board is built.
Matties: Are we also seeing a shift in the way that boards are purchased? Steve, when you were at Plexus, you were in the office. You weren’t a circuit designer, you were the procurement vice president of purchasing. Are you seeing more of that purchasing power shift to the designer to where they’re actually becoming the purchasing agent as well?
Williams: In some cases you’re right. That’s where a lot of the frustration comes from, not only for board shops, but also for the guys upstream, and you’ve got the new designers that are responsible for it. They’re dropping block tolerances on things. They’re going by the book, and not really looking at the technology. The board shops are frustrated because they can’t build it to that. That’s where that friction comes. They want it build like they designed it, but it’s not feasible. They are taking more ownership to it, but there needs to be a lot of education on the fab process, quite frankly.
Beaulieu: Another thing related to this is with the onset of what some people call “no touch,” which I call the gray market. Okay, well, that’s fine when you’re new product development’s a garage door opener, or a Mr. Coffee card. But when it’s the products of tomorrow, and you’re seeing even the large OEMs do it because their sourcing process is so complicated. I picture the guys in the basement, the designers who have a $5,000 credit card, saying, “I’m not going upstairs to put this in the process. I’m going to hit that design, I’m going to hit that credit card, and I’m going to get this.”
Really, a certain segment of the market has no business doing that. They really should not be doing it that way. That’s another thing to educate.
Matties: When it’s a poster board, sure. When you’re building a car, absolutely not.
Williams: It’s got to be technology specific.
Beaulieu: Yeah, but when you’re doing products of tomorrow, you need to talk to somebody. You need to talk to somebody who’s going to build this thing.
Matties: Not even just products of tomorrow, but products where the cost of failure are so enormous, why risk it? I think we see that in automotive industry. Whatever test you can get they’ll buy, because the cost of failure is so enormous.
Beaulieu: What does it get down to? It gets down to everything you ever needed to know you learned in kindergarten. It gets down to respecting each other’s genre, if you will. That’s what we’re trying to teach. At the end of the day, talk to one another, learn it from one another, and respect one another. Together you’ll be putting out a much stronger product.
Matties: This sounds great, guys. If someone wants to get more information they can contact either one of you?
Williams: Either one of us.
Beaulieu: That’s right.
Matties: Thanks for joining me today.
Beaulieu: Thank you, Barry.
Williams: Thanks, Barry.
