Large volume printed-circuit-board (PCB) creation is definitely an overseas venture, but prototyping and low volume PCB generation is still an area where domestic companies can compete. I recently spoke with Ron Houston, CEO of Advanced Circuits, about how his company has changed over time to stay ahead of the competition.
Advanced Circuits was around before the Internet boom, and much of the groundwork for its current success started before most firms were taking advantage of Internet-based purchasing and business-to-business interaction. There are a number of companies that handle PCB prototyping and production, but it is not always apparent where they are located. Remember, with physical products like PCBs, delivery is part of the solution and shipping from overseas is not a zero-cost option.
The following are some questions I posed to Ron.
Bill (ED): When did Advanced Circuits start addressing issues related to overseas competition?
Ron: (AC): Back in 1991. Overseas competition, especially in the Far East, was heating up. Competition was getting tighter in general. Outsourcing tends to be less of a competitive issue when times are good. As the downturn occurred, we knew that we had to offer more value at a lower price.
Bill (ED): What were some of the things you did to add value?
Ron: (AC): We checked with our customers to see what level of service they required and what prices they were willing to pay. We determined that offering a wide range of services from bare-bones PCBs through high-end PCBs allowed customers a one-stop shopping environment. They could choose the level of product that most suited their current need and upgrade as necessary. This increased the pool of customers that could make use of our PCB services. Diversification was vital to survival as we were no longer dependent upon one or two major customers.
We also investigated how small we could go in terms of quantity and still make a profit. Providing small-volume options lets designers work on more prototype iterations. Smaller volumes means lower price points, initially. The upside is that the customer turns to us for mid-range volumes as prototypes turn into production. Likewise, it lets us turn around product more quickly and then get it to the customer faster.
Bill (ED): So being a local provider, geographically speaking, provided benefits as well.
Ron: (AC): Yes, shipping to the U.S. from the Far East still takes longer than anything available within the U.S. Developers lose time and momentum if they have to wait too long for another board iteration. Overseas solutions add at least a day or more to the overall turn around time. This makes it more convenient for a customer to use a local provider.
Bill (ED): You mentioned smaller volumes before. Does small-volume work have other benefits to the customer?
Ron: (AC): Small volume work at low prices allows developers to keep costs below many corporate limits. This allows a customer to quickly place an order via credit card, often without getting formal corporate approval. Often the approval process can take longer than making the board and shipping it back.
Bill (ED): What other changes did you make?
Ron: (AC): Publishing our price matrix was key. Remember, this was back when prices were negotiated and order sizes were higher. With the Internet, we also perform cost calculations online so customers can see how options such as tooling, solder masks, and so on will affect the final price.
Using The Internet
Bill (ED): What changes have you added because of the Internet?
Ron: (AC): Online price estimates and ordering were just the start. We introduced FreeDFM in 2002. FreeDFM lets customers upload designs and have them verified automatically. This reduces support costs on our end because we get designs that have no errors, at least from a processing standpoint. It also makes designers' jobs easier because they do not have to wait and see if we have all the correct files. They find out almost immediately and can make changes if necessary. No more missing files to hold up an order.
Customers also get a price quote based on the actual design, not an estimate based on less specific information such as board area and hole count.
Bill (ED): How do you handle the range of PCB design software?
Ron: (AC): PCB design software
support is very important to us. We concentrated on the major vendors and provide support for those products. Likewise, there are PCB file standards and we support the most popular ones. Our online documentation describes what we can handle and how to generate these files for use with FreeDFM.
Bill (ED): Have there been enhancements to FreeDFM?
Ron: (AC): FreeDFM continues to be improved. It is not capable of creating board plots based on files uploaded to FreeDFM (see Fig. 1). Designers can view and print these plots and compare them with the ones in their design tools to double check that what they sent and what we use generates what they want. FreeDFM also detects problems and reports these to the designer in a graphical format as well (see Fig. 2).
Bill (ED): It sounds like you can turn around a design very quickly.
Ron: (AC): Yes, in a matter of hours in some cases. It is possible to get one day turn around for most of the U.S., especially if the design comes through FreeDFM the night before or that morning. Express delivery services can get you the board first thing in the morning.
Keep The Customer Happy
Bill (ED): Has the culture changed within Advanced Circuits?
Ron: (AC): Definitely. The organization is very flat. Everyone does what is needed to properly support a customer. We have customer actions people that handle post processing problems.
Bill (ED): Have there been any changes on the customer side?
Ron: (AC): Probably more than we can cover here. One interesting aspect of using the Internet is a designer can get a batch of boards done without interacting with anyone. They use FreeDFM to check out the design, order with a credit card, and get the boards back the next day depending upon the shipping option they choose. The process is fast, economical, and trouble free.
Of course, if they want or need personal support, we have that too. The website automation lets us concentrate on getting product out while supporting customers that want or need it, thereby keeping costs low for everyone.
Bill (ED): So the bottom line is to give the customer what they want faster and better than the competition?
Ron: (AC): Of course. Going overseas will not cut costs or improve turnaround time. We deliver high-quality products in a fashion that best suits a particular customer. We try to give the customer the best purchasing experience and support so they keep coming back. It is a plan that has worked through times of boom and bust.
Time To Wrap Up
Ron and I covered a number of topics during our discussion, including competition from in-house PCB creation tools like those available from LPKF. These solutions cost tens of thousands of dollars and are a prototyper's dream. Unfortunately, most designers cannot justify the cost. Companies like Advanced Circuits are less costly with only a small increase in turnaround time.
So what have your successes and nightmares with PCB outsourcing been? Drop me an e-mail note and we can trade stories. I am already on the fourth iteration on a design I am working on.