Honest broker solves supply problems
26 March 2008
Here, Wendy Heyes discusses the problems facing companies face when sourcing offshore and suggests how they can insure against any time related delivery problems.
As competition increases and margins get tighter, an increasing number of UK companies are looking to source their PCBs offshore. While this ever-more popular approach can help organisations to realise significant short-term cost savings, such activity can also lead to serious problems, when delivery and sometimes product quality becomes an issue.
If you’re sourcing your PCBs from an offshore supplier, you’ll know what a minefield that can be. In an attempt to aid the process, a number of companies have been set up to offer offshore sourcing services, promising to remove the hassle for you and to get you the best prices possible. However, even if you have found a seemingly reliable company, can you really be 100% confident that they are up to date with the latest market developments?
In short, things don’t always go to plan when companies source their PCBs off-shore. Quite apart from language and possible culture differences, the sheer ‘distance-factor’ can lead to communication difficulties and in some cases, the cold light of day may see production procedures differ from what was initially anticipated or agreed.
When that kind of problem occurs, the bottom line is often that a given chain of events can lead to the customer not having the boards it needs to fulfil various important orders for any number of clients. It is therefore important for any organisation to consider how it can best guard against such eventuality by putting an effective insurance mechanism in place that will robustly ensure that it can continue dealing effectively with off-shore suppliers to give the best possible service to its customers.
One way of insuring against any such problem is by teaming up with a PCB supplier that can guarantee the delivery of a minimum number of boards to the timescales agreed at the time of order.
Where a PCB supplier has an in-house tooling team with the capability to undertake design for manufacturability tests, customers know that their PCBs will be right first time. Then, when the supplier has the capacity to produce short to medium sized product runs, customers can be assured that if any delays are experienced in the delivery of the high quantities of boards produced off-shore, there is a back-up that can stave off any immediate supply problems while the delivery issue is tackled.
It is important for a company to align itself with a supplier which has a purchasing team capable of taking the pressure off by using its additional purchasing power to get the best prices possible. Small or medium sized companies will not be able to go off-shore and purchase with anything like the same influence as an experienced supplier with a network of contacts at various off-shore PCB manufacturers.
In using such a broker, both better prices and an enhanced service can usually be ensured, with the product quality also being high because the broker will have done the hard work in establishing acceptable quality levels in the first instance. Wherever possible, the products should be tested to the same standards as they would be if they were being produced by the UK supplier.
Flexibility and Expertise
In the event of any modest changes being made to a PCB design, it can be highly time consuming and similarly expensive to ship parts back to offshore suppliers. Therefore, there are clear advantages in dealing with a UK supplier who can carry out small design changes as required to save on such escalating costs which if allowed to spiral, can become crippling.
It goes without saying that continuity of supply is crucial. In dealing with a capable UK broker who can hold a quantity of buffer stock, demand can always be fulfilled should there be any problems with delivery from the Far East. However, as part of the service, that broker should always be proactively taking steps to ensure that the offshore supply never fails so that the buffer stock is only ever there as a contingency and not as a crucial element of the supply chain. For example, technical in-house expertise can ensure that in the event of an emergency, a batch of PCBs can be manufactured in-house with a quick turn-around ensuring that the customer is never let down.
Benefits
While the advantages of dealing through a domestic broker are numerous, the main benefit is that the hassle of dealing with offshore suppliers is removed. A good broker will have gone through an exhaustive vetting process to ensure that only reliable offshore suppliers are used. In addition, professional pride and an awareness that if the job isn’t done properly, the end customer will, look elsewhere, should mean that a broker will always act as though it is producing the boards in-house, offering a truly holistic service where effective on-going communication and reliability are key.
It has to be remembered that situations can change and where supply chains are concerned, perhaps nowhere more than in the Far East. It is therefore important for any broker to maintain an on-going accreditation programme for all off-shore suppliers, making sure that they comply with all international and indeed in-house standards. There has to be a comprehensive awareness off alternative off-shore suppliers to the usual companies in Taiwan, Hong King and Korea who can become tied up with servicing their own domestic clients.
The peace of mind that comes with using an effective broker is hugely important. Experience, knowledge and the ability to exercise rigorous control over quality is an essential element of offshore supply management. Manufacturers should always look to team up with a broker who can not only find the best deals on price but who will also ensure that the suppliers are subjected to stringent accreditation and quality assurance inspections, with that including their environmental policies which are coming under more scrutiny all the time.
From offering prototypes which ensure smooth transition to volume supply, to boasting an intimate knowledge of a customer’s needs, a good broker will also offer excellent levels of local technical support. The ability to tool-up at home and check for the capacity to manufacture is vital and on top of the usual promise of better pricing, better credit arrangements and tailored trading agreements to suit the requirements of the individual customer, the ability to batch test any end product to ensure compliance with the various industry standards is also important. Then comes that all-important capacity to hold contingency stock and offer re-working or replacement capability without seeing the customer incur long delays.
It is essential that in providing an offshore brokering service, customer peace of mind is guaranteed. While that element of risk can never be fully taken away, many domestic customers prefer to deal with known UK suppliers who can stay in touch and visit their offshore suppliers regularly. Ultimately, many are happy to benefit from the extensive knowledge of a capable UK supplier and can even find satisfaction in the knowledge that their contact is with a UK manufacturer rather than an offshore supplier they may find it difficult to communicate with. While that remains the case, there will always be a need for professional and well-established offshore brokers.
Wendy Heyes is sales director of CC Electronics Supplyline, an offshore PCB outsourcing specialist.
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