Do you know the total value of a good PCB? When you work with a good PCB fabricator, you need to have a good understanding of the total value of the product. Many companies look for the bottom-dollar price of PCBs and do not take the time to make sure they are getting the very best deal they can.
One thing that amazes me is how people who use PCBs always feel like they are paying too much. Why is that? As someone who has worked in PCBs for over 30 years, I can assure you that PCB fabricators do not make a ton of money. Most of them are able to get by with margins that are less than normal for other businesses, which is not surprising since it is one of the most competitive markets in the electronics industry.
That being said, I thought it would be beneficial to talk about the value of a PCB and what makes up the true costs.
- The unit price is not the total price of the board, by which I mean that cost of the board does not stop at the unit price. Unfortunately, many buyers are judged and incentivized by how much money that saves on the price of the board, but in reality, this is only one aspect of the total price; you have to look at everything that goes into the total cost to you the consumer of PCBs.
- What is the cost if the board is late? Here is an axiom for you. The lower the price of a PCB is, the lower everything else will be; it’s as simple as that. You have to look at the total costs of a PCB.
- How much does it cost you when a board is late? I was once a with a friend of mine who told me that he did not mind if the boards he bought were late all the time because the price was so good. Really? Wouldn’t it be much better to know you are able to count on a reliable vendor partner who takes commitments seriously? A partnership is not a good one if you can’t take your partner at their word. Then, think about this; the price of the PCBs you use in your $5-million piece of equipment is minor—just a fraction of the overall cost of your product—but because the boards are late, you miss shipments and revenue goals. That is the true price of a PCB.
- How much does it cost you when a board arrives at your company and is rejected? The board might even have been on time, but it is now late because it has been rejected, and the replacements will be late.
- How much does it cost you if a bad board causes a field failure? That is the worst, isn’t it? Not only is the board late or bad, but its failure exposes your own company and damages your good name and reputation. Was that really worth it to save a few bucks?
- How much does it cost you if a bad board causes a disastrous field failure? This is the worst scenario of all! When you buy a PCB from an unqualified source, you put not only your own company at risk but your customers at risk, as well. Once again, is it really worth it?
- How much does engineering consultation cost? What is the value of working with a technical board expert who can guide developing the best possible PCB design for manufacturability and efficiency? The answer is technical advice that will save you thousands—if not hundreds of thousands—of dollars in the long run. You will not get that consulting advice from the cheapest offshore supplier.
- How much does it cost you and the rest of the country if American companies buy so many boards offshore that it destroys the PCB infrastructure of the U.S.? Isn’t this what we see today when we depend on other countries—sometimes friends, but sometimes not—to deliver PCBs for critical and essential products like ventilators? Don’t we want some of that technology and infrastructure to stay in the U.S.?
This column is always about creating an honest, trusting, and lasting relationship with your PCB vendor partners. And if you want your partners to be reliable and loyal, then you have to be the same with them. You must show them the respect they deserve, and that starts with understanding, appreciating, and respecting the overall value they bring.
And yes, you must care enough about them as partners to make sure that they are being paid a fair price for the value they offer. After all, isn’t that the true meaning of a partner? Partners are people who look out for one another and have each other’s back, and the best way to do that is to pay them properly for what they bring to your partnership.
Anaya Vardya is president and CEO of American Standard Circuits. Vardya is also co-author of The Printed Circuit Designer’s Guide to… Fundamentals of RF/Microwave PCBs and Flex and Rigid-Flex Fundamentals. Visit I-007eBooks.com to download these and other free, educational titles.