Author Archives: Mike

About Mike

Mike Buetow is president of the Printed Circuit Engineering Association (pcea.net). He previously was editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He spent 21 years as vice president and editorial director of UP Media Group, for which he oversaw all editorial and production aspects. He has more than 30 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow

Remembering Gene Marsh

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Gene Marsh, one of the true industry pioneers, has died.

Marsh, as many readers may recall, founded PADS Software, one of the first CAD software developers, in 1977. In fact, he beat Mentor’s, Cadnetix’s and Daisy’s respective founders to the punch by four years. (1981 was a big year for CAD, as it turned out.)

Gene was such a big deal, Printed Circuit Design started an award for software innovation and named it after him.

While Gene has been out of the industry for years, this is still a sad day.

Rethinking Reshoring

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The reshoring drumbeat continues to get louder, and has now attracted the attention of the trade groups. The IPC this week launched a survey in an attempt to quantify the trend.

I took a look and would admit to finding the way some of the questions are asked perplexing — click here to see for yourself — because I don’t think that the answers derived will necessarily show whether the trend is real or not.

Most of the survey is aimed at where manufacturers plan to locate their sites, as opposed to where buyers intend to source from. In my experience, manufacturers are the tail on the supply chain dog: They move to where they think they can land the most business.

Another potential problem I see is the way the questions are worded. For instance, one  asks, “Does your company plan to move existing operations to the Americas in the next three years?” If the respondents are primarily US-based companies with US-only operations, then the trend may well appear to be “no.”

The supply chain is very complicated, and the implications of reshoring a potential game-changer for many companies. I commend IPC for its attempt to generate some quantitative analysis, although I’m uncertain whether the questions as asked will get to the core of what’s really happening (or not happening).

 

From Sydney to Shanghai

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It was a year ago that Altium decided to pack its bags and relocate its headquarters and R&D to Shanghai. The company’s revenue was up 20% year-over-year in the second half of 2011, and the pretax income, excluding charges related to the move, was $4.6 million, up from a loss of $315,000 the year before.

It’s way too premature to call the move a success, but on the other hand, those who thought the PCB software company would vanish into the Chinese ether have quieted down.


Design Tradeoffs

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As many EMS firms are trying to grab a bigger piece of the design services market, one thing we’ve noticed when we tour their digs is how much more relaxed those designers appear. They are different in terms of setup – some sit in open cubicles, others have individual offices, and still others share a common but separate office, akin to a bullpen – but no matter the configuration, the occupants come across in control and unrushed.
Contrast that to the OEM designers we speak with, who almost uniformly come across as harried.
We’re not sure why this is. Perhaps those at EMS sites are more confident in their job security, knowing that more designs are being shipped their way each year, while their OEM counterparts feel under the gun, worried that their bosses, having already outsourced fabrication and (in many cases) assembly, might at any time let design go, too.
Even so, those designers who responded to our annual salary survey overwhelming were employed by OEMs. Does that suggest EMS designers are significantly fewer in number, harder to reach, or just less interested in filling out a survey? We don’t know.
What we do know, however, is that designers are as not easily compartmentalized as they once were. More have advanced degrees and increasing responsibility. They have become integral, even if more than one-third of respondents still worry about their jobs.
About three-fourths of those who responded were based in the US (probably because the survey was conducted only in English). Most of them have more than 20 years’ experience, suggesting that cost-cutting measures elsewhere aren’t decimating the field.
The average annual US household income was $63,000 in 2011. Given that, designers are doing well. Some 73% of respondents indicated their salary exceeds $60,000, with 17% revealing salaries topped $100,000. For comparison, the median income for a bachelor’s in engineering is $82,712. And most continue to get raises in line with or exceeding the average US raise of 2.8% last year. After the roller coaster of 2008-10, stability is welcome.
Keeping up with the Joneses is one thing. Keeping up with technology is something else. More than one-third of our respondents again said maintaining their technology fluency is their biggest challenge. That’s understandable – as consulting editor Jan Vardaman notes (pg. 20), advancements in everything from wiring materials to substrate systems are ahead. Moreover, an impending shift to copper pillar offers exciting possibilities for tighter silicon and package routing, but with those come the headaches of greater crosstalk and signal integrity issues. Technology, like life, is about tradeoffs.

One more note on the salary survey. Of those designers who recommend or approve products or services, only 78% get to weigh in on CAD tools. While we understand why some designers are out of the loop on this – many EMS companies buy tools as directed by an end-customer, user be damned – it’s still jarring in this day and age that those tasked with such a critical job don’t get a bigger say in how they perform it.

(I would be remiss if I failed to add that senior editor Chelsey Drysdale conducted the survey, compiled the data and wrote the report.)

What Electropac’s Intern Program Represents

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Electropac, one of the oldest printed circuit board fabricators in the US, has established an intern program that is the focus of an NPR story today. 

I’ve known Ray Boissoneau and his family for years. Ray’s a realist: the company once was around $40 million per year in sales but now does much less. And, as the article points out, the full-time staff has dwindled from 500 at its peak to 34 today.

That drop tracks with the US domestic PCB manufacturing market, which was once a $10 billion annual business but now is around $3 billion (and probably less, once brokered boards are deducted).
 
Boissoneau doesn’t see the program as a lifeline, but it does offer an opportunity to bring new folks in the door, little by little, to give them a taste of industrial manufacturing. If the US is going to recover its former glory in the PCB market — and some say it never will — it’s going to have to do it like this: one step at a time.

All Worked Up

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It’s vogue to assert that mass employment will never return in surface mount manufacturing, but there are good reasons to be skeptical of such reports.

It’s true that efficiency and automation generally go hand in hand, and that companies look to minimize their fixed costs. (While some economists consider labor a variable cost, I think it’s more practical to view it as a fixed cost because, in practice, it is very difficult to match staff to short-term dips and peaks in demand.) But it’s also true that as we drive down the cost of electronics, we expand the potential market for those products, thus potentially increasing the volumes. Higher volumes demand additional lines which in turn begets increased staffing.

I do think there will be a continued tendency to reduce the number of workers per line, but true “lights out” manufacturing is still a long way off. As long as the demand for electronics remains insatiable, and as long as creative designers and engineers continue to dream up ingenuous ways to integrate technology into every facet of our lives, we will need workers — and lots of them — to turn those dreams into reality.

What’s the Buzz?

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Teams shows individual members talk to each other often are more effective than those whose mode of communication runs through the boss.

So says an MIT researcher who has studied patterns of industrial communication for the past decade. What Dr. Sandy Pentland has found is that the pattern of communication is more important than the specific talents of the individual team members. In other words, a team that communicates well is greater than the sum of its parts, while the team that rigidly adheres to old school ways of sharing information will fall short.

The analogy is a beehive, where the swarm actually is able to transfer data faster and in more usable bits than alternate systems can achieve. This fosters creativity and speeds idea innovation, Pentland’s research found.

Pentland’s paper, “The New Science of Building Great Teams,” is in this month’s Harvard Business Review. An alternate synopsis of the paper is here.

Early Thoughts on the Mitchell Administration

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The hiring of John Mitchell as IPC’s new president comes as a breath of fresh air to those of us who had long tired of the antics of the previous regime.

Mitchell, the fourth person to run the 55-year-old organization, is the first with electronics industry experience, having spent a combined 16 years at Bose and Alpine Electronics.

As Bill Bader and Jim McElroy at iNEMI have proved, when it comes to running a not-for-profit volunteer organization in this industry, experience counts. The supply chain and regional differences are far too complex and the technology too intense for a greenhorn, especially one who isn’t willing to do their homework.

We envision — and hope — for a return to the days when member input is sought and valued. More than that, however, we are eager to see the occupant of that important position have a vision and tenacity that goes beyond avenging imagined personal wrongs.

Mitchell has his work cut out for himself. The industry is fractured, physically and emotionally. He will have to learn to lead without alienating, something his predecessor never accomplished. He will have to mend fences with the North American board fabricators, on whose shoulders IPC was built but were later ignored or cast out as the organization moved into the more lucrative assembly market. He will need to understand that the suppliers are generally looking to protect declining margins, and yet much of the technological know-how has migrated to that side of the industry, so he will need to convince them it is in their best interest to continue to support IPC’s technical programs, not just the exhibitions. He will need to navigate the treacherous China-US relations, in which the occasionally nasty spells of provincialism and finger-pointing from both sides mask an underlying dual-relationship that neither party can live without. He will have to right an internal culture that has grown distant from its membership. And he will have to do so while determining whether the four (!) vice presidents who applied for the job — two of whom have now been rejected multiple times — are up to the task of working with the man whom the IPC board considered a superior leader.

Based on Mitchell’s resume and conversations with IPC board members, he is the right person for the job. He is first and foremost an engineer. He has a deep business background that belies his age (he graduated college in 1991). He has worked at a high level for a major supplier of consumer electronics, giving him insight into branding and the supply chain intricacies that his predecessors either never had to deal with or were unable to master. We look forward to the next chapter in the continuing story of IPC.

Viasystems: An Eye on Details

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Is Viasystems up to its old tricks?

The PCB fabricator today announced a deal to acquire DDi for $268 million, a move that will push the company back into the industry top 10 for the first time in years.

Keep in mind, 12 years ago, Viasystems was the second largest PCB company in the world, behind Sanmina, with sales of about $1.25 billion. The deal pushes Viasystems past that mark for the first time since 2001. That’s when the dot.com market imploded, and telecom was wiped out, taking much of Viasystems’ capital with it.

That disaster made Viasystems something of an industry punchline. Two bankruptcies followed, plus a high-profile takedown of the venture capitalists behind the company, and some expected the entity to collapse like a black hole. But lo and behold, the remaining management wisened up, stopped buying other people’s garbage with other people’s money (Viasystems paid cash for DDi), and concentrated on learning the business. They shuttered money-losing operations in the US and Europe, and broadened their focus to automotive. Oh, and they learned being smaller and profitable is better than being the biggest and bleeding.

What a difference a decade makes.

What this means for Mikel Williams has not yet been revealed. The DDi CEO remade the company, which also suffered badly after a series of management missteps and internal struggles. Profits have improved four years running (revenues took a minor hit in 2011), and the company successfully absorbed smaller rival Coretec without a hitch. One hopes Williams stays in this industry; he’s a star and would be missed.

Also watching this closely will be Shennan Circuits. DDi reportedly outsources some of its larger orders to the China-based board shop. That is certainly about to change.