Offshore outsourcing has caused its fair share of pains for the U.S. PCB manufacturing industry. The large-scale production moving offshore has resulted in a drastic decline in the number of North American PCB fabricators in recent years. Since 2001, 30 PCB manufacturers, on average, shut down each year. Now, however, domestic PCB design software and manufacturing companies that predominantly conduct business through online mediums are experiencing a surge in their customer base.

This swing of the pendulum can be attributed, in part, to the confluence of two important factors. First, though impossible to discount the value of moving production offshore, it has become increasingly clear that moving production offshore too early in the design phase can be impractical and costly. Second, thanks to PCB manufacturing customers’ recently developed experience working in international markets (either directly or through U.S.-based sales agents, brokers, or contract manufacturers), they are more confident and better skilled in conducting the business of scheduling and managing production via electronic means.

Forward-thinking PCB fabricators, particularly those that specialize in prototyping and  high-mix/low-volume work, are capitalizing on the viability of the global electronic communication channel. Managing projects online—even ordering online—opens up a range of new service opportunities, but it also creates the potential for new pitfalls. Weighing the pros and cons of Internet-based service providers can help determine whether such a business relationship can be a good fit and, if so, where it would be most beneficial in the design process. Moreover, knowing what to look for in an individual provider will help design teams choose the provider best suited to a particular project, regardless of geography.

The Lessons of Offshore Outsourcing

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Offshore outsourcing is often more expensive than companies originally anticipate, thanks to the increased fixed costs of cross-continent process management. This is particularly true for the servicing of prototype designs, where offshore outsourcing falls well short of expectations. After some years of practical experience in PCB offshore outsourcing, electronic manufacturers are now fully calculating the real costs. What was once a perplexing, less-than-expected return on investment is increasingly turning into a significant loss of margin. While the current weakness of the U.S. dollar has certainly tipped the scales, it isn’t the root cause for the squeeze on margins. Instead, the weak dollar has only magnified why outsourcing prototype projects is unprofitable.

Offshore production does provide value. Moving production overseas works best when a large quantity of the same product is manufactured—design revisions are kept to a bare minimum and quantities are known months in advance. Situations that call for agility, such as design conception and prototyping, unleash a range of new variables and pain points.

In prototype design development, the need for immediate, effective communication and coordinated effort is heightened. Transition plans, phase-ins, phase-outs, and revision control demand greater attention and become more susceptible to errors caused by language issues and response times, creating potential for unforeseen design flaws. Offshore production manufacturers that are optimized for large runs will end up losing money on low-volume prototype work and simply aren’t geared to respond appropriately to the additional support required in the development phase.

While prototype design may not have transitioned gracefully to offshore manufacturing, the attempt to do so has raised a number of compelling issues that some PCB manufacturers are investigating. First, it brings design for manufacturing (DFM) and design for yield (DFY) discussions to the forefront for engineers and project managers. Both are seeking ways to fold manufacturing parameters into the design so as to increase the robustness of design modularity and maximize overall yield while minimizing the cost of outsource process management. Plus, experience has now shown that design teams can use digital communication channels in a meaningful way to streamline their work and manage manufacturing order processes.

Lessons Translate Into Business Opportunity

With companies electing for offshore production, even customers most leery of e-commerce had to develop the skill sets to work electronically. Companies relying on U.S.-based sales reps or brokers to manage the relationship with the offshore production facility also now know that the bulk of this communication is happening electronically. No longer fearful of risks in the communications channel, customers are becoming increasingly comfortable with using an online mechanism to interact with their PCB fabricators. And fabs are noticing.

A growing number of U.S.-based PCB fabricators are using digital communications and a specialization on prototypes to solve customer pain points and are filling the growing prototype gap in offshore facilities. Eager to provide the value that prototyping engineers need, these PCB manufacturers are using the online medium to provide innovative and collaborative work environments that provide designers with greater control over their requirements—all without losing sight of the transition into production.

Advantages of Going Online

Internet-based businesses have become much savvier in recent years. PCB service providers are no different, as they are consistently developing and adding new features, tools, and services to guide and support customers through their processes. Selecting an online service provider can offer a number of advantages that traditional fabricators may find difficult to duplicate.

24/7 Access. A global Internet-based business embraces the perpetual and ubiquitous nature of e-commerce. With a sales territory that extends worldwide, leading PCB service companies will make a commitment to staffing the customer channel at all hours. In addition to providing requisite support to customers on the opposite side of the globe, companies can assist local designers who may be racing through the night to meet a project deadline.

Information Audit Trails. One of the secondary benefits emerging from offshore outsourcing was the increased documentation brought about through email and other electronic communications. Previously, designers and fabricators might have made design changes based on a conversation and a handshake, leaving the revision undocumented and untraceable. Now, the use of email as well as Internet-based ordering and design reviews means that both the designer and the fabricator have full access to the complete history of the processes and knowledge involved in design development.

Competitiveness. With geographic borders effectively removed from one’s sales territory, Internet-based manufacturers must be equipped to service customers next door or internationally. For designers, this means increased global access to world-class PCB manufacturers and service providers. For service providers, this means constant attention to maintaining their competitive edge—whether in pricing, customer service, or design tools—to ensure their businesses survive and thrive.

Convenience. With their central “office” online, Internet-based PCB service providers are easy to reach. An Internet connection is all that is needed to access a manufacturer. In addition to online support, many service providers also offer customer service call centers that operate around the clock to provide additional support.

Service Comparisons. To some degree, shopping online for a PCB fabricator is not much different than shopping for any other item over the Internet. Customers want to be able to size up prices and service levels before making their selection, and it is not uncommon for PCB service providers to lay out all of their service levels up front to ease this comparison process. Some providers will even allow potential customers to obtain quotes without requiring signups or accounts. As a result, customers can ensure that they are obtaining the right value mix of service and price for their specific project needs.

Drawbacks to Web-Based Providers

While Internet-based PCB service providers can provide an array of benefits to design teams, there are some areas in which they may fall short of expectations. As with any other decision, designers will need to determine if the advantages are significant enough to overcome the drawbacks for their particular project needs. In some cases, forward-thinking service providers will have developed alternative processes that compensate for any perceived deficiencies.

Lack of Visibility Into Manufacturing. In the earlier days of the PCB industry, designers either worked for firms with an in-house PCB fab shop or they relied on a local or regional fab. Either way, it was feasible for the designer to spend time on the manufacturing floor to learn the details of the process, including manufacturing capabilities and limitations. This firsthand knowledge inevitably made it back to the designs they created.

With today’s Internet-based business, a relative lack of visibility into the manufacturing process could potentially derail a design team. However, the situation is similar to that faced—and resolved—by fabless semiconductor companies. PCB fabricators can address the issue by publishing their process as design-rule files loadable into common design tools. This approach allows fabricators to communicate the subtleties of their processes in ways that can be accessed and utilized by widely dispersed engineers, keeping their designs within a manufacturer’s constraints.

Schedules Subject to Shipping. In-house or regional fabs clearly make delivery easy. With an Internet-based provider, there is no getting around the issue of shipping times. While online providers do factor shipping into scheduling, there will be additional logistics to manage. Ship times will certainly decrease when working with a fabricator in the same part of the globe, but working with an international company will increase the complexity overall.

Online providers can minimize the impact of shipping times on a schedule by introducing efficiencies in other areas, such as communications and manufacturing. Innovative low-volume/high-mix fabricators are connecting manufacturing suppliers all along the supply chain, giving designers full access to board fabrication as well as services like assembly houses that also specialized in high-mix, quick-turn assembly. In some instances, PCB fabricators are also providing access to parts lists from manufacturers or parts distributors, providing the latest pricing and availability information to ensure that obtaining the necessary components will not contribute to schedule delays.

Working Collaboratively in an Online Environment

If the opportunities offered by online providers are in line with a design team’s goals, the next step is to zero in on a provider that will be the best partner for the project. Collaboration is one of today’s biggest buzz words, and for good reason—collaboration is how things get done in the current global and somewhat fragmented environment. A firm that is focused on creating success for design teams is a firm that will make the effort to develop innovative support, services, and tools to make the process as painless and efficient as possible.

A number of factors could impact a decision to opt for a particular PCB service provider. From customer support and value-added services to an eye toward improving design flow, today’s Internet-based PCB providers are providing compelling solutions to design flow issues and are reinventing the PCB industry in the process.

Quality and Support. Quality and support go hand in hand, as leading providers have invested in the equipment, systems, and talent to back their products and services. Designers require unique and specialized assistance in the development of preproduction designs, and it’s important to find a partner who can not only respond any day or time, but can provide smart support and guidance to keep designs moving forward.

Value-Added Services. In addition to dependable customer support, innovative PCB manufacturers are offering no- or low-cost design tools to help engineers keep their designs within a fabricator’s specifications. The design tools flag manufacturability issues interactively during the design process, enabling engineers to correct potential problems before they get to the manufacturing floor and cause further delays.

Similarly, some PCB fabricators are introducing DFM and intermediate data format add-ons for third-party design tools, enabling customers to incorporate a manufacturer’s design parameters within a familiar toolset. By distributing such tools and utilities without any associated licensing or support costs, today’s PCB manufacturers are helping clients achieve a successful prototype in fewer design spins and at a lower cost.

Actively Improving Design Flow. All engineers have pain points when it comes to conceiving a design and getting it into production. Those in the PCB manufacturing industry know that access to various other specialists is critical to completing a design, and many are establishing data flows with collaborating companies to enhance the design process. Gathered together in a design ecosystem, these collaborative relationships are intended to assist design teams by providing more information, supporting designs more effectively through the manufacturing supply chain, and speeding up the entire process to reduce overall costs.

Trends in how designers work are driving the collaborative relationships built by PCB fabricators. For instance, designers are now working from the bill of materials as a planning tool to avoid manufacturability issues associated with components, a change that can be attributed, in part, to RoHS compliance requirements. To address the emerging focus on components and new production guidelines, PCB fabricators are folding parts manufacturers and distributors into the design environment, using interactive tools to provide design engineers with instantaneous information about parts availability and pricing.

In addition, some PCB fabricators are collaborating with assembly firms to improve data flows between the two and dramatically shortening turn time of a fully assembled prototype design, from order to delivery. Some of the latest partnerships allow for simultaneous notification along the manufacturing chain. For example, an order is submitted to the PCB fabricator and the assembly house at the same time, allowing the assembly house to prepare for the job while it is still being fabricated and resolve any parts or assembly concerns before they interfere with the manufacturing process.

An Eye to “Real” DFM and DFY. DFM and DFY are increasingly becoming the focus of discussions within the PCB industry. Fabricators are responding to these discussions by introducing systems and processes that bring manufacturing upstream in design flow but that, in some sense, also redefine design flow. Rather than a linear process, design flow becomes a dynamic, comprehensive system that balances many sets of simultaneous constraints to enhance yields and deliver robust, innovative, easily reproducible, and profitable projects.

PCB fabricators with an eye to real DFM and DFY are building design and manufacturing environments that help design engineers make meaningful connections that enhance the design flow and ultimately lead to opportunities to improve the return on investment. To remain relevant to designers, these ecosystems must constantly evolve to include potentially beneficial partnerships, tools, and processes.

More Control for Design Engineers. Engineers are ultimately responsible for the success of their designs, and PCB fabricators are cognizant of the need for collaboration and control in achieving the intended result. Today’s leading design ecosystems will include all stakeholders in the process to ensure the opportunity for meaningful design flow connections. With readily available manufacturing and sourcing information, project teams have the ability to design around known constraints, avoiding fatal flaws that could result in revisions, delays, and cost overruns. The more information available, the more designers can work within various constraints—such as target component costs, form/fit/finish, compliance, complexity, and reliability—and maximize the possible yields.

Real Value in Sourcing Online

The total amount of PCB manufacturing work in the U.S. has declined over the past decade, as the lower costs associated with offshore mass production draw business away. However, it is becoming apparent that foreign production facilities do not always provide the best value, particularly in the earliest stages of design conception and prototyping.

In the domestic PCB industry, innovative manufacturers are taking advantage of the service gap for prototyping engineers among offshore providers. Today, these U.S. manufacturers are collaborating in a virtual, value-added way to meet designers at the pain points in the design flow, giving them more control over their needs and requirements. PCB manufacturers are gathering project stakeholders together to share information and ease the design process for engineers by creating virtual ecosystems in which to design. Using the online medium to foster this collaboration, PCB fabricators are making use of customer skill sets, discovering new ways to add value, and improve yields all while improving the overall design to manufacture process.