During this recession, electronics companies are faced with difficult decisions. The money being spent on electronics is far less than a few years ago. This applies to most industries; consumer, telecom, networking, medical, industrial, the list goes on. What this means is that the competition for the dollars that are being spent is tougher, so electronics companies have choices on how they run their business and product development activities.

Management strategies during a recession

Many companies do nothing, except keep running things the way they have been, hoping the recession will pass and they will emerge intact. The issue with this “wait and see” attitude is the unanswered question, “how long will the recession last?” Do they have enough equity to keep afloat and can they keep their stockholders happy?

The second approach is to pull back—reduce R&D; lay off designers; stop investing in design tools and infrastructure. The problem with this is while they may reduce their operating spending, they will definitely fall behind their competition, lose whatever sales they might have had because their products are lagging, and have an extremely difficult time coming back up to speed when the recession finally does end. This may be a short term good move for the company’s bottom line, but a mortgaging of their future.

The third approach is to become even more aggressive in their R&D, focusing on developing the best, most competitive products so whatever dollars are being spent in the industry are spent on their products. They invest in productivity and efficiencies in the development process thus managing their budgets. The result is that the company gets those limited dollars being spent while controlling their operating expenses. And they emerge out of the recession at full strength with no re-startup time.

According to Forbes.com, McKinsey Quarterly, April 2009: “Notably, the companies that get the greatest benefit from innovation appear to be taking a different approach. Executives at such companies are far likelier to say that they are increasing R&D budgets, expanding R&D activities and shifting to longer-term, higher-risk projects. These executives are also nearly twice as likely to report that their companies view the downturn as an opportunity to upgrade R&D. As such results suggest, companies that already excel at R&D seem to be using the crisis to extend their competitive advantage.”

So where do they invest? If the goal is to develop the most competitive products, then they have to use the latest, greatest IC, FPGA, and PCB fabrication technologies. But the true differentiation will only be realized if the designers have the knowledge and tools that enable them to use these technologies.

The knowledge comes in several forms. The development team must know when applying a new technology has benefit, and what the tradeoffs are (cost, functionality per area, designer productivity, product performance). Just because it is fascinating technology does not mean it applies to every application. So educating the team and giving them the technology decision-making knowledge is critical.

Next, they must train their designers on the best way to implement these new technologies. Using HDI/Microvias, embedded passives, high performance ICs, and high pin count BGAs, etc., requires special knowledge and can doom a project if not used properly. This applies not only to education on the design tools, but also the best approaches to a specific problem.

Two books have been written on the knowledge and use of these advanced technologies. One, by Happy Holden, covers the basics and tradeoffs of implementing HDI, Microvias, embedded components and other advanced technologies.¹ Another is by Charles Pfeil and gives detailed approaches to using HDI/Microvias to fan and break out very-high pin count BGAs.²

Design Tool Investment

The next investment is in the design tools used to develop the products. These tools should be the most sophisticated possible so the designers can spend their energy on being innovative, not fighting with the tools to design their advanced products. These tools should have value in several areas:

First, they should be able to implement the most advanced IC, FPGA, and PCB fabrication technologies. But you could argue that almost any tool can handle these technologies given enough effort on the part of the designer. So the key here is productivity and quality of results. To efficiently implement today’s high performance, high pin-count/-density ICs requires automated functionality to perform the PCB routing and to analyze the signal and power integrity. Forcing a designer to use a less-than-optimum design solution only serves to add development costs and design cycle time.

Secondly, the design solution needs to have an infrastructure that enables the entire design team to create, control, and access the company’s intellectual property (IP) whether that team is local or dispersed around the globe. An infrastructure supporting this IP (component libraries, work-in-progress design data, design date for re-use from previous designs, and design constraints such as high speed and manufacturing rules) must be tuned to the needs of the electronics designer and readily accessible on the desktop.

Lastly, we must recognize that the development of a product requires more than the PCB. Mechanical designers must create the enclosure and assure that it can be thermally managed. The design of an IC or package may be performed by a completely separate group utilizing a different set of design tools. Procurement, test, manufacture (may be outsourced), and other organizations are required. So for efficient, high quality development of the product, all of these disciplines must be able to electronically collaborate. Decisions need to be negotiated, not via exchanging paper, but through software specifically tuned for multi-disciplined collaboration.

Summary

During a recession, the tendency is to try and cut all costs, including what you spend on your design capabilities. But buying cheap tools, or not investing in the designers’ education, will result in just what you don’t want in a recession. It can be shown that the cost of the tools becomes incidental when you consider what going cheap will cost the company in terms of not developing the most competitive product possible or getting it to market too late.

References

1. http://www.mentor.com/products/pcb-system-design/blog/post/free-download-all-you-wanted-to-know-about-hdi-and-more--5d989df9-aa68-4375-8679-dfcab3c0b19a

2. http://www.mentor.com/products/pcb-system-design/resources/bga-breakouts-routing/