Just like housing, a little extra size can cost a lot more.
Printed circuit boards in panel or array format increase the efficiency of the assembly operation, especially in volume applications. Takt time is greatly reduced, and handling of product is easier. However, rising material prices are cutting into that advantage because more material is required to produce those arrays.
PCB costs are based on the amount of raw material required to make a particular board. The metal finish, like ENIG or silver, plays a part in pricing, but it is the amount of fiberglass and copper needed that really determines the final cost.
The quoted price for most boards in panel or array format is based on a fabricator's desired panel price for a particular technology or quantity, divided by the number of arrays (or pieces) that fit on a standard 18 x 24" manufacturing panel. The more arrays or pieces that fit on the panel, the lower the cost.
Whether that price is dictated by the number of boards (arrays) that can fit on the standard manufacturing panel, or by the total square inches of the finished array, a quarter or half-inch too long in one direction may mean a double-digit price difference.
That price difference is a double-edged sword: Either the board eats into profits because it is costlier to buy, or it’s a missed sales opportunity because the board could have been quoted at a lower cost.
I have seen inefficiently panelized PCBs so many times. Sure, there is always some waste in manufacturing, but how much money is the contract manufacturer throwing away on every assembly?
Maybe that board does need a full inch of material railing on all four sides for it to be assembled, but it’s worth asking whether that was the original array when the assembly was still in its prototype stage. Could it be it was never optimized for production? Did anyone bother to ask?
Buyers who want better panelization pricing must ask:
“Do we have to have railing on all four sides?”
“Does the railing need to be that wide?”
“Can we score instead of route?”
FIGURE 1 shows a PCB placed in an array in one of three configurations, revealing the cost difference realized when the right questions are asked.
The tab-routed array on the left with a large railing on all four sides is the least cost-effective design, yielding only 12 arrays per manufacturing panel.
The design in the middle has a much thinner railing, but still on all four sides, with scored spacing in between the boards instead of the route. That half-inch difference in one dimension makes all the difference, permitting 25% more: 15 arrays total per panel.
The design on the right is the most cost-effective, where the PCBs are “butted” up against one another, and just two thin rails are needed along the longer edge. Eight more arrays (a 75% increase) are available from that same manufacturing panel compared to the routed array.
Depending on the board manufacturer, square inches of the finished product can also be used to calculate pricing, especially for larger volume orders, and this illustration holds true for that method as well. Fewer square inches mean a lower cost per array or piece.
Sometimes larger railing is needed, especially if a particular assembly requires something special. An example is a component that overhangs the edge of the board and requires extra spacing. In that case, the PCB buyer’s engineering department should let purchasing know of any special requirements prior to sending them to the fabricator for a quote.
Additionally, board buyers need to talk to their production and engineering departments and ask for a company standard for assembly criteria that can be incorporated into PCB fabrication specs.
Ensure your PCB suppliers have those specs in hand, so the quotes they submit meet your assembly criteria without adding unnecessary costs or delaying quote response times.
The wasted green I see on the production floor is not solder mask. It’s dollars. PCB buyers need to see that too.
Review pricing with current and outside suppliers to confirm you are paying the going rate.
“We don’t have the bandwidth to move business.”
That's what a printed circuit board buyer told me recently.
Let’s unpack that because it could be a shortsighted attitude.
When an EMS firm puts a PCB supplier on its AVL, it often asks only for pricing on new projects. When it comes to existing work, the response is often, “We don’t move boards once they are placed,” or, “we don’t have time to rebid those,” or, “it takes too much effort to move to another vendor.”
Even in the face of rising board costs, many buyers and procurement managers resist moving production away from suppliers they’ve used for years.
What about your company? Do the people responsible for overseeing your supply chain and ensuring the most cost-effective operation make buying decisions based on lack of “bandwidth?”
If so, it’s business malpractice.
Because when that is the prevailing mindset, the PCB supplier is aware of it. They know your board buyer doesn’t want to upset the apple cart, and they will take advantage of that. OEM and EMS companies that invest too much of their annual PCB spend with only one vendor are making a costly mistake.
I understand a buyer’s concern for good quality and consistent delivery, but you can get that from more than one fabricator. And then it comes down to price. Complacency will cost you money. When EMS firms focus only on winning new business, they are putting their existing business at risk.
Many EMS companies are not being proactive to protect their existing assembly business from jumping to a competitor, especially when it comes to the cost of the bare board. Although the common wisdom is, once won, assembly programs will stay in place, in fact, over the last year several OEMs have asked me to suggest new homes for their assembly work. OEMs are taking a hard look at their assembly costs to remain competitive and maintain profit margins. PCB materials, metals and freight pricing are skyrocketing. It is good business to look at reducing costs wherever possible, especially on existing orders. It can be done successfully without sacrificing quality.
And it’s not an excuse to say board buyers are overwhelmed with responsibilities. Keeping the vendor base on its toes is a core responsibility. More important, it’s the job of upper management to ensure board buyers regularly seek offers from other vendors to compare with the prices they’re getting.
Business doesn’t always have to be moved to get better pricing, however. The PCB is usually eight to 12% of the BoM, and any savings found can either add to your bottom line or be passed on to the OEM customer, making it less tempting for them to move business away from your company.
As a custom-made item, the printed circuit board’s price is somewhat subjective, depending on technology required, volume needed, speed of delivery and location of manufacture.
PCB buyers should always review pricing with present suppliers and go outside the company AVL to confirm what they’ve been paying is in line with the going rate, especially on jobs that have been with the same vendor for a long time. With good industry knowledge, they’ll be able to negotiate intelligently. EMS management should encourage buyers to make time to actively quote other qualified sources.
Are your board buyers leveraging their annual PCB spend, or are they being leveraged by a current vendor?
It is not hard to explore the PCB market. For additional PCB supplier leads, buyers need to attend industry trade shows, read trade magazines, search LinkedIn or ask their favorite component rep about good suppliers.
Once that information is accumulated, get an NDA and ask for several quotes. If the quotes are competitive, ask for and follow up on references. If all looks well, then get your quality and production departments involved by following your corporate procedure for a new vendor addition.
At the same time, let your existing vendor base know you are looking elsewhere, even if the reason only has to do with price and not performance. At a minimum, this exercise will keep your vendors on their toes when it comes to price, delivery and quality.
Supplier diversification is vital to your success.
Don’t get complacent with your PCB purchasing practice. You may regret it.
Buy PCBs with your brain, not your heart.
“Pray for me. I buy circuit boards.”
That was a saying posted on the wall of a prospect I visited some 25 years ago. It’s funny, of course, but it also speaks to an unchanging truth about PCB buying: It’s often an emotional experience, especially when it comes to the bare board.
The PCB is the foundation of your products. It represents a good chunk – about 8 to 12% – of the cost of the bill of materials. While it is the first item needed to begin the assembly, it is usually the last item ordered. That alone can make buying boards stressful.
In my years selling boards and training companies how to buy PCBs, I’ve found it’s not a lack of knowledge about circuit boards that prevents buyers from leveraging their annual spend most efficiently; it’s misplaced loyalty or an aversion to risk.
A board’s level of technology should dictate how often to expect imperfections.
One of the most common questions I get from PCB buyers is, “How many X-outs are acceptable?” Some might say receipt of a PCB manufacturing panel or array with any X-outs indicates the supplier cannot maintain a high level of quality.
This is not necessarily the case.
An X-out occurs when a defective board in an array or manufacturing panel of like PCBs has been shipped. The board is literally marked with an X in permanent marker to signify it is flawed.
While a panel or array with zero X-outs is ideal, the board’s level of technology should dictate how often to expect this kind of perfection. If the board is a single-, double- or easy four-layer item, then a PCB buyer should expect – in fact, should demand – the manufacturer deliver panels free of defective boards.