BOARD BUYING
3 Reasons PCB Buyers Pay Too Much
“We have used this vendor for years” is not a viable strategy.
As the price of PCB materials continues to skyrocket, why are some circuit board buyers stuck firmly in the past, doing business as they always have? Why, even when paying more than they should, do they fear upsetting the apple cart?

Bare board buying can be competitive, but only if those overseeing their company’s PCB supply chain are willing to occasionally buck a system put in place years ago. For circuit board buyers and procurement managers in particular, I see three ingrained habits that do damage to a firm’s PCB purchasing program and its ability to get competitive pricing.

1. Buyers are untrained. One outdated practice in the PCB industry that always amazes me is the willingness to throw buyers into the deep end without giving them 21st century training on how to buy boards. Does management assume PCB buyers will gain all the knowledge they need on the job? Sometimes, they probably do. But often, they end up costing their companies a lot of money as they learn from their mistakes.

Too many OEM and EMS companies have a seat-of-the-pants approach to buying printed circuit boards. Sooner or later, their untrained buyers will hurt the bottom line, either through reduced profits or lost sales. PCBs will be quoted incorrectly, and buyers won’t know how to leverage their spending power across the vendor base.

Why would assembly firms, especially those that tout ISO certification, not provide training in buying the commodity that is the foundation of their assembly processes and one of their largest expenses?

2. Buyers are overwhelmed. Buyers are now responsible for the acquisition of everything from HDI boards to cable assemblies to, sometimes, the office toilet paper. Keeping the vendor base on its toes is a core buyer responsibility, but it’s the job of upper management to ensure buyers have the resources they need to focus on bringing prices down, both for new opportunities and existing business.

PCB buyers should regularly seek offers from other vendors, especially on business already in-house elsewhere. Things change, and buyers should be ready to pivot to less expensive solutions, even for customers that only want to consider domestic suppliers. Unfortunately, many OEMs and EMS companies make the process of moving PCB orders to new vendors too cumbersome, taxing the overwhelmed buyer even more.

The truth is adding qualified suppliers is not as hard as you may think. And being able to offer your customers a list of vetted suppliers – offshore or domestic – will demonstrate your company’s commitment to seeking the best pricing.

Your purchasing team deserves a quick and seamless process for bringing on those new suppliers. Make sure they have it.

3. Buyers are too comfortable with the status quo. OEM and EMS companies sometimes say a customer will not allow them to move business from an existing vendor. In some cases that’s true. But often, it’s simply a way to politely turn away a PCB salesperson.

Is there something unique about the PCB that only a particular manufacturer can build it? Or is it out of fear that if the order were to move, there’d be a quality problem? This is an understandable concern, but PCB buyers should not be held hostage to one particular manufacturer. Many qualified vendors are out there.

Ask yourself: “Does my PCB vendor know I won’t or can’t move an order once it’s placed?” If so, you as a PCB buyer have made a big mistake. Many vendors will take advantage of that knowledge, as their fear of losing business is diminished.

Board buyers must never leave vendors too comfortable about whether they’ll get that next order. Vendors should be motivated to keep your business by holding pricing in check. Let them know all PCB jobs will be actively quoted, new orders and reorders.

The threat of losing business will help keep PCB vendors at the top of their game when it comes to pricing, customer service, and timely delivery. And PCB buyers should be wary of becoming complacent with their vendors. Buyers should leverage vendors, not the other way around.

In the post-pandemic PCB supply chain, companies that stick with the old approaches will have a much harder time remaining competitive. “We have used this vendor for years” is not a viable strategy.

But having a trained and confident buying team will boost your bottom line and help keep your customers happy.

Ed.: The author will present a webinar on saving money on PCB purchases on May 19. See pcb2day.com for details.
Greg Papandrew portrait
Greg Papandrew
has more than 25 years’ experience selling PCBs directly for various fabricators and as founder of a leading distributor. He is cofounder of Better Board Buying (boardbuying.com); greg@boardbuying.com.