Procuring prototypes using a vendor qualification process: process? Yes, maybe you do need a process.

Off they go again. Your company's supplier management group is leaving for the annual golf weekend sponsored by vendor X. Everyone knows that more than golf happens when a team of buyers from your company travels 3,000 miles--business class--to be wined and dined for the weekend on the vendor's tab.

This annual ritual, known as the vendor audit, is an integral part of the PCB procurement process. Long before this busy weekend laced with lobster tails and plant tours, vendor X and your supplier management group were preparing for a long-term relationship. Like a courting, well-to-do Hollywood power-couple signing pre-nuptial agreements, these two potential newlyweds were hashing through technical specifications, availability hurdles, pricing constraints, quality issues and non-disclosure agreements in order to produce a successful production run of a board. Your supplier management people will tell you that the whole purpose of the vendor site audit is to ensure that the vendor is qualified to do what he says he can do--and that he is doing it.

Rarely is an electronics engineer or layout designer invited to regale in the festivities of a production vendor audit. After all, the design portion of the project is done. But what can we in product development engineering learn from the large-scale players in the production realm about the qualification and procurement process? Can we who deal with smaller quickturn prototype vendors apply some large-scale principles to the way we do business and realize any benefit?

Here are some basic steps that your company's purchasing or supplier management group may be using to qualify new production vendors. Let's examine how these steps can be applied to selecting vendors and doing business at the prototype level.

Develop a list of potential vendors. To find a new prototype PCB vendor, you don't need to look further than the back pages of this magazine or any PCB trade publication. There are hundreds around the world that can potentially suit your needs. Part of a designer's weekly routine should be to stay in touch with the manufacturing community on a global basis. What makes this job easy is that these manufacturer's representatives consider staying in touch with the design community part of their weekly routine. If you subscribe to any PCB listserv groups or industry mailing lists, you have probably been contacted by numerous manufacturing reps. Out of the ones you are comfortable speaking with, set up a dialog and get to know them. They may be able to help you with a future board design one day.

Qualify the vendors. What a vendor's rep says a company can do vs. how the company actually suits your technical needs can be an area of misinterpretation and confusion. Until you really trust your contact, it is wise to examine the published capabilities and equipment list that a vendor's rep should provide. This information is a source of pride and is always artfully described in full color on a company's brochure and on their Web site. It is readily digestible and will allow you to quickly assess the potential capabilities of the vendor and compare them to your requirements.

Develop comprehensive request for quotation (RFQ). In contrast to production pricing, the majority of the price you will pay for your prototypes has little to do with materials because quantities are typically small. Prototype vendors will tell you that the majority of the cost of small runs is incurred by setup, tooling and processing charges--also referred to as non-recurring expenses or NREs. As the time to fabricate your design nears, you will need to be able to convey descriptive information to vendors in order to obtain pricing. They may ask for the part number. What is the overall size? How many layers? What is the smallest hole diameter? What kind of materials do you require? Is the design impedance controlled? Are there any special quality requirements or materials? How quick do you want it? Many prototype vendors have developed online quoting formats to simplify this task. Check out any vendor with an online quoting form for a good example of the minimum information required to quote your design. A fabrication drawing is usually not required at this stage, but by the time a design is ordered, a quality lab drawing will serve as a valuable manufacturing specification, an inspection guide and in some cases, a legal document should something go wrong.

Convert RFQs to the vendor's language. In the world of high-tech design, tough time-to-market scheduling and tight engineering budgets, foreign outsource prototyping has become a popular method of cutting cost. Realizing this, many prototype vendors have partnered with, or have even purchased, foreign manufacturing capability. Many a designer's experience of "going direct" with foreign prototype vendors have been frustrating due to the language/communication hurdle. However, through the use of partnered vendors or local manufacturer's reps, the current foreign prototyping experience is proving seamless to many. Bay area manufacturer's rep Tom Hanighen of Flashline Electronics was asked to comment on the greatest value added benefits of procuring prototypes using a partnered manufacturing rep:

"First, a rep that knows the manufacturing constraints of his foreign supplier and can handle the front-end (CAM setup) of your design here locally optimizes your design to match the foreign vendor. This service adds value by 'buffering' any manufacturability conflicts between the source and the supplier," said Hanighen. "Second, a manufacturer's rep can offer you better pricing than going direct because he is leveraging the power of quantity by serving the needs of a large customer base. Third, a manufacturer's rep that can communicate your requirements to a foreign supplier for you in a technical, native language adds value by simplifying the purchasing process."

Communicate RFQ to vendors. Whether using a manufacturer's rep or going direct, or whether you choose to quote online, e-mail or FTP a complete data package to a potential supplier of your prototype, the key is communication. If you are sending a job to several vendors for a competitive quote, make certain that they all have the same information. Make sure they can easily get in touch with you if they have questions. In return, you can expect that their response will be quick and concise. When you require quick-turn prototyping, you ought to have quickturn quoting response.

Determine logistics and shipping issues. Upon receiving and completing the job, how do you want the vendor to supply the boards? What is the delivery schedule? Should the parts be individually wrapped? How about shipping? How will the vendor be paid? Most engineering groups work with a purchasing department that is well versed in handling these types of issues. However, if your company is small, the task may fall to you. Make sure that these important requirements are in writing somewhere. It is common to specify them in the RFQ or purchase order contract.

Receive, compile and review quotes. Upon receiving responses to your RFQs, it is important to note the details of the quotations. It is common for vendors to supply quotations in several different forms. Some itemize, providing specific pricing for each service they provide, and some provide a "lot" charge that includes the board cost, shipping, tooling and test. You may want define a quoting format for vendors, one that will standardize the RFQ information and make it easy for you to compare numbers at a glance. Regardless of which vendor is awarded the contract, keep this information in a history file for a while. As time goes by, you will begin to see a track record of each vendor's quoting history. This can later be compared with the vendor's quality and delivery history to determine value. Many, if not all, vendors will appreciate it when you discuss value with them. If they tend to be overpriced repeatedly in the quoting process, they will more than likely "sharpen their pencils" to become more competitive, provide you better value and have a shot at getting some business.

Research vendor references. As with any product, value sells itself. It is very likely that you would recognize the names of the major Top 10 suppliers in the PCB supplier industry. But is being on a Top 10 list a good reference for your supplier needs? Remember, these companies made the list by providing value--sometimes on enormous scales to customers with massive volume requirements. Are your needs massive? If not, sending an RFQ to a listed vendor for five prototype boards in three days will do you (and them) little good. If your needs are on a smaller scale, you may find better value by locating PCB suppliers who are tuned in to supplying the prototype market. These vendors are not commonly in the headlines. Their focus is unique, their niche more competitive. They display at trade shows and advertise in smaller publications. They also rely a great deal on word-of-mouth testimonials to expand their customer base at a calculated rate of growth. These types of vendors often have a loyal customer following. It is a good idea to subscribe to at least a few PCB industry listserv networks where it is easy to get this type of supplier reference direct from the design community.

Select multiple vendors for each class of design. In the manufacturing world, it is uncommon to find a PCB vendor who is all things to all people when it comes to providing value in all classes of design. Manufacturing plants are optimized to squeeze out every last dime of profitability from the jobs that are run through their lines. Factory lines and even entire plants are set up to handle efficient processing of certain types of designs. Size, setup times, raw materials, chemicals and finishes are all factors that a manufacturer's engineering and sales departments will consider during the quotation process for a board build. Whether or not they have a line optimized for your particular design will directly impact the cost, and therefore competitiveness, of their quote. A supplier's basket can be empty or full depending on the market. It is wise to avoid "sole-sourcing" your jobs to one favorite vendor. During lean times, a sole-sourced vendor may give you great pricing--but during fat times he may not give you the time of day! Additionally, you will likely find that supplier A will have great quality pricing and delivery on two-layer boards that vendor B cannot touch. On the other hand, vendor "B" will beat out vendor A on dense multilayers every time. It is a good business strategy to develop relationships with at least a couple of vendors for each class of board you design in order to always have a solid supply chain. This strategy also keeps a healthy competitiveness in your competitive quote process.

Negotiate purchase price and terms. To purchase an expensive run of PCB prototypes without shopping for the best price can be wasteful to say the least. But discretion must be used during the competitive quoting process. Often, a new vendor's quote may appear to be cheap compared to those of a couple of tried and true vendors. It is common for a new vendor to underbid the competition to get a "foot in the door" of a perspective customer, regardless of profitability, only to slowly raise prices over time. Tracking a vendor's quoting history is a good way to keep this tricky practice in check. Again, always negotiate good value--consistent price, quality and delivery--over cheapest price.

Place a trial order. Do not send your company's hottest, most high-profile, and most behind-schedule board design to a new vendor and expect a one-day miracle. It takes time get in synch with a new vendor. Layout tools, data formats, personnel and lines of communication are much easier to decipher when there is time to question and make corrections. Choose a less complicated design with more lead time to "feel out" your new vendor. You will both end up looking better in the end. Remember that a quality business relationship is not built upon one order. It is built upon repeat orders. Whether or not you send a vendor more orders will be based not only upon value, but will have a lot to do with the many operating modes that have been mentioned so far, including communication, dependability and compatibility.

Evaluate parts. In long-term customer/supplier relationships, it is realistic to anticipate that mistakes will occur over time. That given, how will you find the problem? The painful way is reactively, where you order and assemble 50 boards before discovering that a design/manufacturing problem exists. A less perilous technique is proactively--before you build up your entire inventory, test a few boards for shorts, opens or any visual etching problems. If a problem is caught at this stage, you've saved your inventory. But now what? Unfortunately, many reactive customers take immediate action and blacklist the supplier. These folks do not have the skills or the patience to develop long-term relationships. They jump from vendor to vendor with a "Strike one, you're out!" attitude. They are easily strung along by pricing, continually dissatisfied and stuck in blame mode. But the insightful, proactive customer and supplier regard problems as little bumps in the road to achieving long-term success. Their relationship works because checks and audits are in place to measure success of the various processes. When problems are identified, it is easy to find out what happened, what process broke. When a customer finds a problem, a helpful response is to contact the vendor to get the problem fixed before it ever gets big. A reputable vendor will bend over backward to make good on a mistake, including crediting the order or re-expediting overnight.

Place more orders. As your new vendors perform well, reward them with plenty of feedback and repeat orders. As you can, cultivate your liaison by gradually supplying more challenging orders. Some vendors will even offer to build a challenging design on a "first one's free" basis to gain your confidence. As your rapport grows, these vendors will become part of your extended product development team, offering you an invaluable array of reliable services and technical help. When times are tough on the market, resist the temptation to sprinkle RFQs out to any vendor who cold-calls you. Explain that you have built solid relationships with your present vendors and want to keep them interested. They will understand and will covet your loyalty.

Visit the manufacturing facility. Did anyone say that PCB vendors who offer prototyping don't offer plant tours and allow you to audit their processes? Of course they do! They welcome the opportunity as another means of communication. A brochure cannot convey this experience with pictures. It may be true that pictures are worth a thousand words--but to encounter the manufacturing process being performed on your design is worth a thousand pictures. Shaking hands with the white-gloved QC inspector sitting next to a microscope and a pile of your PCBs stamped "pass" makes it all worthwhile. It means things are working. At this point you may just feel a need to wine and dine your vendor!

RESOURCES

Some of the information contained in this article can be found on the Web site for Technical Assist inc. at this URL: www.techasst.com/ how_to_outsourcel.htm

KELLY DACK ([e-mail]) is an IPC certified, senior-level PCB designer involved in the design, layout and procurement of complex PCBs for International Game Technology (IGT) in Reno, NV.