Connect the Dots: Reassessing the Risk of Offshore PCB Manufacturing

Offshore board production has long been considered an effective way to reduce the cost of producing electronic devices here at home, but those savings often demand a higher tolerance for delivery issues and come with lowered expectations for quality. In addition, the risks associated with global supply chain logistics have increased in the wake of COVID-19, and the component costs of offshoring already were increasing due to rising wages abroad, persistent high overseas transportation costs, and uncertainty surrounding global trade policies.
These macro-factors are not unique to our industry. Their impacts can vary as market conditions evolve. Problems with quality assurance (QA) are a more persistent issue when it comes to PCBs, accelerating the reshoring trend. When quality issues occur, they are usually accompanied by an absence of transparency. Collaboration with offshore manufacturers is inherently limited by time zones, distance, and, sometimes, language. These impersonal relationships foster a “take what you get” transactional paradigm that device manufacturers should not and cannot tolerate.
 
Offshoring Production Can Onboard Problems
Along with the highly visible risks, there are some less apparent complications that will tangle up a manufacturer. If you plan to offshore PCB manufacturing, carefully examine the impact on your domestic operations in several key areas.
Offshore manufacturing does not automatically equal savings and can disrupt cash flow. If you need the boards fast, expedited shipping might end up offsetting much of your potential cost savings. Most Chinese manufacturers require full payment for prototypes or small-volume orders before they begin production. If offshore PCBs fail to meet design specifications and you’ve already paid for them, you have limited leverage with the supplier—meaning the resources required to re-tool the boards yourself or adapt the product to accommodate them further masks the real cost of low yield. 
 
Increased Risk Can Unleash Additional Costs
Risk mitigation isn’t free, and the resource burden required to manage it falls on your domestic production team. This creates additional hidden costs that can quickly add up to offshore manufacturing actually being more expensive than domestic. 

sunstone_0720-1.jpgAn overseas manufacturer in a time zone 10–14 hours different from yours builds your board while you sleep. Unfortunately, if you need to speak directly with someone on the offshore team, one of you will be getting up in the middle of the night to do so. Disruptions to routines like this can lead to miscommunications, misunderstandings, and expensive mistakes (Figure 1).
 
Your IP Won’t Protect Itself While It’s Away
The threats to your IP are complex, vary from country to country, and require a substantial financial commitment to combat. Laws surrounding domestic patents, trade secrets, and mask work are antiquated and provide minimal protection. Little or no motivation exists in places like China to protect U.S. corporate IP. Their laws, aimed at protecting foreign IP, are mostly toothless and carry limited enforcement effort with them.
 
Your Production Volume May Not Justify the Journey
Volume is one critical factor in determining whether to use a domestic or offshore manufacturer. Offshoring favors simple or established PCB designs that require high-volume runs with long lead times. The larger, potential aggregate savings better insulate your bottom line against less apparent offshore manufacturing costs.

The return on offshore manufacturing investment diminishes quickly when dealing with a lower volume or prototyping production. This QA risk alone should give pause to lower volume producers. A domestic resource offers more transparency to the manufacturing process, and collaboration happens faster and with less effort. Issues resolve quickly, which minimizes risk to yield and PCB quality.
 
Excellence Is Not Relative 
During the transition from design to manufacturing, you need effective communication and coordinated effort to succeed. Transition plans, phase-ins and phase-outs, and revision control demand immediate attention that is sometimes unavailable because of time zone differences. Respected PCB fabricators in the U.S. build their businesses by excelling in these areas, while offshore vendors simply aren’t structured to provide the responsive support often required in such situations.

For an overseas provider, it is hard for your small-run project to be a priority. Even if you have an established PCB design to manufacturing flow, larger production runs will take precedence over smaller ones. Unless you are prepared to overstock to accommodate your offshore vendor, this widely accepted practice impacts scheduling and can ripple through your supply chain—adding up to significant delays in getting the finished product out the door. 
Domestic manufacturers are structured for better flexibility, can provide real-time support, and are more likely to better meet the needs of low-volume production. They are also more likely to adopt green manufacturing practices and provide a safe working environment for their employees—qualities increasingly important to members of our industry. And if you operate on a JIT basis, fabricators located in your hemisphere pose less of a scheduling risk.
 
Did You Get What You Paid For? 
Once your boards arrive from the offshore fabricator, yields become your next concern. Again, we encourage multi-dimensional analysis of the production. Instead of targeting a percentage yield and checking a box, consider the consistency of yields over time, along with the boards’ functional reliability in the end product.

sunstone_0720-2.jpgLong-term reliability is a key measure. Counterfeit components routinely find their way into PCBs manufactured offshore (Figure 2). Some substandard parts are easy to spot, but not so much with others. Counterfeit components in your offshore PCB may stand up to initial testing, and then fail after your product is in use. This can impact product performance, reduce customer satisfaction, and, eventually, tarnish your reputation in the marketplace. 
 
Conclusion
Making the right decision about domestic versus offshore PCB manufacturing depends on a thorough cost-benefit analysis. Your results will vary depending on volume and design requirements. We encourage our customers to look for the hidden costs in offshoring and seriously consider its less quantifiable pain points.  
 
This column originally appeared in the July 2020 issue of Design007 Magazine.

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2020

Connect the Dots: Reassessing the Risk of Offshore PCB Manufacturing

07-15-2020

Offshore board production has long been considered an effective way to reduce the cost of producing electronic devices here at home, but those savings often demand a higher tolerance for delivery issues and come with lowered expectations for quality. Bob Tise and Matt Stevenson explain.

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Connect the Dots: The Power of Forward Thinking

06-06-2020

Innovation comes in many forms and from more places these days. Bob Tise and Matt Stevenson discuss how innovative electronic devices all contain PCBs, and share pro design tips for bringing new products to the market.

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Connect the Dots: Picking a Prototyping Strategy

05-29-2020

No matter how simple or complicated your electronic project, PCB prototyping is part of its journey from concept to reality. This process of turning the design into something physical can teach you a lot about what needs to be tweaked and improved before your PCB is ready for full production. Bob Tise and Matt Stevenson explain how before you can prototype, you have to design.

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Connect the Dots: Increased Focus on Health and Wellness Transforms the PCB Industry

04-04-2020

Our increased focus on health and wellness drives technology advancement for personal devices and those used in the delivery of healthcare. Bob Tise and Matt Stevenson explain how this trend also drives both PCB production innovation and a long-overdue update of the employer/employee relationship.

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Connect the Dots: The Seven-year Etch

03-16-2020

PCB etching seems like a simple task on the surface, but quite a few things can go wrong during this process. Adhering to best practice and continuous improvement is a must to help avoid issues with your finished board. Bob Tise and Matt Stevenson share their design tips for a better etching process.

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Connect the Dots: You Can’t Afford Not to Consider ISO 9001

02-19-2020

“Produce quality or die” may sound harsh, but for manufacturers in the electronics industry, it is true. The ability to consistently produce a quality product profitably is the baseline for business success; if you can’t do it cost-effectively, then you can’t innovate, develop new products, or open new markets. No one knows this story better than Nancy Viter, VP of operations at Sunstone Circuits.

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Connect the Dots: Design Tips For Layout

01-06-2020

As a PCB manufacturer, we receive hundreds of PCB layouts represented in Gerber format every week. As you might expect, they’re not all created equal. Some of the layouts check every box and roll straight into manufacturing, while others need work before they can be sent to the production floor.

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2019

Connect the Dots: A Penny for Your Thoughts on Copper

11-19-2019

You're probably thinking: “Bob can’t possibly write an entire article dedicated to the use of copper in PCBs.” To that, Bob says, “Hold my beer.”

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Connect the Dots: Build Quality Into Your Boards and Processes

11-06-2019

To the procurement clerk, a PCB may seem like it is just a line item on a bill of materials (BOM) or parts list during the production of an electronic device. At Sunstone, we know differently. The PCB is the building block for all of the components and parts in your electrical project.

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Connect the Dots: A Proactive Approach to Controlled Impedance

10-09-2019

You can save time, money, and effort if you are aware of the impedance math when you sit down to design your board. Gain this awareness by using a good impedance calculator, and you can build the right tolerances into your design. Impedance testing becomes a double-check of your work instead of the tool you rely on to tell you if your documentation is correct. Documenting impedance requirements properly is more onerous than most people realize. Though it seems simple, PCB documentation is a details game that often leaves knowledge gaps for your manufacturer.

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Connect the Dots: Managing Global Supply Chain Uncertainty

09-03-2019

We are well into the second year of tariff-centric trade policy, and one thing appears certain—uncertainty is here to stay. Though most of the media focus has been on cars and steel or consumer prices and corporate profits, the enduring challenge for both the electronics and PCB industries has been maintaining reliable global supply chains.

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Connect the Dots: Five Best Practices to Ensure Manufacturability

08-01-2019

When you send your design for manufacturing, your partner does not know what type of device the board will be part of nor the conditions in which it will have to perform. It’s common for harsh environments or exposure to mess up a board’s performance. If you call out materials that will not tolerate the end-product’s operating environment, bad things can happen—such as a smoking board, for example. Be sure your board can tolerate thermal stress or solder joints risk breaking and damaging components.

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Connect the Dots: The Future of PCB Manufacturing Doesn't Belong to Robots, but to the Users

07-09-2019

Is the world ready for the consequences of rapid automation? Will the use of robots displace entire categories of workers? Can artificial intelligence really “think”? How will manufacturing, including PCB manufacturing, be affected by all of these smart robots? These questions actually come from a pamphlet published in 1955: "The Age of Automation: Its Effects on Human Welfare."

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Connect the Dots: Accurate Gerber Files Are Mission-Critical for Smooth PCB Manufacturing

05-30-2019

Gerber files can reveal design issues ahead of the quote process and ensure your manufacturer has everything needed to produce your boards correctly. After consulting with Engineering Support Specialist Eric Haugen, we explored some best practices for making sure that Gerber files are accurate.

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Connect the Dots: Preparing for Tomorrow’s Technology Today

05-16-2019

At a recent Sunstone Circuits planning summit, Matt Stevenson, VP of sales and marketing, and Bob Tise had a wide-ranging discussion about emerging technologies and how they will impact PCB manufacturing. The following is an abridged transcript of this conversation.

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Connect the Dots: MakeHarvard 2019: Bigger and Better!

04-09-2019

Sunstone Circuits was eager to return to MakeHarvard as a sponsor and creator of a competition category this year, also serving as both mentors and competition judges. If you were there, you saw us—we were hard to miss in our bright orange vests. As mentors, we were out and about helping students and answering questions.

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Connect the Dots: Exploding PCBs: Don’t Lose Track of Voltage in Your Design

04-01-2019

Managing split planes? Your CAM tool will not do it for you. We see this almost every day—not exploding PCBs, which pretty rare—but rather problems created by having more than one voltage on a power plane layer. From where we sit, this is one of the more insidious and costly challenges facing PCB designers.

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2018

Connect the Dots: Six Tips to Ensure Parts Fit on Your Board

12-12-2018

One of the most frustrating mismatches with alternative through-hole parts occurs when the land pattern matches, but the pin size is off. If hole sizes are too tight, pins may not fit through the holes, or if they do go into the holes, they may not solder well. Solder will need to flow through the gap between the pin and the hole barrel. If there is not enough space to allow enough solder mass to flow through the hole, the circuit board will absorb heat from the molten solder and cause the solder to solidify partway up the hole. This is called a cold solder joint and can result in a premature failure of your circuit.

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Connect the Dots: New Landing Design to Reduce Thermal Pad Failure

11-16-2018

You’ve finally finished your design. All the traces are correct and the IC landings are to the manufacturer’s specifications. A short run of test boards performs perfectly. For best results, you select a reputable domestic board house for production and a quality assembly shop to do the soldering. When the finished boards arrive, everything looks great. You’re in high spirits and congratulate yourself on a job well done. Then the reports start coming in.

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