Author Archives: Robert Simon

  1. What Is the Difference Between PCB and PCBA?

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    PCB and PCBA are two very different concepts, but many people use the terms interchangeably. While these terms are related and both used regularly within the electronics industry, they have distinct definitions. In this article, we’ll discuss what PCBs and PCBAs are, how they are related, and the key differences between the two terms so you can use them both confidently when placing orders and describing products.

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    An image of a bare printed circuit board (PCB)

    What Is PCB?

    PCBs serve as a mechanical foundation in which various electrical components can be mounted to complete the intended circuit. PCBs feature a conductive pattern and a substrate that is typically made of epoxy resin material. Some of the most common types of printed circuit boards include:

    • Single-layer
    • Multi-layer
    • Rigid
    • Flexible
    • Rigid-flex

    With all of these different types available, manufacturers and product designers can create a diverse array of electronic displays, standalone devices, and more for consumer, commercial, and industrial applications.

    An image of a printed circuit board assembly (PCBA).

    What Is PCBA?

    PCBA is the complete electronic assembly and relates to how the components are placed onto the PCB. More specifically, it refers to the process of passing the PCB through Surface Mounted Technology (SMT) and Plated Through Hole (PTH) processes to place and solder the various electrical components onto the PCB.

    • During this assembly process, product builders mount the electronic components into holes running through either the whole board or just specific layers. The holes have conductive pads to ensure the flow of electricity is not interrupted.
    • During this assembly process, the components are not mounted through holes. Instead, they are mounted onto the surface layer with pins along the conductive pads.

    PCBAs are fitted will all necessary components and are ready to be used for their intended purpose.

    Differences Between PCB and PCBA

    As a simple way to keep the two terms straight, think of a PCB as the inert, unfinished foundation of a circuit and a PCBA as the complete product with active and passive components. PCBs are just the boards of substrate layers themselves that can support electronic components. The boards have conductive pads and tracks, etched features, and other details in the non-conductive layers, but they don’t yet have all the components. PCBAs are PCBs with solder paste and electronic components on the surface, and they are plug-in ready.

    An infographic depicting the differences between PCB and PCB assemblies

    Printed Circuit Boards From USTEK

    While PCBA refers to the finished, fully assembled board with all the electrical components it needs to perform, PCB only refers the bare circuit board that is used as the foundation for all of the electrical components. These terms are often used interchangeably, so understanding the differences between the two is crucial.

    At USTEK Incorporated, we specialize in the design and construction from single-layer to multi-layer PCBs for a wide range of industries. We can work with you to create a custom solution for your needs no matter how complex. To learn more about our custom PCB capabilities, contact us today.

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  2. A Primer on the Types of Printed Circuit Boards

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    Are you designing a new electronic device or upgrading an existing one? If so, chances are you’ll need printed circuit boards (PCBs). The self-contained boards mechanically support and electrically connect electrical and electronic components. The components are located on the surface of a non-conducting board (i.e., the substrate) and soldered to printed circuits (i.e., small layers of conductive material deposited on one or more sides of the substrate). When designed and manufactured properly, PCBs help ensure the device assembly in which they are installed operates and performs as intended.

    PCBs come in many variations, each of which is suitable for different electronic applications. Below, we highlight and discuss the various types that are available.

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    Single-Sided PCBs

    A single sided printed circuit board

    Single-sided PCBs have a single layer of substrate with components and circuitry on only one side. They are the easiest and cheapest type of PCB to design and manufacture. As such, they are commonly produced in high volumes. Typical applications include simpler circuits, such as relays, sensors, and electronic toys.

    Double-Sided PCBs

    Double-sided PCBs have components and circuitry on both sides of the substrate. Holes in the substrate allow for connections between circuits on different sides. Connections can be formed using one of two methods: through-hole or surface mount technology (SMT). The former involves feeding small wires (i.e., leads) through the holes and soldering the ends to the necessary components/circuit, while the latter involves soldering small leads directly to the substrate. Since the design and manufacture of these PCBs are more involved than single-sided ones, they are typically used for more complex circuits, such as amplifiers, mobile phones, power monitoring systems, and test equipment.

    Multilayer PCBs

    Multilayer PCBs have three or more conductive layers—one on top, one on bottom, and at least one sandwiched between non-conductive substrate layers. They allow for greater design flexibility in a smaller and lighter package. Due to their elevated cost compared to single-sided and double-sided PCBs, they are typically used for high-speed circuit applications rather than simpler and less critical circuit applications.

    Flex PCBs

    Flex PCBs can be single-sided, double-sided, or multilayer. In any case, they have flexible substrates, which allow them to fit into tight or compact spaces where rigid boards cannot. The material can turn and shift without damaging the printed circuits. They help reduce board size and weight, making them ideal for use in applications that need high signal trace density.

    Rigid PCBs

    Rigid PCBs are also available in single-sided, double-sided, or multilayer variations. They have rigid substrates that prevent the board assembly from twisting and turning. Their compact size ensures the integration of complex circuitry, while their well-organized signal paths and clearly marked components make them easy to maintain and repair.

    A photo of a green rigid-flex printed circuit boardRigid-Flex PCBs

    Rigid-flex PCBs combine the qualities of rigid PCBs and flex PCBs. They consist of flexible circuits attached to rigid boards. By accommodating streamlined designs, they help reduce overall board weight and size. As a result, they are commonly used in automobiles, cellphones, digital cameras, pacemakers, and other electronic devices and systems with tight weight and size limitations.

    High-Frequency PCBs

    High-frequency PCBs are designed for use in frequency ranges of 500MHz to 2GHz. Typical applications include communication systems, microwaves, and microstrips. Depending on the application, they may require advanced laminate materials and controlled impedance capabilities.

    An infographic explaining the various types of PCBs

    Contact USTEK for Your PCB Needs Today!

    For PCBs you can trust, turn to the experts at USTEK! As a premier custom manufacturer of electrical and metal components with experience designing and constructing PCBs for various industries, we can work with you to develop a custom PCB solution that fully meets your needs. Whether you require basic, single-sided PCBs for simple circuits or complex, multilayer PCBs with high-frequency capabilities, we’ve got you covered. To learn more about our custom PCB capabilities and how we can serve you, contact us today.

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  3. A Sobering Look at Corona-19 Today

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    Yes, I know; you have been beaten nearly to death with data and statistics on the Corona-19 pandemic. This observation by a doc in the trenches (in NV) is somber and at least concerning if not downright frightening. You might not want to read it before you turn in for the night but you definitely should before stepping out your front door.

    Corona-19 Pandemic

    by Dr. Merritt Dunlap

    CURRENT COMMUNITY STATUS

    STATE OF NEVADA-getting about 2,000 cases daily.

    QUAD COUNTIES-getting 150-200 cases daily. Hospital almost full. Medical system getting very stressed.
    WASHOE COUNTY-getting about 500 cases daily. Hospitals very stressed and opening new units.

    NATION-over 200,000 new cases daily. Daily death rates at record levels.

    Not good all the way across the board. My office used to diagnose about 1 or 2 cases a week. We’re now diagnosing up to 5 a day. The state and county trends look like they may be starting to crest this wave but we’ll have to wait a week to see how this really plays out. Bottom line is that there’s a lot of virus out there, it’s transmitting all over the place and if you don’t want to join these statistics you simply can’t be in an enclosed space with someone without having a mask on.

    The good news is that monoclonal antibody treatment is now available (although in limited supplies). For the high risk patients, I can order this treatment (for the time being). The limited number of patients I’ve treated with it reported feeling much better within 48 hours with no side effects. It’s not a failsafe but it’s definitely a step in the right direction.

    VACCINES
    Before I start about the vaccines I need to make something very clear: There are no risk free choices for you. If you choose not to get a vaccine, you are simply choosing the risk of getting COVID-19, continuing with the status quo and everything that goes with both. If you choose to get a vaccine you are choosing the known (and theoretical) risks that go with the vaccine. I’ll talk more about how to make a choice that’s right for you in future communications.

    QUICK COVID-19 REFRESHER
    I want to remind you about the actual disease of COVID-19. Overall infection mortality rate appears to be about 0.3-0.5% (roughly 3-5 times higher than the flu). However, this doesn’t mean YOUR mortality rate is 0.3-0.5%. That’s the OVERALL rate (it includes all the young folks and low risk folks). If you’re over 65 or have other medical conditions, your mortality rate is definitely higher. What scares me, personally, about this infection is the chance for long-term medical issues that comes with the infection. This is being called “Long COVID” or “Long-Haulers”. This is NOT trivial. 15-20% of people who get COVID-19 end up with this, even if they only had a mild infection. Remember, this virus causes a high tendency to form blood clots and get vasculitis (inflammation of the blood vessels). These patients have persisting problems with shortness of breath, debilitating fatigue, heart problems (myocarditis or cardiomyopathy), neurologic problems and a variety of other issues. Further, we don’t know (and can’t predict) who might end up with this and I can tell you from dealing with patients and friends who have this that it’s no joke. So when you think about making a decision for yourself, make sure you’re not just considering the overall mortality rate. Make sure you’re factoring in ALL the information. The whole enchilada as they say. You need to think very carefully and take all these things into consideration. Also remember, we’ve known from the beginning that a vaccine was our way out of this but it only works if people take it. One other little fun factoid I recently learned: Humans have never, in the history of mankind, eradicated a virus through natural herd immunity. Doesn’t happen. The only way we humans have been able to eradicate an infectious disease is through a vaccine.

    PFIZER & MODERNA mRNA VACCINES (I’ll talk about other vaccines as we get more information on them)
    BASICS
    Ok. As I’m sure you’re all aware, the first 2 vaccines on the block are the mRNA vaccines from Pfizer and Moderna. We anticipate that these will be going into arms by the 3rd week of December. These vaccines were developed with a technology in which a small piece of messenger RNA (essentially the blueprint for a protein) is delivered via a tiny lipid particle (nanoparticle) into your shoulder muscle. This technology has been nearly 20 years in the making but this is it’s first real test. Once inside the cytoplasm (outside the nucleus) of the muscle cells, your body uses its own machinery to manufacture spike proteins and your immune system goes after those spike proteins and creates immunizing antibodies. This is a different way to present spike proteins to your immune system. Historically, we would have inactivated a virus and given it to you or we would give you actual parts of a virus (like the spike proteins). This is how most vaccines have historically been made.

    This time, we’re not giving you any part of the virus at all—just the instructions for your own body to make a piece of the virus. Because you’re not getting any virus at all, the vaccine cannot give you COVID-19. Additionally, it’s important to understand that mRNA doesn’t interact with your own DNA (your genes) in any way (the mRNA never even gets into the nucleus of the cell where your DNA resides). mRNA is very fragile and has a short lifespan (hence the very cold storage requirements of mRNA vaccines). After your body uses the mRNA for a little while, the mRNA degrades and is digested by your cells. Incidentally, reading mRNA and disposing of it is a natural process and is happening constantly in our bodies.THAT WAS FAST!

    Yes it was (kind of). This technology has been in the works for nearly 20 years, starting with SARS-CoV (the original) in 2002 and then with MERS in 2012. Those vaccines never made it to fruition, primarily because the virus died out, interest died out and then the money died out. However, we had the platform and the knowledge about the virus so that when SARS-CoV-2 showed up we were ready to roll with this technology. Then, along came the US Government which completely took the financial risk out of development allowing the science & trials to proceed unfettered. Put it all together and we’re witnessing one of the greatest scientific achievements in human history. This is not an exaggeration. Vaccines typically take 15-20 years and $1Billion+ to get to market (much of that money and time is spent trying to get to a Phase 3 trial). This one made it from concept to market in 11 months! Amazing.

    Doing a Phase 3 trial is the critical piece in developing a working vaccine. The years and money to get to a phase 3 trial is what usually slows the process. With these vaccines, no corners have been cut. In fact, FDA Commissioner Stephen Hahn, despite tremendous political pressure to release data before the November 3 elections, stood firm that nothing would be done or announced until the trials had proceeded as designed and the data had been properly reviewed. In other words, no one has be permitted to interfere with the proper processes & procedures.

    EFFICACY
    Does it work? So far, when you put both Phase 3 trials together, over 35,000 people have received the actual vaccines starting in late July of this year. The efficacy results have been nothing short of remarkable. Fewer than 6% of all those in the trials who got infected were vaccinated. And those who did get COVID-19 despite vaccination only had mild illness. Thus far in human history, of the myriad of vaccines that have been developed over the past century, there have only been 3 that reached a 90% efficacy level—the new shingles vaccine, the small pox vaccine and the measles vaccine. If this efficacy holds up, this would put these vaccines among the most elite ever developed. There are certainly still questions to be answered, but the preliminary data are very encouraging. There are lots of questions I, personally, have about efficacy in various populations of people but the data will not be out for public consumption until December 8th. I’ll certainly keep you posted.

    SAFETY (DOES THE BENEFIT OUTWEIGH THE RISK?)
    Biggest question on people’s minds. Is it safe? Have we studied it long enough? I think the answer to both is yes and here’s why I say that: In the history of vaccine development there has never been a serious side effect that has not been recognized within 6 weeks of using the vaccine. We have not seen any serious side effect from these vaccines and we’ve been watching 35,000 people for almost 5 months now. With that said, 35,000 is not 35 million. There may be a rare serious adverse event post approval and I think we need to stay humble about the initial amazing data on these vaccines. There are systems in place (as with any vaccine) that will pick these up and will continue to monitor patients for years to come. In addition, by the time most folks are getting a vaccine there will probably be an additional 20 million people (likely their doctors) vaccinated so they can see what happened to them as well. There is certainly no “Absolute Safety” and there never can be. Again, the question you face is which risk are you more willing to accept given the situation & information you have? I have no doubt that at some point in the next year there will be a situation where a person develops some type of horrible medical condition at some point after they’ve been vaccinated and you can bet your bottom dollar that the media will be all over it. However, the vaccine will only prevent what happens from SARS-CoV-2, not everything else in life. There are lots of little nuance questions I have regarding safety but, again, I’ll let you know after I see the raw data on 12/8.

    HOW LONG WILL IMMUNITY LAST?
    I don’t know. No one know. Only time will tell. However, we can make some educated guesses. Typically, the shorter the incubation period of a virus, the shorter the immunity from a vaccine for it lasts. SARS-CoV-2 is a medium incubation time virus (about 6 days on average). Flu is about 1-2 days and measles is about 10-14 days. We need a flu shot annually and we often get lifelong immunity from a measles vaccine. Therefore, it would be reasonable to guess that the immunity from a SARS-CoV-2 vaccine would last in the range of years rather than the range of decades. Again, only time will tell. By the way, it’s common (normal really) to require booster doses of most vaccines so even if we found it only lasted a few years, that would be considered normal.

    WHEN WILL IT BE HERE AND WHEN/HOW CAN I GET IT?
    The FDA is meeting on December 10. The states are gearing up to start administering the vaccines to Tier 1 recipients in the 3rd week of December. The CDC’s Advisory Committee on Immunization Practices (ACIP) put out guidance for states on who should be in Tier 1 on December 1st. It will be front line health care workers and the staff and residents of Long Term Care Facilities. Nevada has adopted this recommendation. It’s anticipated that Nevada will get about 165,000 doses of Pfizer vaccine this month but there are about 175,000 Nevadans in Tier 1. You can do the math. As production is ramped up further and distribution is optimized, we will continue moving through the various tiers getting people immunized in that order.

    If you want to see how the State put together the 4 tiers, go to this link: https://nvhealthresponse.nv.gov/wp-content/uploads/2020/12/NEVADA-COVID-19-VACCINE-PLAYBOOK-VERSION-2.0.pdf and look at pages 21-24. We anticipate that between Pfizer and Moderna, millions of doses will be rolling out as soon as they get the go ahead from the FDA and will continue for as long as it takes. The nice thing about mRNA vaccines is that they don’t have to be grown in cells or culture media which takes a lot of time. They can be mass manufactured by machines so I’m optimistic that supplies will stay strong. There were some recent media headlines (take any corporate media information with a big grain of salt – they have agendas) about Pfizer having problems getting raw materials but that wasn’t for the mRNA, it was for the lipid delivery particle and I’ve been told that the delay has been resolved. Moderna has not had this issue to date.

    Both mRNA vaccines are two shot series. The Pfizer vaccine is given 21 days apart. The Moderna vaccine is given 28 days apart. Excellent antibody responses are typically observed about 7 days after the 2nd dose. Additionally, you can’t mix them. If you start with Pfizer your 2nd dose must be Pfizer and vice versa. The Pfizer vaccine presents some unique challenges with regard to storage and transport. It needs to be kept at -70 Celcius (-94F). Therefore, anyone who gets a Pfizer vaccine will be required to go to a specific site (a hub) that has super-cold freezing capacity. There’s only one in Carson City and a couple in Reno. This will limit how much and how quickly we can administer that vaccine. It creates a bottle neck. The Moderna vaccine can be stored in a normal freezer so I anticipate this will be the one being given more commonly once it’s released. No word yet on when that will be or when those doses will be coming to my office but I’ll keep you informed. It’s anticipated that on a national level we’ll be vaccinating about 5 million people weekly once this gets rolling (barring any major hiccups in the process, obviously).

    FINAL COMMENTS
    I know this doesn’t answer nearly all your questions (nor did I expect it would) but I’m getting tired of writing and I’m sure you’re getting tired of reading (if you’ve made it this far 😊). I will address the other vaccines as we get more information. I’ll also be notifying you of upcoming Zoom meetings I’ll be having to answer questions and I’ll do follow up emails on this topic. I’ll try my best to keep you informed so you can make the decisions that are best for you and your families.

    As I mentioned, the FDA is meeting on December 10 regarding the Pfizer vaccine and again on December 17 regarding the Moderna vaccine. I anticipate both of these vaccines will receive an EUA. Despite all of the nonsense perpetrated by our states and the federal government through this pandemic I have absolute faith in the integrity of the people & process for testing and evaluating these vaccines. Not only do I know that the people reviewing this are among the very best vaccine experts in the world but I know that if they get this wrong the entire future of vaccines and the credibility of the FDA with be irreparably damaged. They know it to.

    Finally, I have been asked several times if I’m going to take the vaccine. Barring any major surprises after I review the raw data on December 8th, the answer is an emphatic YES. Without hesitation.

  4. Workplace Safety Against Corona-19

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    Healthcare authorities, from the international WHO to individual countries to our cities and states all agree that social distancing and anti-viral masks reduce the risk of infection with Corona-19.  USTEK responded to the need for PPE masks and employing our partners in production and logistics we now stock and ship these critically needed supplies.

    For details and ordering Click_Here

    KN95 Mask

    KN95 Mask

    Disposable Surgical Style Mask

    Disposable surgical-style mask

     

  5. How will REACH compliance affect your business?

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    Danger Poison

    If you manufacture or even just sell products in the US you already must comply with pertinent EPA and FDA regulations.  And if you ship to California your have their list of known and suspect materials that must be reported.  For those of us dealing with a global marketplace the RoHS directive was proposed in 2002 and became a major factor in 2006 but it dealt with only six hazardous material found in the electrical industry.

    On its heels was the broad REACH directive with its 848 pages and initial listing of 143,000 chemicals.  Of these a subgroup called SVHC (substances of very high concern) was published in 2011 and these 173 materials are under even stricter scrutiny. How does this affect you, the direct or indirect user/consumer?  You need to know exactly what is in the products that you ship to the EU – no “proprietary protected formulation” exclusions apply.  You must state whether or not your materials are in compliance and if a material is not registered then the rule of law is “no data, no market”.

    For an article published today by ThomasNet
    click here -> REACH – ThomasNet

  6. Still considering off-shoring?

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    Changing economics move contract assembly to North America

    In which direction are the economies of electronic production pushing the choice of manufacturing location? What is the history of the situation and assumptions? And when is it time to re-evaluate those assumptions?

    In the 1950’s and 60’s many US and other Western companies moved manufacturing to Japan, where labor was cheap and factories were being rebuilt using enormous investments from the US and our allies. The Japanese quality was initially poor but rapidly improved and Japan became a real economic powerhouse. Along with this increased sophistication came increased cost, and western companies began the move to Korea where again, investment poured in after the Korean ceasefire.

    The Koreans started out mindful of the Japanese experience and emphasized quality early on. This made Korea a better source for electronic assemblies but their smaller population (25 million Koreans vs 95 million Japanese in 1960) caused rapidly increasing labor costs. Next stop – Taiwan.

    The very western-leaning government in Taipei combined with a large educated class in the workforce made Taiwan an easy fit for American companies. This writer’s personal experience working there was much like Bayonne or Bayport: the Taiwanese had a funny accent but followed the same Yankee Doodle drummer leading to escalating sophistication, profits, and cost. However by the turn of the 21st century even Taiwanese companies read the kanji on the wall and began to open subsidiaries in mainland China where land, building, and labor were cheap and often subsidized.

    These lower costs coupled with the loosening governmental control in mainland China made for fertile ground where companies could expect to grow quickly and to dramatically cut costs. There was a scarcity of university-educated engineers and experienced managers, so most startups were not Chinese based but rather staffed and managed by Japanese, Koreans, and the entrepreneurial Taiwanese.

    Part of the competitive nature of the Chinese model was based on low manufacturing costs, where human labor was usually more cost-effective than automation. This meant start-up capital was low but also meant that quality was more difficult to control. When output varied because of the human interface, the parts not-to-specification were simply culled out during inspection and discarded or sometimes just ignored as being “close enough”.

    As the world market demanded increased quality the producers in China invested in more automation and higher caliber staff with increased training and product flow responsibility. Inevitably costs began an upward climb. The price of fuel increased globally and with it the cost to ship to their customers half-way around the globe, so the competitive nature of China began to decrease.

    China has historically undervalued their currency, promoted low labor cost, and subsidized raw materials and energy costs in an effort to develop a mushrooming industrial base. This has been effective and even in the face of rising costs China’s role in the world economy has grown at the expense of other nations. There seemed to be no stopping their growth.

    The international economic playing field has never been level as each country erected duties on inexpensive imports that ate away at the ability of their domestic manufacturers to grow and develop. A second tool used to give home-grown industries a boost has been subsidies (often farm products) and government sweetheart contracts (the aerospace industry). Any effort by an industrialized country to harmonize trade with developing countries has received resistance and threats of suits in international courts. The “balance of trade” has been a key measurement, contrasting imports from and exports to specific trading partners. However even when the numbers pointed to a disparity there was little a country could do to level the playing field. Then came the tariffs.

    Tariffs are a double-edged sword, protecting targeted industries while adding to the cost of living for the population in general. The goal is usually to make them last long enough to spur domestic protection and short enough to avoid a dramatic increase in the cost of living or an outright shortage of certain goods.

    Trade Balances

    China’s largest export market is the US, and they export to the US five times the amount that they import from the US. The Chinese trade with the EU is more balanced but still far in Chinese favor.

    The Chinese economic growth plan is based on maintaining and even increasing this advantage, but that could hold true only if their trading partners were willing to accept the status quo at the expense of their domestic industries. Tariffs are one way to force a short-term rectification of the imbalance.

    The US has imposed punitive tariffs on a wide range of raw materials and finished goods from simple metal extrusions to sophisticated electronics. Ten per cent has grown to 25%, and $50 billion in goods to $300 billion in goods, nearly every product imported. The short-term effect is already being seen with American companies sourcing to other low-cost regions or moving production back to the US. As China struggles with lower output their cost to produce is rising, reducing their cost advantage against other countries. Headlines are already reporting that China may have missed its opportunity to grow into an economic giant. Bad for them does not necessarily mean good for us, but it does mean that American companies have decisions to make in the next few years. Electronics assembly production is a prime example of an industry in transition. Will we go to other LCR and repeat this scenario or will we re-shore?

    The North American sources for contract assembly, having watched their markets shrinking away, are seeing a ray of hope: they could compete on the world stage and indeed win the economic struggle not only against the historical competitors but also against any of the new smaller (Vietnam, Thailand) and potentially larger (Brazil, India) low cost regions.

    Let us review the actual history and trends in China, realize what has happened to the cost savings that were envisioned just a few years ago, and take heed

    The Supporting Data:

    Seven years ago the push to offshore contract assembly was at its peak, and with good reason. US demand was up and volumes were increasing. US labor and raw material costs had risen dramatically. Cheap knockoffs from Chinese companies were flooding the market. To compete the US companies chose to join them, not fight them, and began moving first simple subassemblies and then more complete products to LCRs (low cost regions) like China and Vietnam.

    We, the American consumer, cannot blame the US off-shoring companies. We wanted more and we wanted it cheaper. We accepted lower quality because ours was a throw-away society – use it for a while and when it breaks just buy a cheap replacement. We went from buying just the most basic components off-shore to buying completed goods, all made in the world’s LCR.

    Today however that tide is turning. The change in currency exchange alone has made this a different world. The US dollars just do not buy as much off-shore as it used to.

    The environmental mantra of “reduce, reuse, recycle” has taken hold. Americans are willing to pay a bit more for things of a higher quality that might last longer. Would we pay double? Probably not. So where is that tipping point and how close to it are we? When should producers in this hemisphere investigate on-shore contract assembly?   Let’s look first at recent changes in cost in the Pacific Rim.

    • Chinese labor costs have doubled and are expected to rise another 50% in 4-5 years.
    • Chinese currency is more expensive: it had been over 8¥/$, and is now <7¥/$.
    • The cost of shipping products has increased, some rates by 43%, others by more.

    If you left our shores for contract assembly in the Far East, and you then saved one-half of your production cost, how much of that savings remains today? 15%? 10%? Less??? Even just 10% might be a reason to let the business remain there because after all, why incur an avoidable cost increase? Are there issues that must be considered in addition? The answers might be in the less obvious areas.

    Doing business around the world has obvious hurdles, like language. There are also less obvious obstacles like business mindset and ethics. We in the West have standards that differ even on a single continent. We should not be surprised to discover that there is a greater difference between cultures with less history in common. That is not to say that one is better than the other, only that they are different and must be taken into account in negotiations and daily business transactions.

    World Presence

    What are other practical issues that impact an OEM’s business when considering off-vs-on shoring?

    • Should you invest in an overseas (Vietnam, India, Singapore) manufacturing scenario today if there are major aspects over which you have limited control, and there are forecasts of increasing economic pressure?
    • The 10 to 12 hour time difference: how easy is it to have a phone or video conference if one group is just arising while the other is getting ready for dinner? Is everyone really at the top of his game?
    • The 24 hour trip to have an on-site round table discussion. How many of your staff could you spare at the same time so as to make the meeting truly productive? And what happens back home while they are gone – it is still that 12 hour phone tag lag.
    • What is the background, ability, and availability of the LCR staff? Do they have the skillset that you are used to encountering?  Do they smile and nod because they agree or because they do not understand?
    • Are your quality standards something that they are just willing to accept or do they wholeheartedly embrace the concept? Are they committed to protect the product quality and hence the good name of their clients or would they walk away from a situation and just move on to another client from a different industry or different country. After all, their name is shielded from notoriety by secrecy agreements.
    • And speaking of secrecy, how is your intellectual property protected? Agreements for non-disclosure are easy to sign but difficult to enforce when the parties are separated by 8,000 miles, different legal systems, and centuries of tradition.

    Quantifying these non-monetary aspects is difficult but we know they exist. When do they, added to the direct cost, warrant moving your contract assembly back to North America?

    This question could be answered with the use of a super computer and the services of many an expensive consultant. Or you could bid your next job here and there, compare the economic results, factor in the ease of dealing locally, and make your first on-shore placement. You will not be the first in North America to make that change and you will certainly not be the last. If you would like a helping hand as you make your decision, just ask USTEK Incorporated – we have the experience!

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  7. Don’t Stock-up on Inventory!

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    Does your company’s stocking system look like your grandmother’s?

    Grandmother's Pantry

    One hundred years ago our great grandmothers stocked up for the winter by canning, pickling, and drying foods to last until spring.  Today we preserve mostly as a hobby and buy groceries and such only when we need them.  Why lay out the cash and fill up a pantry with items you will not need for months?  Instead buy what you need just in time to use it!

    Currently we are faced with the identical options in the electronics industry: buy large quantities for lower prices and safety stock benefits, or order only what is required to meet the production schedule.  The former ties up cash flow, fills floor space with unused goods, requires additional insurance, and mandates environmental controls.  The latter requires attention to scheduling lead time and often a higher price.

     

    How best to balance the advantages and disadvantages?  Is there a source with all the benefits and none of the losses?

    (I would not have written this if I did not already know the answer!)

    Yes indeed; you could

    •          cut your inventory cash investment by 50%+,
    •          Repurpose your inventory space for manufacturing,
    •          reduce your burden,
    •          respond faster to your customers’ demands,
    •          and still save money.

     

    At USTEK Inc. we calculate the customer’s price based on the annual volume.  Then we build a portion of that estimate ( typically 3 to 4 months ) and hold it in our Ohio stock for kanban/just-in-time requirements.  Releases received by 1 PM are shipped the same day.  Examples of the savings:

    A large 4-layer printed circuit board used in quantities of 100 pcs per run was priced at $18.22 each.  When this went on our kanban stocking program the customer’s price dropped to $13.80. This saved the them 24% in piece price and 90% in inventory expense.  A fabricated metal part had been quoted at $2.89 for a single 1500 piece order but dropped to only $1.22 for the 12k piece kanban release order.  Piece price savings of 58% and an inventory decrease of 87%.

    The cost reductions will vary with your component type and the volume – so send us your design files and specifications and we’ll get to work demonstrating your savings!

     

     

  8. Beyond RoHS

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    RoHSThe RoHS requirement came into being as a way to remove potentially hazardous materials from coming into contact with people and from entering the world ecology through improper disposal.  Beryllium (Be), cadmium (Cd), chromium (Cr), mercury (Hg), arsenic (As), and lead (Pb) are among the most common metals that bear discussion.  They have not nearly the lethal level of polonium (Po) which is deadly at less than a billionth of a gram, but because of the amount produced every year their use and disposal needs to be controlled.

    We in the chemicals industry have dealt with these metals and a host of other materials. As their hazardous nature became evident we have worked to minimize their use.  Asbestos served admirably as a heat insulator and a reinforcement for plastic and metal composites.  When asbestosis was researched that mineral’s use was rapidly curtailed and protective measure were implemented in its few remaining applications. 

    During the 19th century arsenic was used as an embalming fluid which Toxic Materialssubsequently polluted the ground and water supply near burial sites.  This has now been replaced by formaldehyde (which has its own issues). The bright cadmium yellow in plastics have been replaced by organic azo compounds.  Each time an issue was considered and proven, steps for amelioration were taken.

    Closer to our industry, the lead in our solder-flowed printed circuit boards has been replaced by formulations high in tin (Sn) with small additions of copper (Cu) or silver (Ag). Formulations that meet the RoHS regulations are today so common as to be considered as the standard build, with lead-containing PCBs now a special order.

    Still, with the widespread use of circuit boards at the end of their useful life we need to investigate methods of disposal that both reclaim the reusable constituents and minimize the toxic effects of the portion that must be discarded.

    Many ecology-oriented investigations are European as is a paper written in Italy by MariaEcology Paola Luda at the Dipartimento di Chimica IFM dell’Università di Torino. That paper on recycling PCBs was published by Intech Open who makes available works of over 100,000 authors on-line in a searchable database.

    Awareness of our ecology is not strictly the pervue of tree-huggers. They demonstrate; we solve problems.

    Attached here for your perusal is Luda’s paper.