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With an impressive array of investments on display, both in terms of technology and software, as well as its 120 employees, ASC offers a diversified product mix. Publisher Barry Matties and members of the I-Connect007 team recently took a tour of the American Standard Circuits facility in West Chicago, Illinois. In this interview, Anaya Vardya shares their strategies and the challenges the market faces.
Barry Matties: Anaya, it was great to meet your team; they are very nice people.
Anaya Vardya: Thanks, Barry. We are really proud of the team we have at ASC. We spent a lot of time and energy putting this team together. We've looked for the best of the best and people that can serve our customers. At the end of the day, our focus is on being easy to do business with. We want to make sure everyone at ASC is customer centric.
Matties: That came across as I was talking to your people. Everything was about the customers, doing it right, on-time, etc.
Vardya: Right. It's on-time quality at a good value. We are not necessarily the lowest priced company on the block, but what we believe in is providing the customer great value and service. Our people are easy to talk to and easy to communicate with, so we make the customer's life very easy.
Matties: You've been in business since ‘88. That’s coming up on 30 years. Time goes by fast.
Vardya: It does go by fast. We started out 28 years ago in Libertyville, Illinois, and the company started with four people. We have grown from a small company that could barely do double-sided circuit boards to doing some very complex kinds of boards today. We build a wide diversity of circuit boards including flex, rigid-flex, and RF/microwave PCBs. We build all kinds of metal-back boards. We even have patents associated with building metal-back boards. Along with all of this we also build a large volume of digital PCBs. Within the last couple of years we have grown our flex and rigid-flex business dramatically.
Matties: So from market conditions today, what's the biggest challenge to being a circuit board fabricator?
Vardya: I think the greatest challenge of being a circuit board fabricator is the shrinking industry in North America. Unfortunately, it reduces our ability to hire people. Not a lot of young people want to come into our industry. It’s really hard to find engineers and professional people that want to work in the printed circuit board industry. It's just not as sexy as it used to be many years ago.
Matties: Was it ever really sexy? (Laughs)
Vardya: Well it used to be a lot of fun once upon a time, right? Some 20 to 30 years ago people were actually excited to be in this industry. There was a lot of money being made and a lot of evolving technology and it was good for a lot of people. Today, finding people is one of the biggest challenges. The other challenge is our supplier base. As the industry shrinks in North America, it's harder to get suppliers to be able to support you, because everybody is running lean. The margins in North America have been really taken down over the last few years and unfortunately what that means is that there isn't a lot of money to do many of the things that we would have liked to do. That’s also how ASC is different.
Matties: As I learned from your team, a lot of the OEMs don't have the R&D around circuit boards. You are talking about the diminishing supply base, which is also a diminishing R&D source. So the impetus for R&D really is created for a factory like American Standard.
Vardya: I would agree with that Barry. Basically what I am seeing is that a lot of our customers don't really have an R&D team. What we are focused on is creating experts in the different areas of circuit boards that we support. We have an expert in R&D, one in flex/rigid-flex, and another in RF microwave. Our concept is to have an expert in all the areas that we serve and we’re work on replicating this model in additional fields.
We want our experts to be your experts.That's integral to our long-term strategy and our long-term success. At the end of the day, it's not just about building a circuit board. We believe that we provide solutions to the marketplace. Part of our solution is the R&D component.
Matties: You are building circuit boards, but beyond that you are building relationships based on thought knowledge, which is incredibly valuable.
Vardya: Yes. Many of our customers call us when they are in the design phase because they've had so many good experiences with us. For example, in the RF microwave sector, there's a lot of stack-ups that just won't work, even though in theory they might be possible. We work with these customers right in the design phase and guide them on stack-ups. Some of them want to do castellation, some of them want cavities, some of them want metal-backs in different forms. We really do spend a lot of time guiding them the whole time with a focus on streamlined/mainstream manufacturability. At the end of the day, custom designs are just that—custom. We strive to create designs that are lower risk with high reproducibility at reasonable cost.
The other thing that we notice is a lot of designers historically have built and designed a lot of digital circuit boards. The experience base of building flex and rigid-flex circuit boards isn't as much. Some of the design features and rules to build are very different and these are things that customers need to be aware of when they are designing rigid-flex boards. We work with our customers on the different things they need to do. If they come in with a preliminary design we might tell them “Okay, this is probably not going to work. We recommend you do A, B or C.” We really focus on providing that value-add.
Matties: The value of the relationship you mentioned earlier. You are not the cheapest, but there is a lot of pricing pressure on board fabricators. How do you get past that?
Vardya: We work at being competitive at the end of the day. There are a lot of circuit board shops and a lot of different customers. Different customers have different needs. If a customer is only interested in price we also have offshore solutions for these customers. If some of our customers want low price, we do work with them on buying boards from China, providing a value-add service. It's not going to be the same as if you wanted to go out and buy a board directly from China because we are managing the whole process. We have employees in China who work with us. We are doing the phone calls at night as opposed to our customers. We get paid for that service but many times we’ve been able to provide more cost-effective solutions coming out of China.
Matties: China is the easy answer to this, but when you are looking at work here, sometimes you just have to turn it away and say that doesn't make sense. It’s like shipping a $20 bill with every board, yet I witnessed a number of fabricators taking this path to stay busy. Maybe in the perfect process world, if everything goes exactly right, they will break even, but how often does it go exactly right?
Vardya: That doesn't happen very often. At the end of the day you always need to have a contingency plan when you are building circuit boards.
Matties: That kind of mentality sort of erodes our industry.
Vardya: That's correct. I think that's the mentality that's caused printed circuit boards to be viewed as a commodity item. Sometimes I even have people with very high technology boards that want to go away for a nickel on a board. At some point you just have to say, “That's fine, we cannot afford to do it, but if somebody else can, so be it.” Some factories are a little bit more efficient on some products than others. We run a very diversified mix, so our story is a little different than a focused factory.
Matties: You shared with me you spend a lot of resource, a half-million to a million dollars a year, on new technology. Walking through your shop I saw LDIs and inkjets for the solder masks or legends and such, sputtering machines, via fills, you've really invested in technology. What's the strategy behind all of that?
Vardya: Our belief is that long term, to survive in North America, we have to continue to grow in technology. While we are not afraid to make the investments in terms of equipment, we need to make sure we don't lose sight of our investments in people. Because at the end of the day, it is relatively easy to make a capital investment. It might be painful, but it's an easy decision to make. The hard part is really getting the right people in place to actually manage all this technology. A lot of people get caught up in the idea that they can buy an LDI or a new via fill machine and all their problems will get fixed. That's not really true. You also need the people that can manage it. You need people who can communicate effectively with customers and make sure the designs come in suited to efficiently utilize the capability of these newer technologies.