Catching Up with FineLine Global
When I found out about FineLine Global I could not wait to have a talk with them. I have talked with a lot of companies over the past few years and some of them were brokers, but none of them had the global reach or diversity of this company. With locations all over the world and technology offerings covering all technologies, I wanted to see for myself what this “broker on steroids” was all about—how they got started and how they grew. So I was delighted to have a conversation with Eli Ikan, Fineline Global’s General Manager.
Dan: Eli, thanks for giving me the opportunity to learn more about your company.
Eli: My pleasure, Dan, we also love to tell people about our company.
Dan: Okay, let’s do just that. First, tell me a little bit about the history of the company.
Eli: FineLine GmBH was founded in Germany in 1991 and Aviv PCB & Technologies was founded in Israel in 2002. In 2007, Aviv PCB acquired FineLine in Germany and the joint company has grown since by establishing subsidiaries and acquiring similar companies. This was all put together by Mr. Benny Kremer who today is the president of FineLine Global Ltd.
The plan was to grow and provide a one-stop shop for PCB sourcing from China. As China became the global center for PCB manufacturing, FineLine provided a value-added service in managing the supply chain in China for its customers. FineLine enabled its customers to source all their PCB demands from one source, with local service.
Our motto has been "4As: Any Technology, Any Quantity, Any Time, Anywhere.” FineLine was one of the first suppliers to break the paradigm that manufacturing in China is only for large mass production and supplied quick turn and small quantities from China.
Dan: Can you tell me about your supplier relationships and how that works?
Eli: Our policy is to create true partnerships with our suppliers. We see the long-term relationships and stability as a key to assure the service to our customers. We work together with our suppliers to overcome any challenges encountered. This means working together on continuous improvement plans, supporting them in expanding capacity and technological capabilities, negotiating the commercial terms when market conditions change, and sometimes extending financial support. FineLine has a stable supply base. We do not switch suppliers often. We add suppliers when we need to support the increasing demand or add new technological capabilities.
Fineline's team in China is responsible for managing our relationship with the suppliers. This includes:
- Quality audits to approve the supplier initially and periodic audits
- Managing the commercial terms
- Follow-up on the suppliers' capacity utilization and updating FineLine
- Daily follow-up on the WIP status, assessing any concerns for delays and expediting deliveries
- Managing delivery and quality problems
Dan: How you work with customers?
Eli: Fineline offers a variety of value-added services. For each customer, we try to understand from the customer what he perceives as added value. This enables us to tailor the service solution for the customer. Primarily we try to understand the profile of the customer's PCB demand, technology, batch sizes, quantities, lead times etc. Then we assess the customer's internal strengths and where he needs more support, engineering, DFM, coordination etc. Based on this, we can match the right suppliers and the work process with the customer.
FineLine provides local service to its customers. While we may rely on our global resources to execute the service, the communication with the customer on all levels is done locally, with local customer service and engineering personnel. We believe that this makes it easier for the customer to communicate its needs and concerns. Each customer is assigned a contact in our office, but we encourage our customers to contact our engineers and technology experts directly as needed and we encourage flexibility. While this may pose some challenges in managing an organization of over 300 people, we believe that flexibility and ease of doing business is an added value by itself.
Dan: One of the things that interests me about your company is that you are a truly global company. Please talk about that and the advantages of being global.
Eli: Look Dan, we live in a global economy. Many of our customers have subsidiaries or branches in different countries and almost all of them at least sell and/or buy and outsource production abroad. Our global presence allows us to give a flexible service to meet the customers’ needs. We can support the designers with advice and prototypes in one country and support mass production when production is outsourced to another country. We can assist our customers' sourcing teams and quality teams to manage coordination and quality issues that are far away. We can help our customers to transfer operations globally. With a central IT system (software and database) and FineLine teams in various countries, we provide a global service with a local flavor.
Dan: Where are your locations?
Eli: We have subsidiaries in Germany, Netherlands, France, Spain, UK, Sweden, Israel, Italy, USA, Switzerland and, of course, China. Then we have representatives in Poland, Romania, Bulgaria, Turkey, India, Brazil, Slovenia, Finland and may others.
Dan: Let’s switch over to your vendor base now, Eli. What kind of vendors do you deal with?
Eli: We work with different vendors that were selected based on the following guidelines:
- Full coverage of the demand we have in terms of technology, capacity, and lead time.
Usually each vendor is focused on a part of the market in both technological capability and in terms of manufacturing batch sizes.
- Quality. All vendors must meet FineLine's (and our customers') quality requirements.
- Management. We are looking for a management attitude that will match our business philosophy of long term partnership, desire to work together on continuous improvement and development, openness, and trust.
- Competitive pricing.
- Capacity. Vendor has ample capacity to become a meaningful vendor and FineLine’s portion of its turnover will not exceed 30%.
Dan: How do you find and qualify your vendors?
Eli: We have an excellent team in China led by Managing Director Danny Chen. Danny and his team are constantly surveying the PCB manufacturing scene in China, constantly keeping in touch with leading managers in the industry. FineLine is also 75% owned by China Fastprint, a leading PCB manufacturer in China, traded on the Shenzhen stock exchange. So, we trust that we are well-informed on the industry, future trends, and interesting players. FineLine has an excellent reputation in the PCB industry in China, based on our record of accomplishment in growth and our business practices. This allows us to choose the vendors we want to work with.
The qualification process involves an initial audit that covers an extensive quality and technology assessment. This audit is performed by our quality team in China and our CTO, Anan Zreik. Anan has extensive experience in PCB manufacturing. We are applying his expertise to assess the supplier's capabilities and to assist our suppliers in enhancing their capabilities. Capacity review and commercial negotiations follow the quality and technology assessment. Based on these assessments, we qualify the supplier to the niche which we see fit, in terms of technology, business sectors (i.e., medical, automotive, etc.) batch size and lead time.
Dan: And now, one of the reasons you and I are talking is that you are beginning an initiative in North America. What is your plan?
Eli: We will establish a network of sales agents and representatives and offer our services in North America. We are confident that, with our supply base, technical expertise and business processes, we can offer added value to customers in North America. We want to be a leading provider of PCBs in North America, as we are in Europe. We feel strongly that North America can only profit from an additional competitor that brings a strong supply base with strong service capabilities. The printed circuit board market is a mature market. We don't think there is anyone that needs a PCB and can't source it without FineLine. But we do offer a good service and value added.
Dan: And I assume that you can provide your customers with just about all technologies and services, is that correct?
Eli: Yes of course, that’s what we pride ourselves on. There are a couple of things we do not cover now and one of those is of course ITAR and Mil-Spec, but our goal will be to collaborate with some U.S. shops and bring them on as vendors so that we can complete our North American PCB solutions offering. But overall, I estimate that the market that FineLine will address in North America is similar to the rest of the world. The overall North American market demand might be very different than the demand in China, but the portion of the market that we address as FineLine (or similar companies) is the same.
Dan: What do you think is the single most important factor that has made FineLine Global so successful?
Eli: I think that most important is our company culture which is based on openness and trust. We encourage our teams to be bold and welcome challenges and be creative. We give our subsidiaries extensive freedom to practice business in the way it is done locally. This allows us to have less bureaucracy, be more flexible, have a shorter decision process, and adapt quicker to market demand. We always look for vendors who share a similar culture and managing a relationship built on trust extends our flexibility as well. Beyond that, FineLine has:
- True local service for customers
- Excellent technology expertise, based on manufacturing veterans
- Excellent IT infrastructure that can support global operations with ease of sharing information
We see our association (ownership) with Fastprint as another unique advantage. People mistakenly think that being owned by a manufacturer, we are mainly representing and selling them. This is not the case. Fastprint is not competing on the entire range of our demand and even where they are, FineLine has full flexibility to source from whichever vendor suits the needs. However this relationship with a leading manufacturer opens many doors to us in terms of industry relationships, trust and respect, and insight to the PCB industry in China and its future trends.
Dan: What types of companies as customers are you best suited to work for?
Eli: All companies that need a partner to manage a supply chain in PCB and do not want to incur the cost of internal resources that will be required to do so. This includes all aspects of the supplier relationship and they are extensive, considering the nature of PCBs. They are built to spec and an essential part of any electronics design. Failure may have a cost much higher than the cost of the PCB itself. Customers that have a PCB demand that varies (in terms of technology, batch size, lead time) will need to engage multiple suppliers and doing it internally will be much more difficult. These will see more value in the services FineLine provides.
Dan: Back to your entry into the North American market. Are there any challenges you anticipate?
Eli: The main challenge in starting up, in any new market, is building the first level trust, getting a chance to prove ourselves. I believe that once we start, we can demonstrate our capability and commitment. The best proof is that we maintain business relationships with our customers for many years. In 2016, over 60% of our organic growth (revenue $) came from our long-term customers.
Dan: Where do you want to be in five years?
Eli: We would like to continue to grow as we have since our inception. The PCB market is mature and growing at a slow rate (3%-5%, depending on who is forecasting). Competition will intensify. Being excellent in everything we do is the only way to continue and prosper. A five-year forecast is a prophecy in our dynamic world. FineLine is focused on perfecting its service, being attentive to its customers and adapting to the changes.
Dan: What do you consider good service?
Eli: Good service to me is when we meet or exceed our customers' expectations. A better service is one that opens new opportunities for the customers and enables them to improve their performance and succeed in their own. Different customers are looking for different things, depending on their internal resources, their strategy, and their experience with similar services. Our challenge is to understand the customer's fundamental needs and try and present it with the best PCB sourcing strategy we can.
Dan: Well, Eli, as we wrap this up do you have any last comments?
Eli: Just that we look forward to entering the North American market and going to work with those customers, helping them with all their PCB needs.
Dan: Well said. Thanks for spending the time with me today.
Eli: My pleasure Dan. I enjoyed it.
