Interview

Despite the crisis, we keep production deadlines of five to ten days

We have already written about the situation with materials for the production of printed circuit boards on this blog. Today, we look at the whole story once again – through the spectacle of numbers, delivery times and economic prospects. “The situation on the market for materials and their supplies is currently incredibly bad. The “lead time” for basic materials such as prepregs or cores was, by default, fourteen days. From February this year, however, we are actually registering a constant change for the worse. At first the time shifted to four to five weeks, a month later it was six to seven weeks for prepregs and thirteen weeks for basic materials. In May, we were informed that they were forced to extend the delivery time for prepregs to eleven weeks and twenty to twenty-one weeks for basic material. Our standard established practice, when we order material and have it in stock within fourteen days, basically changed to five months. It is common now that the delivery terms are confirmed for November. But, having reacted in March with an increase in the stock minima, we are covering up lead time without major delays”, says Radim Vítek, production manager at Gatema PCB.

How did you react to the situation?

By quickly making stock resources. In this case, it was not a normal purchase, but more or less an investment. If you want to increase storage capacity by 350%, you simply need to have the funds for it. We know that smaller companies can't afford this – and that's why they postpone delivery times to customers until they receive the material. That didn't happen to us. For our standard production, we can meet deadlines of five to ten days.

Your hallmark is the speed and express production of small prototype orders. Has this focus proved to be an advantage in the current crisis?

Keeping up speed in times when you are waiting for material or parts for many weeks is quite a difficult commitment. But we still didn't have to step aside. Focusing on smaller orders helped us. So far, we haven't had to move the deadlines significantly. It's a little different for non-standard boards, where we are one of the few companies that can handle it technologically today. We had to postpone some deadlines for them, but clients in this case usually reckon with time consuming factor.

How hard is it to turn down clients who would cover your production for a few months in advance?

You have to put emotions aside and decide according to reason. Clients come who want from us large batches of “hundreds of different pieces”, not just prototypes. But it is more important for us to help traditional customers. For us, it would be a great order, which would be enough for a month, and we would not have to do anything, but in this case, we would have to limit all existing customers, and we do not want that. There is so much work to choose from. But first and foremost, we want to be the same, reliable partner for our existing customers. In addition, large orders have the problem of vacuuming up stockpile material more quickly.

What is missing today? Materials or components?

The problem starts with the basic materials. There are no plastics, there is not enough copper, there are no resins, there are no fibres. That's where it all starts. Two factories in China that were able to make 600,000 square meters a month, which are suddenly non-existent, burned down and there is no substitute for them. We try to negotiate intensively with our existing suppliers, but even they are not able to supply us with enough basic material. We are also looking for various alternatives, we are actively trying to fight. The situation is serious for us as well. We have always kept stock for at least a month, today we keep stock for four to five months. It's a big fight for every board and for every order we have to consider whether to take it or not.

Do you already see the end of the crisis?

We estimate that the situation could improve by the end of this year.

How has the crisis affected your prices?

Of course, the increase in the price of basic materials has already manifested itself in our country. If suppliers raise price with each invoice, you need to respond in some way. But we try to keep traditional customers and what we do for them. In order to be able to do it just as well and during the same period of time. We once decided that we wanted to be the most reliable supplier of standard printed circuit boards. Our commitment to always stick to the best materials is related to it. It is not that, as a result of the situation, we start choosing cheaper or worse alternatives. There is no way to choose non-certified no-name material. They are more available on the market, but so far the situation is still solvable, so we reject this option. We still do what we've always done. We meet deadlines and we can make quality boards. Today we are in a situation where it is not a question of whether someone is more expensive or cheaper, but if anyone can make it at all.

Who are your typical new customers?

Last year we were helped by foreign customers, this year the Czech ones are holding us. They grow steadily. There is one major effect. The missing material is most noticeable for the cheapest standard boards. Therefore, customers are much more likely to consider whether not to make one more sophisticated instead of a few simple. Each of the customers is trying to move forward. We see a change in the fact that customers are looking for new orders and new jobs.

What about the rigid-flex and flex technology that you added to your standard offering earlier this year?

The growth is relatively fast. We produce them on a weekly basis and receive inquiries from many other companies. We are also prepared for higher volumes of orders, because despite the usual gradual increase in new technologies, the current shortage of materials, including plastics and polyimides, can significantly accelerate this onset.

Care to know more on the subject?
Connect with our specialists
Luděk Buchta
Marketing Manager