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NCAB Group on Supply Chain Issues
March 15, 2019 | Nolan Johnson, I-Connect007Estimated reading time: 4 minutes

Wayne Antal, a key account manager with NCAB Group, discusses supply chain issues, the effect he sees on PCB fabrication channels, and how his customers are adapting to the new business dynamics. This is part one of a two-part conversation with Antal. Look for part two next month.
Nolan Johnson: Today, I’m speaking with Wayne Antal from NCAB. Wayne, could you introduce yourself and describe what NCAB is doing in the industry?
Wayne Antal: I’ve been with NCAB Group for about five years now. My industry experience goes back into the ‘80s just coming out of high school. I joined the military to start electronics training. After getting out of the military, I started working for various contract manufacturers and OEM companies. Before, I worked with CMs mostly as a program manager, and then in the last five years, I’ve gone to circuit boards only at NCAB. My time with NCAB being a key manager is an outside sales position, but I don’t consider myself a prototypical salesperson; I’m more of a problem solver. The circuit board is the key component towards any electronics build; it’s the platform that everything starts and moves forward from. From that standpoint, finding out what the customer’s needs are is the main avenue we use to create a value-add within our customer base, and maybe it will pick me up some new customers.
Johnson: NCAB has seen a lot of success lately.
Antal: That’s right. We’ve unlocked success. Our best customers are the most informed customers who know what they’re looking for, especially the newer customers that I have; they come to me knowing what they want, what our capabilities are, they’ve done their homework, and they understand what the value-add is, which are always the best customers to have.
Johnson: As you talk to people—buyers, procurement, your front line people at customer sites, etc.—what are some of the issues that they’re dissatisfied within electronics manufacturing and procurement?
Antal: Right now, the component lead times are tremendous, and that’s what I’m hearing across the industry. Of course, associated with that is increased pricing, and the tariff situation does not help on top of that. What I’m seeing is that the industry is always very skeptical on increasing capacity especially if they don’t think it’s going to last. The swell in component purchases is going to last. That’s the number one concern I hear—how long the lead times are on certain components that were traditionally off-the-shelf components. Now, there are tremendous lead times and a tightening of supplies throughout the industry on what my customers would consider standard components.
Johnson: I would have to think that when a buyer is trying to put together a finished assembly and the component lead times are now pushing up into the high double-digit weeks, that could affect scheduling for PCB fabrication as well.
Antal: What you see is very volatile purchases where you’ll get standard purchases from a particular circuit board for the first six months of the year, and as the component issues tighten up, you start to see it become more sporadic. They might order every other month or every three months, or order three and four times the quantity because they have to catch up, and then holds or pull-ins. A lot of that depends on the type of customer that you have. Some of the OEM customers don’t mind pulling in the whole volume of a board, whereas the contract manufacturers may not want to hold the inventory. You see that swell of a pinch in the contract manufacturers especially on the component lead-time side because they must. I do not envy them. I have one component and the circuit board, and they have an entire BOM that they have to come up with and try to find. It has been increasingly difficult to have it completed on a regular basis.
Johnson: For some of the sporadic work—especially the rush jobs that you run into—is it the trend that customers have been struggling to find some key components? Suddenly, they’ve been able to source those parts. Do they push through as many boards as they can simply because they have parts right now?
Antal: Yes. They find them in alternate sources. They will find components, and all of a sudden, they will break loose and will have tremendous months. For example, this month was a pretty good month for me. People are trying to head off the tariffs and Chinese New Year delays on circuit boards in January so they’re getting their orders in before the end of the year. I have a double barrel here going on from a purchasing standpoint. However, previous months—such as October—were tremendous. There was large, pent-up purchasing and a clog in the system that released from my customers at that time frame where the orders shot through the roof for us. From my understanding, what has happened in the industry is each of the OEM customers, etc., had to decide where they were going to build and sell their product, so they don’t get overleveraged on tariffs. Basically, they end up paying tariffs for products that are not going to be sold in the United States. Thus, they had to do a calculation to find out if it’s cheaper to bring in the piece parts or the assembly into the U.S., and what percentage of their product was sold in the U.S. Before that, they held off on their purchasing. As we entered the third quarter, that started to release, and orders increased greatly.
To read the full article, which appeared in the January 2019 issue of PCB007 Magazine, click here.
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