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Standard of Excellence: The Advantages of Working With Small PCB Businesses

For several large companies, especially those in the mil-aero industries, there are distinct and critical advantages to buying from officially designated small businesses. The official definition of a small business is one with fewer than 750 employees.

For unclear reasons, some companies have been less focused on these advantages than they used to be, so I thought it would be helpful to remind people of the advantages of working with these small businesses.

Buying from small business set-aside suppliers provides several advantages to large military defense electronics companies including:

Government compliance and incentives: Large companies are often required to meet certain procurement percentages from small businesses to comply with government regulations and obtain certain contracts. This compliance can also make them eligible for various incentives and benefits, which can help these large contractors win critical programs.

Lengthening the supply chain data: You have to start somewhere. No matter how large they are today, at one time, all companies were small. By working with small companies, we can ensure the supply chain remains vital and is kept alive. In the PCB industry, there has been much talk of late that our domestic shops cannot keep up with the specific needs of our military and aerospace contractors. There is even a serious movement to allow our large contractors to go offshore for mission-critical parts since they feel that cannot be supported within our borders. However, this is the very reason our contractors should not only buy from small businesses but also nurture them. If we are going to keep our critical and proprietary products built within our borders by American citizens—as ITAR regulates—then we must make sure that we are helping the up-and-coming businesses by buying from them.

Diverse supplier base: Engaging with small business suppliers enhances supplier diversity, leading to a more resilient and adaptable supply chain. Diversity in suppliers can also drive innovation and bring fresh perspectives.

Innovation and specialization: Small businesses often bring innovative solutions and specialized expertise to the table. They may focus on niche areas and develop cutting-edge technologies that can complement the larger companies’ offerings.

Cost-effectiveness: Small businesses can often provide more competitive pricing because of lower overhead costs and leaner operations. This can lead to cost savings for large companies.

Flexibility and responsiveness: Small businesses are typically more agile and can respond quickly to changing requirements or urgent needs. Their ability to provide customized solutions and quick turnaround times can be a significant advantage.

Community and economic support: Purchasing from small businesses supports local economies and communities. This can enhance a company's reputation and strengthen relationships with stakeholders, including government entities and the public.

Reduced risk and increased redundancy: Relying on a variety of suppliers, including small businesses, reduces the risk associated with supply chain disruptions. Having multiple sources for products and services ensures continuity in case of any issues with larger suppliers.

Access to set-aside programs: By partnering with small business set-aside suppliers, large companies can gain access to certain set-aside programs and opportunities that are exclusively available to small businesses, potentially benefiting from their specialized contracts and projects.

Enhanced innovation pipeline: Small businesses are often at the forefront of technological advancements. Partnering with them can provide large companies with early access to innovative technologies and products.

Corporate Social Responsibility: Supporting small businesses aligns with CSR goals by promoting entrepreneurship, fostering economic growth, and contributing to a sustainable business ecosystem. This can enhance the company's brand image and fulfill its social and ethical responsibilities.

Distinct advantages of working with small companies: Small companies are more flexible, easier to work with, and can provide personal attention, especially with new products. For example, a $100,000 order is almost insignificant to a billion-dollar contractor but means everything to a $10 million or under PCB fab house. Additionally, small businesses can devote the time and attention needed to being true partners in developing new and specific technology products and are often ready and willing to work side-by-side with a large defense contractor on a new product. I know from personal experience that mission-critical programs like the Lantern and Tomahawk PCBs were built by shops with less than $10 million a year in revenue.

By leveraging these advantages, large military defense electronics companies can enhance their competitiveness, drive innovation, and build a more robust and sustainable supply chain. It is the American way of doing things.

I hope this column serves as a reminder to our large defense, military, and aerospace contractors to seek out and take advantage of small business set-aside companies.

Anaya Vardya is president and CEO of American Standard Circuits; co-author of The Printed Circuit Designer’s Guide to… Fundamentals of RF/Microwave PCBs and Flex and Rigid-Flex Fundamentals. He is the author of The Printed Circuit Designer's Guide to... DFM Essentials, Thermal Management: A Fabricator's Perspective and The Companion Guide to Flex and Rigid-Flex Fundamentals .Visit I-007eBooks.com to download these and other free, educational titles.