IPC President John Mitchell on the Past, Present, and Future, Part 1

Estimated reading time: 18 minutes

IPC FIVE KEY MEASURES

Mitchell: We have five measures that we get reviewed with by the board. Obviously, there are business measures. We have two in that area. The primary one is, did we hit our budget? And that's in terms of the net. This year we have a budget to break even. Of every dollar that we bring in basically we're spending it to serve the industry. We had that same goal last year and we did a good job. We met that budget.

The previous two years, the board strategically invested in the industry. IPC ran a budget deficit during that time. We were making investments in various things that we thought would help the industry, and the Board approved that. They're willing to have IPC go out there and do that.

Matties: How did those investments pay off?

Mitchell: Some of them are programs like CQI (Certification Quality Initiative), which we think is paying off very, very nicely for the industry. We’ve improved the quality of the certification testing, bringing it up to a modern online testing format. We were using paper tests, and we knew there were people not abiding by the rules. The new system gives us analytics. We can sit there and say, “Patty happened to teach a class and her whole class struggled on this one module on the test.” We can reach back out to the teacher and say, “You might look at how you're teaching this because they're struggling in that portion of the test.” We could never do that before.

Matties: You get good feedback.

Mitchell: We get good feedback. Additionally, if, for example, 76% of the people on a particular question are missing it, either there's a problem with the question or we're not covering it in the materials. We can then improve the whole process in that way. We get some great analytics we've never been able to see before. That's been an investment that we feel has really panned out.

Similarly, we're investing in Validation Services, which is a little slower going because it takes a while for industry-wide acceptance. Regardless, we keep moving forward. We're looking for increased OEM buy-in to ensure the benefits are felt everywhere.

Matties: This is a tough area to get buy-in from, isn't it?

Mitchell: It is, and it’s tough because the whole goal of any program that we launch is to reduce the overall burden on the industry. If it's costing people more to do this and the overall return is down, we don’t even do the program. The idea of validation is that some people will say, “It’s just another audit and we hate the word audit,” but I used it so forgive me. That's how a lot of board shops and assembly shops may view it, but we're trying to work with the OEMs and say, “If we do this, and you're coming in four times a year for four days each, can we cut that in half?”

If they sign up for that, now suddenly they've got six OEMs coming in, and if all of them cut it in half and we only have to come in ourselves and do it, now everybody’s saving money. OEMs are going less, so it saves them money. EMS companies, in that case, have less down time because if they're doing ours and the OEMs are checking the box, they are there only half the time. Those are the ideas that we're trying to implement, but it takes some time on some of these.

Generally stated, if customer audits can be reduced and supplier downtime can be reduced while maintaining, or even improving quality, IPC owes it to the industry to strive to bring those advantages from theory to reality. That is what Validation Services is striving to do.

Matties: How do you take a program like that and put the line in and say we're going to continue or kill it? Is there a critical measure on that?

Mitchell: We're asked that by the Board. How long are you going to invest in this before you say it’s either been accepted or not? Let me use the example of the certification program. It took a decade for it to really get accepted. We're willing to take the long road on some of these things. Other programs, we're trying to find ways to accelerate because we think the benefits are there. We put a little bit more “oomph” on it, but really in this industry, if you find the OEMs will accept something, it's pretty much done.

When your customer says, “Do this because it's going to save us money and save you money, but you have to take the longer view.” That's a tough thing, so we try to present longer view solutions because saving money this year is nice. Saving this money over the next three decades…now, that's really nice.

Matties: One of the key measures is budget. What are the other four?

Mitchell: One we call standards influence. It’s the propagation and utilization of standards, and that includes standards as documents, as well as standards in certification programs. We even include events like this one where we're doing standards participation. That’s a very complex thing to measure, so we actually just measure that in dollars that the industry spends on it. That’s where our revenue ties into that.

Another one is membership growth. We measure that by how many new members we have.

Matties: Interestingly, I recently conducted an interview with Phil Carmichael [IPC president of Greater China] and was learning about the increase in members in Asia and China…which is significant growth in a very short time.

Mitchell: I think he's close to 800 members now in all of Asia. Just in China, he's doubled the membership in the last couple of years.

Matties: What about Europe and the Americas?

Mitchell: Overall, the trend is up. Globally we are continuing to grow, which is great. We’re growing faster outside of the U.S. than inside of the U.S. because it’s newer. We've got a good base here in the U.S.

Matties: But you're going to plateau at some point?

Mitchell: I think at some point, yes, but I think that point is something like 50 years down the road.

Matties: We take the long view here at IPC (laughs).

Mitchell: I'm not worried about it (laughing). There are a lot of opportunities for us to show the value of IPC membership and IPC standards, etc., to lots of organizations, and to show them how by becoming members they can enhance their financial success and operational excellence. That's the mission.

Matties: I can't see that growth going on here in America.

Mitchell: No, it’ll shift though and change. We’ve had a consolidation of PCBs, right, so you now have very few companies compared to 20 years ago. We might see that happen in EMS in the U.S. You never know.

Goldman: But they aren’t all members, by a long shot.

Mitchell: No, right now only 50% of the PCB companies in the U.S. are members, about 150 out of the 300 or so PCB companies are IPC members.

Goldman: How can you reach those other 50%?

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