Mil/Aero Markets: Foreign Military Sales - Back to the Future for Sales Opportunities

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Against a backdrop of depressed U.S. economic conditions across all industry sectors and a pullback in funding needed to grow our businesses since at least 2009, coupled with the offshoring of many circuit manufacturing opportunities, these are truly challenging times to operate a U.S.-based printed circuit board manufacturing or electronics contract manufacturing operation.

Over the past decade, the military/aerospace sector has transitioned from a period of accelerated DX-rated contract manufacturing in support of our country’s multiple war efforts to a post-war period. We are currently in the midst of the attendant phased pull-out of troops, and have warily watched our inconsistent and at times recalcitrant Congress paralyzed by inaction. Those of us doing business in this sector have also navigated government funding shutdowns and tried to optimize our operations in advance of the looming indiscriminate sequestration defense budget cuts. Alas, we have now been presented with a $1 trillion omnibus spending bill that largely negates those cuts near term, and in fact provides funding greater than the Pentagon’s sequestered budget request. Like me, your initial response may bring to mind the ubiquitous text response, “WTH?” But I would like to explore the current military circuit board business environment in a slightly more mature fashion and pose a key question for us all to consider.

As business executives, how do we operate, navigate, and manage a military/aerospace-oriented circuit board shop or CEM operation in such an unstable and unpredictable environment?

The lifeblood of any circuit board or CEM, or any business for that matter, is a predictable and profitable sales backlog. Key to capturing and maintaining mil/aero customer and program opportunities, and thus providing a stable backlog that provides an opportunity to plan and to grow, is fully understanding the mil/aero market and the status of customers and their programs at a very intimate level. Equally important is to understand the DoD funding associated with each of the programs you support.

Read the full column here.

Editor's Note: This column originally appeared in the March 2014 issue of The PCB Magazine.


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