Your PCB Vendor Is Dropping You. What Do You Do Next?

Congratulations. You’ve been dumped by a supplier.

The It’s Not You, It’s Us email may sound polite, but the message is unmistakable: The printed circuit board supplier no longer wants your business.

Maybe the factory is discontinuing a technology, raising its minimum order requirements or exiting the market. Maybe volumes have declined, the product mix has become too complicated or the orders no longer fit the vendor’s preferred manufacturing profile. Whatever the reason, active part numbers, customer commitments and production schedules now depend on a supplier that is moving on.

Before searching for a replacement, determine exactly why the supplier made the decision.

Does the decision apply specifically to the company, or is the supplier leaving an entire market or technology segment? Does low volume, excessive quoting, payment history, engineering revisions, quality disputes or an unfavorable product mix drive the decision? Has the factory changed ownership, equipment or strategic direction? Is it eliminating certain materials, surface finishes, layer counts or compliance requirements?

The answer matters because the same problem may follow the business to the next supplier.

If the orders are too small for a high-volume factory, another high-volume factory will probably reach the same conclusion. If frequent revisions and incomplete documentation create excessive engineering work, changing suppliers will not fix the underlying issue. If the board has quietly moved beyond the vendor’s comfortable capability range, the company needs a supplier suited to the board as it exists today – not as it appeared when first quoted.

A direct call to the sales representative offers the best way to find out. Skip the email and make the call. Ask what specifically drove the decision. A candid explanation provides useful intelligence, even if it is uncomfortable, and will help determine the criteria for potential suppliers.

Establish how much transition time remains. Request information covering every affected part number, open order, work-in-process lot and forecast requirement.

Then ask the departing supplier about transition options:

• Will it accept a final purchase order or last-time buy?
• Will it complete current work in process?
• Can it accelerate open releases?
• Can it provide the approved production stackup, material list and relevant quality records?
• Can it provide a short extension while the company qualifies a replacement source?

Do not assume that tooling, test fixtures or manufacturing data can simply transfer to another supplier. Establish exactly what is available and what the replacement supplier must recreate.

A last-time buy can provide breathing room. But avoid ordering blindly. Consider product shelf life, forecast reliability, design revisions and the storage requirements of the selected surface finish. Emergency inventory only provides value if it remains usable.

Unfortunately, many companies discover during a supplier transition that they lack a complete, current PCB manufacturing package.

The departing vendor may have built the boards from a collection of Gerber files, email approvals, engineering notes and undocumented exceptions accumulated over several years. The drawing may specify a laminate that the supplier no longer uses. The impedance table may not match the production stackup. An engineer may have approved a material substitution in an email that no one can find.

The outgoing supplier should provide as much detailed information and assistance as possible to facilitate a smooth transition of work to another vendor, especially when the supplier initiated the business change that requires the company to find a new source for its boards.

Ideally, the company already uses more than one supplier. However, resist the temptation to simply move the business to another supplier on the approved vendor list (AVL) and consider the problem solved. As the departing vendor sends the data packages, distribute them for quotes not only to existing vendors but also to other suppliers seeking the business. The company should leverage its vendor base rather than allow vendors to gain disproportionate control.

Quoting only incumbent suppliers gives them greater confidence to raise prices. Every serious PCB buyer needs a robust vendor bench. For example, two qualified production sources could handle 60% of the volume, while two “quote-ready” vendors remain active with the remaining 40% of spend.

Quoting is not betrayal. Quoting is governance. Even when an incumbent supplier steps up after another supplier exits, competing suppliers should remain part of the quoting process. Here’s why:

• It validates current market pricing (Governance).
• It keeps the incumbent sharp (Strategy).
• It identifies a better fit in price, lead time or technology without forcing the outcome (Discovery).

Do not use a challenger’s quote simply to drive down an incumbent’s price. That approach creates a “Last Look” culture in which suppliers have little incentive to provide their best price first. If the challenger wins on merit, award the purchase order accordingly. Then explain to the incumbent exactly why it lost the business. Few lessons carry more weight than a missed opportunity. Build a strong PCB supplier bench and use it to its fullest extent.

In today’s volatile market, with continually rising material costs, longer lead times and the real possibility of a supplier ending the relationship, relying on only one or two factories for a PCB portfolio creates unacceptable risk.

A vendor disengagement can serve as the catalyst for building a more innovative and resilient supply chain.

Suppliers do not drop customers out of malice. They do so because commercial considerations drive portfolio decisions, and a company may land in a column labeled “low margin.” Bitterness offers no useful lesson. Supply relationships are commercial arrangements that both parties continually reevaluate. Companies that emerge from a supplier exit intact do not rely on better luck. They already know what comes next.End of article content 

Greg Papandrew has more than 25 years’ experience selling PCBs directly for various fabricators and as the founder of a leading distributor. He is cofounder of DirectPCB (directpcb.com); greg@directpcb.com.