Beyond the price tag: why total cost of ownership (TCO) is crucial when buying PCBs
When purchasing PCBs for your electronic products, it's tempting to focus solely on the price tag. After all, in today's competitive landscape, cost reduction is a top priority for most procurement teams. However, as Hamza Bilgen, expert at Bosch copperdot service’s sales and business development team points out, "The unit price is just the tip of the iceberg. There are many other factors that contribute to the total cost of ownership."
To truly optimize your PCB procurement and get the best value for your spend, you need to look at the full picture. This means considering not just the cost of the PCB itself, but all the associated expenses throughout the product lifecycle – from initial design and manufacturer selection over logistics to quality management and risk mitigation. "It's about finding the optimal balance between time, cost and quality," explains Bilgen.
Design and material selection matters
Cost optimization begins early in the design and industrialization phase of the PCB. Decisions made here, such as the number of layers, material selection, and panel layout, can significantly influence the final price. “While standard FR4 remains the most cost-effective solution for many applications, special requirements, such as for high-frequency and radar applications, may necessitate the use of specialized and more expensive materials. However, there are significant cost differences even within base materials. A targeted selection can impact up to 20% of the total cost,” says Bilgen. Other essential cost factors include copper thickness, surface finish, and via types, which depend on the PCB’s end application.
Logistics and supply chain management
In addition, the cost of logistics can significantly impact the TCO of PCBs. This includes shipping, handling, and warehousing fees, which can vary greatly depending on the manufacturer’s location and the efficiency of their logistics operations. copperdot leverages Bosch’s extensive supply chain network to manage these aspects effectively, ensuring reliable and cost-efficient delivery of PCBs.
The hidden costs of manufacturer management
Another often overlooked expense is the time and effort required to find, evaluate, and manage the right PCB manufacturers. With so many options out there, it can quickly become overwhelming. "Selecting the best-fit manufacturer is already a form of cost reduction," asserts Bilgen. "Every manufacturer has their most competitive technology, even within rigid PCBs. Different manufacturers excel in different layer counts or surface finishes, and have optimal order volumes." He emphasizes the importance of industry-specific expertise: "For example, if you go to a white goods manufacturer for an automotive industry PCB, you might pay less initially. However, you'll almost certainly face quality issues because their requirements are typically lower." Bilgen adds, "At copperdot, we fully utilize our extensive manufacturer network to effectively match each project with the most suitable manufacturer. This ensures you're not compromising on quality, lead times, or cost-efficiency."
On top of selection, there are many other hidden supply chain management costs to factor in, such as audits, qualifications, quality control, and problem-solving visits. Bilgen shares an example: "A typical manufacturer audit takes 4-5 days total, not including preparation and OPL follow up – that's thousands of dollars in labor if you had to do it yourself. But this preventative action is critical to avoid expensive quality issues down the line."
In the end, achieving the optimal total cost of ownership for your PCBs is about taking a holistic, long-term view.
Quality issues can be catastrophic
Speaking of quality, this is one area where you don't want to cut corners. While testing and controls add initial cost, skimping here is unreasonable. "The cost of quality issues increases exponentially the later they are caught," warns Bilgen. "A failure detected by your end customer could mean massive warranty claims, product recalls, and damage to your brand reputation. That's a cost you can't put a price tag on."
So what's the solution? According to Bilgen, you need a strategic partner that can help you optimize all the levers of PCB procurement, from design to delivery. That's where Bosch's copperdot service comes in. "With copperdot, our customers gain access to Bosch's reliable supply chain and quality management expertise. We take care of all the behind-the-scenes work to secure the best price, quality and delivery terms. You get all the cost benefits with none of the headaches."
In the end, achieving the optimal total cost of ownership for your PCBs is about taking a holistic, long-term view. By partnering with a service like copperdot who can help you navigate all the complexities, you'll be in a better position to drive cost efficiency without compromising quality or time-to-market. As Bilgen sums it up: "With the budget you save, you can invest more in what matters most – innovation and growth for your business."
Would you like to learn more about PCB cost drivers? Have a look at our guide to smart procurement.
Our team will be happy to advise you on any of the aforementioned topics and share our knowledge and expertise to ensure functionality, usability, and reliability combined with efficient and stable manufacturability.
