Three Workforce Lessons from Manufacturing Plants Around the World

By John Mitchell, IPC president and CEO

The U.S. economy has remained surprisingly resilient, and the result has been that the country’s unemployment has continued to inch lower. It’s now at 3.5 percent, the lowest rate since 1969, and that rate could go even lower as the U.S. boasts more than 7 million job openings. Those job openings suggest an opportunity for workers but a tight labor market for employers. For the industry I represent, electronics manufacturing, talent and retention have always been top concerns, but the situation is worsening. Today, more than 60 percent of U.S. manufacturers say that an inability to find and retain skilled workers is constraining their growth and undermining their global competitiveness.

The same story is true around the world. During my latest international listening tour of manufacturing plants in France, Germany, India, Japan, Taiwan and Thailand, I noted again that the challenges faced in the United States extend beyond our borders. The good news is that, through shared experience, we can develop shared insights and solutions. In that vein, I’d like to offer the conclusions I’ve drawn from my meetings with operators and managers across the electronics industry about the current labor environment:

Lesson 1: An open-minded approach to hiring based on industry interest, not just skill, can result in new long-term talent

During the recruitment process, seeking out potential employees that hold genuine interest and passion for the industry even if they don’t yet pose the skills can provide a new source to fill long-term workforce gaps. It’s okay to hire an employee with minimal training – that’s where company education programs come in. In Japan, one manufacturing plant hires operators interested in the job without a background in the industry. The workers are trained with pay for a full year before joining the assembly line. Once thoroughly vetted and trained, operators have the avenue to move up through the ranks to become managers. Among the factory managers with whom I spoke, none of them had college-level training; their education was solely completed through intracompany training. As an added bonus the longevity and loyalty of this workforce is impressive, but more on that in Lesson 3. This model, used in some Japanese companies as well as others in Europe, underscores the point that we can find talent by embracing workers with little to no experience – but with industry passion – to build the worker pipeline. That is where the next key lesson comes in.

Lesson 2: Career progression is important to workers
Hiring is the first step, but companies need to keep thinking of new ways to keep employees engaged and motivated by prioritizing both their personal and professional growth. Job security and location to home remain pillars for workers within the industry. However, with a younger generation entering the workforce, convenience isn’t enough to retain workers. Workers want to know they have a career path they can build in their companies.

In Thailand, operators who lack a college education, along with management staff from top schools, can grow within their roles and continuously be promoted. The job culture there exposes workers early on to self-improvement paths that help them attain specific knowledge or capabilities. Having this type of transparency helps create trust among employees and companies, where the workers invest in the companies and the companies invest in the workers.

During my latest trip, I spoke with college-educated engineers who expressed appreciation for their companies’ focus on personal growth. One manager emphasized that it was during his time as a quality engineer that he learned how to meet his goals and prioritize learning additional skill areas, allowing him to become a senior production manager.

Lesson 3: Worker retention relies on effective workplace communication to maintain worker happiness
As I engage with workers and management, I’m always reminded that companies address and troubleshoot challenges in the workplace in a variety of ways, and how they do so impacts the employee experience. A successful environment champions collaboration to lessen the stress placed upon employees closest to the supply chain or any other production issues at hand. In Bangalore, India, I saw how deliberate and collaborative employee interaction could solve product processing challenges.

For more arduous job tasks, such as accommodating factory capacity, maintaining various product delivery schedules and facilitating cross-department collaboration, a company systemized procedure review. When they encounter an issue, operators stop the production process, brainstorm solutions, bring these potential solutions to a quality assurance team and then implement the changes through a management system in place, fostering a new type of learning environment with its people and collaborative problem-solving at the core. The success this brings isn’t just apparent through workers’ happiness and loyalty – their mantra of “zero defects,” helps ensure their products demonstrate the highest quality standards through their production process.

Conclusion: Lessons can be learned on a global stage to ensure company efficiencies and worker satisfaction for future growth
Seven million jobs unfilled is a staggering number, but U.S. economic growth and innovation hinges upon addressing this workforce need. Companies are stepping up through commitments to hire interested but untrained workers, employee initiatives geared toward career progression, and c-suite focus on finding ways to retain workers. These initiatives are helping to drive record growth in the electronics industry.

But the U.S. industry should take note of the lessons I saw around the world. For too long, countries have been resistant to learn lessons from others. But with our ever-shrinking globe and ever-expanding workforce, our neighbors have solutions that should be embraced.

U.S. Congress to Approve Funds for R&D on Lead-free Electronics in Aerospace, Defense and High-performance Applications

In a win for U.S. taxpayers, defense readiness, and the electronics industry supply chain, the U.S. House and Senate are poised this week to approve a defense spending bill that includes $5 million for research and development on the issues surrounding lead-free electronics in mission-critical applications.

IPC and dozens of its members and allies supported the request for these funds, which are included in the final version of the Fiscal 2020 defense appropriations bill, being voted upon in the U.S. Senate today. The House has already approved the spending package, and President Trump is expected to sign the measure within hours after its passage.

Over the last 15 years, the commercial electronics industry has largely phased out its use of lead (Pb) in the manufacture of electronic components and circuit assemblies, due to government regulations driven by lead’s harmful effects on human health and the environment. However, the aerospace, defense and high-performance (ADHP) electronics sectors have secured exceptions to these restrictions because there is not enough data to guarantee the reliability of lead-free components in ADHP applications.
The lead-free gap between commercial and defense electronics will only grow as lead-free becomes more entrenched in cutting-edge commercial technologies, and as governments – especially the European Commission – seek even more stringent rules on the use of lead.

“The migration of the commercial industry to lead-free electronics has introduced technical and supply-chain concerns in the aerospace, defense and high-performance sectors that can only be addressed through greater, more focused public-private R&D,” said Chris Mitchell, IPC vice president of global government relations. “The funds in this bill will help support the much-needed collective effort and help ensure that mission-critical systems have full access to cutting-edge electronics from a robust global supply chain.”

“Together with our partners in the Pb-Free Electronics Risk Management (PERM) Council, IPC will continue to advocate for a proactive, long-term approach to this issue,” Mitchell added.

IPC and its partners believe that a five-year, $40 million investment in a public-private R&D program would yield more than $100 million in U.S. defense savings per year and improve military readiness and overall innovation.

For more information, read this IPC Blog from April 2019.

U.S. Congress to Approve Funds for R&D on Lead-Free Electronics and Defense

By Chris Mitchell, vice president, global government relations

In a win for U.S. taxpayers, defense readiness, and the electronics industry supply chain, the U.S. House and Senate are poised this week to approve a defense spending bill that includes $5 million for research and development on the issues surrounding lead-free electronics in mission-critical applications. President Trump is expected to sign the measure within hours after its passage.

IPC and nearly 30 of its members and allies lobbied for these funds, which are “seed money” for a longer-term R&D effort. The need for these funds may be unfamiliar to the general public, but for the aerospace and defense industries, especially, this is a big deal.

Over the last 15 years, the commercial electronics industry has largely phased out its use of lead (Pb) in the manufacture of electronic components and circuit assemblies, due to lead’s harmful effects on human health and the environment. However, the aerospace, defense and high-performance (ADHP) electronics sectors have been reluctant to migrate to lead-free because there is not enough data on the reliability of lead-free components in such applications.

The lead-free gap between commercial and defense electronics will only grow as lead-free becomes more entrenched in cutting-edge commercial technologies, and as governments – especially the European Commission – seek even more stringent rules on the use of lead.

IPC believes a five-year, $40 million investment in a public-private R&D program would yield more than $100 million in U.S. defense savings per year and improve military readiness and overall innovation.

Together with our partners in the Pb-Free Electronics Risk Management (PERM) Council, comprised of experts from government, industry, academia, and other stakeholders, IPC will continue to advocate for a robust, long-term approach to this issue.

Read our April 2019 blog for even more background, and watch this space and IPC.org for updates.

Ceasefire Announced in U.S.-China Trade War

By Chris Mitchell, vice president, global government relations

On Friday, December 13, the United States and China announced they had struck a “phase one” deal that effectively pauses the trade war that has flared between the countries over the last two years.

The Trump administration says the deal “requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.” It also obligates China to make substantial purchases of U.S. goods and services and establishes a stronger dispute resolution process. In response, the U.S. has postponed new tariffs that were scheduled to go into effect on December 15 and cut the tariff rates on the most recent previous round. To learn more, check out the fact sheet produced by the U.S. Trade Representative.

IPC welcomed news of the “phase one” deal. As documented in a recent IPC study, many IPC members are feeling the pain of higher costs, supply chain disruptions, administrative hassles, and reduced access to valuable markets as a result of the U.S.-China trade war. IPC urged both countries to de-escalate the tensions, suspend the tariffs, and address longstanding disputes through both bilateral negotiations and multilateral dispute-settlement mechanisms.

With this context in mind, here are our top takeaways from last Friday’s announcement:

1. Much remains unclear about the substance of the deal. The text of the agreement won’t be released or signed until January at the earliest. Some critics have suggested that this announcement, like some before, may have been premature given the divergent manner in which U.S. and Chinese officials have characterized the deal.

2. China’s “structural reforms” largely reflect previously announced or enacted commitments. For example, China approved a new foreign investment regime outlawing forced technology transfer earlier this year. It was also months ago when it announced an opening of its financial services sector to spur new foreign investment; and it already pledged new currency commitments at the most recent G-20 summit. Even its intellectual property obligations are strikingly like IP regulations that have been in effect for a year.

3. We know too little about the agreement’s dispute-settlement provisions, which are key to ensuring that each party lives up to its commitments. The USTR says the agreement allows “the parties to resolve disputes in a fair and expeditious manner” and to take “proportionate responsive actions” they deem appropriate. This language sounds promising, but the devil is in the details.

4. China commits to step up its purchase of U.S. goods and services. Under the deal, China has agreed to import $200 billion more in U.S. goods and services over the next two years than it did in 2017. The agriculture sector is the largest single beneficiary; it expects China to purchase $32 billion more in goods and produce through 2021, though China has pushed back on including specific amounts for these purchases. The impact of these purchases on the electronics industry remains unclear. China’s commitment on this issue reflects President Trump’s emphasis on the bilateral trade balance.

5. The U.S. retained 25% tariffs on $250 billion in Chinese imports while canceling tariff hikes scheduled for December. The remaining tariffs disproportionately impact the electronics supply chain, so U.S. electronics manufacturers who import parts, components and materials from China won’t see much immediate relief. However, the tariffs instituted as part of list 4a have been cut from 15% to 7.5%. On the other hand, U.S. original equipment manufacturers dodged a bullet because the new tariffs that were scheduled to go into effect this week would have hit cell phones, laptops, and toys ahead during the holiday season. These products are largely engineered and designed in the U.S. but manufactured in China. For its part, China has agreed to forego new retaliatory duties including those slated for U.S. autos and auto parts.

6. It is not clear if or when negotiations on a “phase two” deal will commence. Initially, the Trump administration suggested that no date had been set but that they wouldn’t begin until after the President’s reelection. However, over the weekend, President Trump tweeted that negotiations would begin right away. The first order of business is finalizing and implementing the phase one deal, including the enforcement mechanisms. Many observers believe that as long as the phase one agreement is finalized in January and the Chinese appear to stand behind their new commitments, additional tariffs are not likely to be imposed in 2020.

7. Both the U.S. and China claim initial victory in a trade war that continues to inflict harm on both countries. The trade war has sapped growth from both economies, and the next round would have hurt both sides even more, so each had reason to strike a deal. In this phase one deal, China gave up very little, but President Trump has kept most tariffs in place and has accelerated the diversification of U.S. supply chains away from China. Meanwhile, he gives the economy more positive news going into an election year.

We at IPC will continue to monitor and report on developments associated with this trade deal, but please don’t hesitate to contact us if we can provide you more information about the impact of this deal on the electronics industry.

IPC Welcomes U.S.–China Phase One Deal

The following statement can be attributed to John Mitchell, IPC president and CEO:

“The electronics manufacturing industry welcomes the announcement that the United States and China have agreed to a “phase one” trade deal bolstering enforcement of China’s intellectual property laws and rolling back or postponing retaliatory tariffs on thousands of goods traded between them.

“As documented in a recent IPC study, many IPC members are feeling the pain of higher costs, supply chain disruptions, administrative hassles, and reduced access to valuable markets as a result of the U.S.-China trade war.

“We call on the governments of the United States and China to de-escalate the tariffs on both sides; focus on results at the negotiating table and conclude agreements that address long-standing issues of concern to both sides. We also call on all members of the World Trade Organization to restore that body’s ability to play its role as arbiter of international trade disputes, so that nations won’t feel a need to resort to tariffs to resolve disputes.”

Rising Tariffs Put a Painful Squeeze on Electronics Manufacturing

To determine the effects the U.S./China tariff dispute has on U.S. electronics manufacturers, IPC conducted a survey of its U.S. members. The results reflect how difficult it is for a global industry to navigate this uncertainty. IPC President and CEO John Mitchell provides details in his monthly IPC president’s message.

IMPACT Europe 2019: IPC Members Call for Pro-manufacturing Policies to Strengthen the Competitiveness of the European Electronics Value Chain

Representatives of electronics companies from across Europe gathered last week in Brussels to call on European policy makers to ensure the right policy and regulatory environment to stimulate innovation in the electronics value chain and boost its competitiveness in Europe.

Held annually, IMPACT Europe is our premier annual advocacy event in Brussels, giving IPC members the opportunity to engage directly with policy makers on key policy and legislative initiatives affecting their business. This year’s discussions focused on some of the most pressing challenges for the electronics industry: the future of EU industrial policy; planned changes to chemicals rules; expected activity on responsible sourcing of minerals; ongoing interest in addressing the skills gap; and new priorities in the area of international trade.

The event kicked off with a private roundtable and a reception at the European Parliament, where IPC members had the opportunity to speak with Members of the European Parliament Łukasz Kohut (Poland) and Dragoș Pîslaru (Romania) about the upcoming renewed Industrial Policy and Skills Agenda, both expected to be published by the Commission in March 2020. Attendees also heard from the Senior Policy Advisor of the Renew Europe group Joost Hermans about upcoming priorities in international trade, including the defense of multilateralism, the need for an agreement on digital trade, and the group’s support for ensuring that human rights and environmental provisions in free trade agreements are enforceable. IPC’s policy priorities for the new legislative term were shared by IPC CEO and President John Mitchell, as well as Carsten Salewski of Viscom and Chair of IPC’s European Government Relations Committee.

The next day started with a panel discussion on EU chemicals policy. Kelly Scanlon, IPC’s EHS policy and research director, highlighted the association’s investments in data collection and research to inform policy making. Two representatives of the European Commission – Elena Montani of its environmental department (DG Environment) and Gert Roebben of its industry and small business department (DG GROW) – discussed the much-anticipated European Green Deal and underscored the need for science-based rules and definitions, innovative financial schemes, public-private knowledge sharing, and educational initiatives. Raj Takhar of Assent Compliance gave the participants a sneak preview of a forthcoming IPC report on supply chain traceability regarding substances of concern. The report explores the need for a more holistic and consistent approach to identifying and reporting on chemicals use.

Felicia Stoica of DG GROW’s Advanced Engineering and Manufacturing Systems Unit then gave a keynote speech on the Commission’s plan to renew its over-arching industrial policy. The EU industrial policy is wide-ranging, covering trade, support for small and medium-sized enterprises, investment, innovation and public procurement; it is also intended to become an enabler for the European Green Deal. Convergence and synergies with the EU digital policy will also be maximized, including links to cybersecurity and artificial intelligence. IPC representatives stressed that every link in the European electronics manufacturing chain is fundamental building block in every EU industrial priority, and as such the industry’s strategic significance should be recognized and incorporated into planning.

During the last session, Zora Mincheva of the Commission’s DG TRADE presented the status of implementation of the EU Conflict Minerals Regulation. Chris Mitchell, IPC’s vice president of global government relations, shared two exciting developments at IPC on this issue. First, balloting was recently completed on revisions to IPC-1755, a data exchange standard; and earlier this year, IPC joined the European Partnership for Responsible Minerals (EPRM) as part of its continuing efforts to help IPC members navigate the complex challenge of responsible minerals sourcing. Julian Lageard of Intel and Ken Matthysen of International Peace and Information Service (IPIS) provided an update on the status of EPRM from the perspectives of supply chain actors and civil society.

Participating member companies included Apple, Assent Compliance, BAE Systems, Continental, Dell Technologies, MED-EL Elektromedizinische Geraete Gesellschaft, IBM, Intel Corporation, Panasonic, u-blox, and Viscom.

To all who participated, thank you for your active engagement and for helping to make this event a success! We will be in touch with follow-up activities.

To those of you who missed this opportunity but would like to learn more or become involved in IPC’s EU advocacy efforts, please contact Alison James, IPC’s senior director, Europe at AlisonJames@ipc.org.

View the photo galleries from IMPACT Europe Day One and Day Two.

In Memoriam – Bernie Kessler

It is with deep sadness that IPC announces the passing of electronics industry pioneer and IPC Hall of Famer, Bernard (Bernie) Kessler. Bernie passed away on December 2, 2019 at age 96.

Active in IPC for more than 50 years, Bernie served as IPC’s first chair of the Technical Activities Executive Council (TAEC). He earned an IPC President’s Award in 1966, was inducted into the IPC Hall of Fame in 1991 and was amongst the inaugural group to be awarded the Dieter Bergman IPC Fellowship Award in 2015.

Per longtime friend and colleague Gene Weiner, Weiner International Associates, “Bernie was an international industry legend and was friend and mentor to many. He combined his intellect with his amazing wit to educate and challenge his industry peers. We shall miss his presence.”

His energy, enthusiasm and valuable contributions to the industry will be missed by many. On behalf of the electronics industry, IPC offers its condolences to his family.

Technology Spotlight: How Semi-Additive Processes Enable Finer Circuit Features

By Tara Dunn, president, Omni PCB

Can you imagine the benefits of routing with a 25-micron trace and space? Just to name a few; complex pin outs would require fewer layers and a decrease in costly lamination cycles, the overall size of the PCB could be dramatically reduced, or conversely, additional electronics could be fit into an existing footprint. What if the 25-micron technology could be integrated into a stack-up with traditional subtractive etch technology? To spark that imagination, a 10-layer PCB, pushing traditional design limits requiring stacked or staggered micro vias and three lamination cycles, could use 25 micron trace and space on tight pin out layers, while keeping other layers as designed resulting in a reduction in overall size and thickness, a reduction to 8 layers and reduction to only one lamination cycle.

Semi-additive technology enables the fabrication of 25-micron line and space and below and can be integrated with traditional PCB fabrication processes. This ultra-high-density packaging and interconnect solution can reduce size and weight by 90% over current state of the art processes within the US, is shown to have significant RF advantages over traditional subtractive-etch processing and is opening up design possibilities that were previously unavailable.

Mike Vinson, Averatek Corporation, will speak at IPC’s APEX EXPO 2020 technical conference about a semi-additive PCB fabrication process that is currently being licensed to North American based PCB fabricators. His presentation, “Transitioning to Very High-Density Interconnect From Subtractive to A-SAP™,” will cover how this process is different than our traditional subtractive etch processes, how those differences enable the manufacture of these fine feature sizes and how this technology can benefit next generation electronics.

As a sneak peek, rather than creating the circuitry from a traditional copper clad laminate and etching the copper that is not required, this semi-additive process starts with the bare substrate and adds copper to create the circuitry. Starting with a very thin electroless copper layer rather than copper foil enables these fine feature sizes. Once the circuit image is created, electrolytic copper finishes the circuit plating. Because the initial electroless copper is so much thinner than any of the foil options, the flash etching to remove the unnecessary copper does not noticeably impact the circuit pattern. This process results in traces with horizontal sidewalls rather than trapezoidal in shape, realizing benefits in both size and RF properties. Once the circuit pattern is created, the circuit layers follow most of the traditional PCB fabrication processes.

You can learn more at the IPC APEX EXPO technical session Tuesday, February 4 at 1:30-3:00 pm and discuss this technology with a panel of experts at the interACTION session Tuesday, February 4 at 3:30-5:00 pm. For more information, visit www.ipcapexexpo.org.

ECHA Clarifies SCIP Database Reporting Requirements at Stakeholder Workshop in Helsinki

By Aidan Turnbull, managing director, BOMcheck; Kelly Scanlon, director, EHS policy and research, IPC

At a recent stakeholder workshop in Helsinki, Finland, the European Chemicals Agency (ECHA) shed more light on its upcoming Substances of Concern in Products (SCIP) Database and how IPC standards factor into it.

Starting January 5, 2021, all manufacturers will be required to report information into the new ECHA SCIP Database if their products include articles that contain REACH Candidate List substances above 0.1%. At the recent workshop, ECHA confirmed that a prototype database will be available in Q1 2020, which will enable companies to start getting used to it, and a production version, coming in October 2020, will enable companies to begin entering data.

Together with other leading industry groups, IPC has been using its development of the new IPC-1752B Materials Declaration Management standard and the IPC-1754 Materials and Substances Declaration for Aerospace and Defense and Other Industries to road-test the data fields needed in supplier materials declarations. Various members of IPC’s Materials Declaration Task Groups, which, for example, are responsible for development of the IPC-1752B and IPC-1754 standards, have made recommendations to ECHA.

At the workshop, ECHA confirmed that some of the recommendations are already being implemented for the prototype release in early 2020, and others need further discussion.

For example, companies can protect confidential business information about their supply chains by using their own part numbers for articles they are notifying, instead of using their suppliers’ identifiers. The company part number can be multi-sourced from several alternate suppliers, provided that the supplier part numbers are not materially different as regards REACH Candidate List substances.

Materials Categories and Articles Categories (TARIC/CN Codes) are now provided with unique Pick List IDs by ECHA in IUCLID, and they will be updated annually in October. The Materials Categories and the TARIC/CN Codes are managed by ECHA and the European Commission, respectively. The TARIC/CN Codes update will be based on the TARIC list published by the European Commission in July each year.

If Materials Categories are provided, then Mixture Codes are optional. Additional Material Characteristics is now a separate optional list, which users can use to declare further details about the materials an article is made of. The objective is to describe the materials as accurately as possible and/or to describe the applied mixture in which the Candidate List substance resides.

Also, the Candidate List entries will be provided as reference substance data sets rather than as Pick Lists because the REACH Candidate List is updated at least twice per year, which is more frequent than the IUCLID annual update. Each version of the Candidate List is identified as a Pick List in IUCLID.

In future updates to the SCIP database, ECHA is planning to provide an enumerated list of Safe Use Information text strings, with an ID for the list and an ID and description for each entry in the list. ECHA is looking forward to developing such a list together with IPC and other leading stakeholders.

The new IPC-1752B standard will help companies collect the necessary information from their supply chains so that they can start reporting into the ECHA SCIP database any products that include articles that contain REACH Candidate List substances above 0.1%.

To help you learn more, IPC and Chemical Watch are partnering on a free webinar, “Update on New IPC-1752B Supply Chain Standard,” which will take place on December 5 at 10:00 am EST.

Speakers Aidan Turnbull and Patrick Crawford will provide an update on the reporting requirements for the ECHA SCIP database and explain how your company can contribute to standards development. Click here to learn more and register today.

Thank you to Materials Declaration Task Groups for their involvement with standards development, ECHA’s development of the SCIP database, and their contributions to this blog post. And special thanks to Walter Jager, ECD Compliance, for his input on this blog post.