EXception VAR – an overview January 2006. eXception International eXception Group, a $95m T/O...

eXception VAR – an overview

January 2006

eXception International

eXception Group, a $95m T/O group of companies, employing 500 staff in value added PCB sales, PCB manufacture & EMS services

• eXception VAR (formerly DDi International & prior to that, Kamtronics), is Europe’s largest and probably oldest, value added reseller of PCB’s to a predominantly European customer base. T/O circa $40m, employing 40

• eXception PCB (Formerly DDi Tewkesbury & prior to that Zlin ccts), is 1 of Uk’s largest and leading PCB manufacturers, focussing on quick turn and technically demanding PCB’s/flex/flex-rigids, T/O circa $20m, employing 150 people

• eXception EMS (formerly DDi Technologies & prior to that, Calne Electronics), is 1 of UK’s leading low-medium volume EMS providers. Employing 300 people, T/O $35m,

eXception Group eXception Group

eVAR services eVAR services

• Supported by “Best in Class” supply base in China, Taiwan, Malaysia and UK

• Far East supply of low to high vol, 2-20L boards, no MOV no MOQ

• Supporting Far East lead-times from 10 w/days, DDP

• Extensive stocking/hubbing/buffering facilities in UK & USA

• Supporting STS,STL, JIT, Kan Ban• All engineering, QA, sales, service support

from local facility

Evolution of eXception VAR

Opened as a sister company to Kam Circuits in 1993, and probably one of the first Europena PCB companies to import PCBs from suppliers in China/Taiwan. A handful of employees with T/O growing from zero to circa $10m over the next 7 years.

Same name, new logo Kamtronic’s business was acquired by our Management team in March 2000. At the time, company employed 11 people but was losing money

After 3 years of unprecedented growth, in Oct 2002 Kamtronic’s management team sold shares to DDi group. At time of sale and new name, Kamtronics was employing 25 people with turnover of $20m. Company demonstrated strong, profitable and sustainable growth. DDi International was renamed to eVAR in March 2005 as DDI Europe Management Team concluded a successful buy-out of DDI’s European businesses. At the time of MBO, DDi International was a $40m profitable business, employing 41 people, and maintained 90% of the same management team from the growth years, 2002-2004. Now expanded into the US with a local office, adding PCBA and on track for a $45m+ year.

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Organisational Structure

MD

How ard Gof f

Accounts Dir Supply Chain Dir Strategic Purchasing Dir

G Harvey C Nuttall J Olejnik

NB Sales Dir Eng & IT Mgr

B. Richard A Steele Anne Ledger

Customer Service Mgr

Sales Eng S'plier QA Mgr eVAR2 USA

H Bicknell D Reeves

Accts team Customer Service team INSP Stores / Dispatch Supply Chain Eng'rs SMC HK

J Clark A Groom E Cosentino C Spruce M Bidmead L Hayw ard J Clark Supply centre

A Bidmead K Pellow S Brunsdon M Young Other added value

M Sw ingew ood K Watts Cel Nuttall Insp team Stores / Disp team N Wescombe solutions

D McClung L Smith M Reddell W Hayne M McCaskie K Windsor Project coordination

N Cuf f S Witchell S Higgins

M Dolman M Turk

R Cary (p/t) G Smith

J Mann

Commercial Dir

S Strevens

Established 1990, employs 41, T/O plan for 2006 £22.5m, $40m

Evolution of eXception VAR

4046

5692

7031

8852

1139710176

15480

17613

22500

1350

18776

-308 -410109 361 613 867

1385 1312728

-5000

0

5000

10000

15000

20000

25000

Y1997 Y1998 Y1999 Y2000 Y2001 Y2002 Y2003 Y2004 Y2005 Y2006

T/O GBP K's

EBITDA GBP K's

Employees should enjoy coming to work “Can do – will do” work ethic Zero staff turnover, Zero sickness (avg <1 day per yr) Blame free environment Motivated and rewarded team Innovation encouraged Very flat management structure, equality throughout the

organization.

The Culture

No nightmares, no headaches. We open the gateway to off-

shore sourcing for you by sharing our 16 yrs of experience. Place and forget, on-time, right quality and right quantity,

best price. That we will always be able to do it, limited MOQ/MOV. We

can source all pcbs for fabrication, not just the high volume. Agile and easy to work with, we are experienced PCB people. Innovative, creative and flexible, suggesting streamlines and

improvement for efficient manufacturing. That they are the right fit customer for our business We are a successful PCB company, long term future Our spend total affords you the leveraged dollar prices that

are offered to the largest OEMs.

Customers Perceptions

2% 2% 4% 3%7%

17%

14%

51%

Eastern Europe France I reland Other Spain Sweden USA UK

Markets - Geographical

5%

20%

20% 10%

6%

11%

28%

Audio Auto CEM Marine Datacom Telecom Industrial

Markets - Segmentations

customer satisfaction : December 2005

20 different attributes relating to customer service are measured 20 different attributes relating to customer service are measured monthly, selection shown abovemonthly, selection shown above

Customer service & support

0.00% 0.00% 0.00%

100.00%

0.00%0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

Veryunsatisf ied

Unsatisf ied Satisf ied Very satisf ied Exceededexpectations

Communication

0.00% 0.00%

33.33%

66.67%

0.00%0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Very unsatisf ied Unsatisf ied Satisf ied Very satisf ied Exceededexpectations

Overall

0.00% 0.00% 0.00%

100.00%

0.00%0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

Veryunsatisf ied

Unsatisf ied Somew hatsatisf ied

Very satisf ied ExtremelySatisf ied

eXception service compared to others

0.00% 0.00% 0.00%

100.00%

0.00%0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

Poor Somew hatw orse

Equal Somew hatbetter

Much better

Delivering at every level, value adding PCB services as a competitive and strategic extension to procurement activities

Total Supply Chain Partner – 4 Cornerstones

Purchasing Managementbest in class

supply

Order Managementcompetitive total cost of ownership

Quality Management

risk free added value

Logistics Management

dedicated team = genuine

added value

Pricing Excellence

Service Excellence

eXception VAR’s strength is their ability to manage a dynamic supply Far East supply chain supporting high mix/low to medium volume boards cost effectively for customers spending typically, $500k to $5m per year on bare PCB’s

Order Management – Customer Profile

Order Management

competitive total cost of

ownership

Receive data, input, audit and check data

Inspection & mechanical testing

UK

Purchase order received

Despatch & invoicefrom UK or USA

Manufacture in Far East, incl AOI& Electrical test.

Manufacture inUK, incl AOI &

EL test

Hub, Stock, Manage stock

• ‘Custom fit’ order management service

• Gerber data verified & controlled by UK engineers

• WIP status and delivery dates throughout manufacture to shipping monitored

• Approved manufacturers produce goods, 100% inspect, electrical and mechanical and conformance test to data

• Controlled shipping routes into Europe

• AQL inspection, mechanical and conformance testing in UK

• Delivery, local stocking, hubbing, KanBan, Edi, JIT etc fulfilment

Order Management – Supply Chain Process

Risk Free added Value

Pricingroadmaps

Supplier base &benchmarking

OTD &servicemetrics

12monthobjectives &

goals

Fiscal andbusinessmetrics

Technologyroadmaps and

valueengineering

Qualityperformance

Reviewmeeting:Targets

The Quarterly review structure is the formalisation of the jointly agreed customer & supplier business plan.

The service bundle is specific and unique to every customer.

• Metrics & measurements are common to enable accurate comparison which leads to jointly agreed improvement programs.

• Exception VAR’s business plan is partly developed with knowledge of our top customers own business goals, - i.e., our directions need to converge.

Order Management – Customer Service Tools

Each year as many as 100 different PCB suppliers in all major PCB geographical markets are market tracked to establish & react to pricing trends. This ensures World Class Pricing. eXception VAR strives to establish long term supply agreements with “Best in Class” suppliers

Purchasing Management – Best in Class Supply



supply

European Based Fast Turn/Prototype – now in group

Low To Mid Volume, Medium technology,15 parts/week on QTA (QS9000)

Medium Volume High Technology (QS9000)

Mid to high Volume, Mid Technology(QS9000)

High Volume, Mid To High TechnologyIncluding HDI and thin core/fine line (QS9000)

Global Flex– FlexiblesAirpro – Microwaves

volume

technology

Hanstar Taiwan

TPCMainland

China

50sqm 16+ layersHDI capabilityHigh freq substrates

Up to 10 layersStd technologyBlind and buriedVia capability

5000sqm

PotechnicsMainland China

CircuitechGlobal Flex

Fast T

urn

Asia

, Sh

en

zhen

Sou

thern

C

hin

at

Concentric/Taishan

Mid to high volume single sidedQS9000 (inherited supplier)

Mid to high volume Flexibles, PTFE based and backplanes

Purchasing Management – Asian Supply

• All suppliers must have QS / TS approval (or TS roadmap if only ISO9001 : 2000)

• All suppliers should have ISO14001 or roadmap to achieve

• All suppliers should have at least 1 best in class strength :– Technology– Lead–time flexibility– Batch size flexibility– Competitive pricing over a technology or volume range

• All suppliers must demonstrate acceptable delivery performance (> 90%)

• All suppliers must achieve minimum purchasing Spec

Purchasing Management – Supplier Strategy

Complete resource & infrastructure to deliver any PCB requirement, on time, Right first time. Managing MRP’s, self billing & comprehensive ship to line, buffer, consignment and customised stock programs offered.

Logistics Management – Customised Resource


supply




added value

DOT – All customers.DOT is measured at +/- zero days against acknowledged delivery date and docked at customers premises

Logistics Management – On Time Delivery

MonthTotal

deliveries sent

OnTime

On time delivery

Late Late deliveries Short Short Full Full

J anuary-05 2399 2375 99.00% 24 1.00% 7 0.29% 2392 99.71%February-05 2221 2212 99.59% 9 0.41% 22 0.99% 2199 99.01%

March-05 2487 2472 99.40% 15 0.60% 7 0.28% 2480 99.72%April-05 2686 2667 99.29% 19 0.71% 18 0.67% 2668 99.33%May-05 2312 2293 99.18% 19 0.82% 16 0.69% 2296 99.31%J une-05 2154 2133 99.03% 21 0.97% 12 0.56% 2142 99.44%J uly-05 2106 2085 99.00% 21 1.00% 12 0.57% 2094 99.43%

August-05 2262 2220 98.14% 42 1.86% 20 0.88% 2242 99.12%September-05 2348 2317 98.68% 31 1.32% 15 0.64% 2333 99.36%

October-05 2302 2271 98.65% 31 1.35% 11 0.48% 2291 99.52%November-05 2529 2457 97.15% 67 2.65% 14 0.55% 2515 99.45%

December-05 2158 2115 98.01% 43 1.99% 11 0.51% 2147 99.49%Average 27964 27617 98.76% 342 1.22% 165 0.59% 27799 99.41%

Compare December-04 2055 2021 98.35% 34 1.65% 18 0.88% 2037 99.12%

Operating within the QS / TS quality disciplines, all boards pass through additional inspection & verification at eXception VAR

Quality Management – Risk Free Value Add


supply


Quality Management

risk free added value



added valuePricing Excellence

Service Excellence

Ensuring Quality from Remote Manufacture

• Continuous Improvements – e VAR Drive Better Quality

• 8D Closed Loop Corrective Action• TS benchmark for Quality• Value Engineering • Front end tooling control• Quarterly Review meetings with

suppliers

Customersatisfaction

Record

Contain

Act to Prevent

CorrectFeedback

Verification

I mprovement

FMEA, PPAP,

Cpk

QRM, site

audits

Quality Management – Continuous Improvement

0.00%

0.01%

0.02%

0.03%

0.04%

0.05%

0.06%

0.07%

0.08%

0.09%

0.10%Ja

n-05

Feb

-05

Mar

-05

Apr

-05

May

-05

Jun-

05

Jul-0

5

Aug

-05

Sep

-05

Oct

-05

Nov

-05

Dec

-05

Customer Returns 3 Mthly Trend

quality performance / customer metrics

Overall quality performance : Jan – Dec 2005

12 month returns from customers is averaging 100 ppm (99.99% right first time)

12 month returns from customersis averaging 100 PPM(99.99% right first time)

8D corrective actions:

• Interim / containment response within 24hrs

• Closure within 14 days.• Electronic format• Utilised for both internal / external

issues• Corrective action = process actions• Preventative = system / procedural

actions• Reviewed with suppliers - ensures

not just paperwork exercise• Documented drive for DFM

improvements

Quality Management – 8D Corrective Action

Single supply solution : from prototypes to serial deliveries, quick turn to yearly contract purchases

Global support – UK / Asia / US (3 major time zones) Quality assured – Engineering through to Inspection Service / order management – place and forget Engineering managed & supported ‘locally’ Asian manufacturing coupled with European and American

knowledge. A proven management team with a motivated staff and many years

of experience in PCB manufacture Exceptional experience – The market leading VAR with 16 years of

Far East trading history. “Best in Class” approved suppliers Customer focused with a proven business strategy that is oriented

around the growth and success of our customer.

Summary

Contacts

Alpha PCB Designs, Inc

Alpha PCB Designs6815 W. Higgins Ave.Chicago, Il 60656

Tom Bassias, Vice President773-631-5543 Phone773-631-5075 FaxWWW.alphapcbdesigns.com

Local Office of eXception VAReXception VAR International1069 Taft StreetRockville, MD. 20850

Anne Ledger, Customer Service Manager, US301-294-8444 Phone301-294-8744 Faxwww.exceptiongroup.com

Section A–

Automotive Protocols

Logistics Management – Automotive

The current method for automotive management involves:

• Downloading MRP requirements via a secure URL site (wkly)

• Updating the wkly status report with new MRP information. This includes current consignment stock, WIP & product in transit ~ once completed this is then returned to the customer.

• Update e-VAR system and load any new orders / project requirements on the approved supplier.

• Receive wkly consignment usage and update the consignment file, querying and non-deliveries or stock discrepancies.

• Monitor ALL freight and record all deliveries made.

Logistics Management – Automotive Supply

Logistics Management – Automotive

The results of this is that eXception VAR has been awarded “Supplier of Year” awards for Lean Enterprises (2003 & 2004) for

the Pollak Group located in El Paso, and “Supplier of the Year”(2004) for the Stoneridge Group.

eXception VAR PCBs are used by some of the largest automotive retailers in the world, as supplied to their sub-tier supply chain.

Section B –

HDI

eXception VAR – Technology Development

High Density Interconnections

HDI ability

Through working with best in class suppliers in both mainland China

and Taiwan, e-VAR can now support virtually any type of HDI

requirement.

Historically this has been limited to manufacturers that have wished to

focus only on the higher volume batches - > 40 SQM.

However as a result of benchmarking and working with current

suppliers to support their ‘technology revolutions’ this is no longer the

case.

HDI ability

We now have 4 approved suppliers that can support differing HDI

needs:

Tech

nolo

gy

Volume (SQM)

5 30 50 +

Potechnics

Vertex

B / B via

1 + n + 1

S.F.P.

Airpro

2 + n + 2

Stacked u via

20

HDI ability

• 1+2+1, 1+4+1 – std 1+N+1

• 1+6+1 without buried ,extend to 1+N+1

• 1+8+1 with buried via ,extend to 1+N+1

• 1+4+4+1 with buried via ,extend to 1+N+N+1

• 2+4+2 buried via ,stack via ,extend to 2+N+2

• 2+4+2 staggered via ,extend to 2+N+2

• Combine with conventional blind via

• 2+4+2 laser via with Cu plating filling

More detail……………………….

HDI ability

What does this mean in ‘real’ terms?

250um

100um

1+6+1

HDI ability


1+8+1

250um

100um

300um

HDI ability


1+4+ 4+1

Finish Board thickness 1.1 mm

250um

300um

350um

100um

HDI ability


200um

250um

250um 100um

150um

Finish Board thickness 1.1 mm

2+4+2 stacked via

HDI ability

In summary; whatever the HDI need, we can now offer a solution that

best fits the volume:

Section C –

Lead Time Development&

Fast Turn Capability

Asian Fast Turn

Until now fast turn had predominantly one source in geographical terms

- the UK / Europe. And with this, UK / European pricing levels.

The aim has been to be able to offer UK / European speed of

manufacture, with pricing structures that are more in line with standard

Asian pricing levels. The best of both worlds.

eXception VAR can now support this through a fast turn facility based

in southern China

Asian Fast Turn

The lead times (ex works) available are:

Double sided : 1-2 days Express / 3 + days Standard

Standard multilayer : 2-3 days Express / 5 + days Standard

NOTE: (i) Complexity of product and higher layer counts influence ML lead times, (ii) Capacity at time

of quoting may also impact on above lead times.

Laser direct imaging offers short cycles times andhigh precision…… which equals reliable fast turn.

Asian Fast Turn

Products available:

•Material: FR4, High Tg, Halogen Free, Rogers, Arlon, Taconic, Hybrid build

•Max panel size: 23inch*35inch ( 584.2mm x 889mm )

•Layer counts: DS – 26 Layer

•Product type: Standard / Complex HDI / Rigid Flex

•The standard PCB thickness: 0. 13mm - 7.0mm

•Max Aspect Ratio: 20:1

•Min layer by layer spacing: 0.05mm

•Min track width/ gap 3/ 3mil (0.075/ 0.075mm)

•Board finishes such as : HASL / Immersion Gold / OSP / Immersion Ag & Sn / Pb-F HASL

Section D –

Environmental Issues

Currently eXception VAR offers the following solutions for leadfree surface finishes:

Immersion Gold OSP / Entek Immersion silver Immersion Tin SnAgNi (Nihon Superior) SnAgCu SnCu

Environmental Management – Lead Free


Focusing specifically on lead free HASL finishes by supplier, you can see the following ability to supply (Pollak (automotive) approved suppliers):

These suppliers offer, what is believed to be, the best two lead free HASLfinishes available that are currently available.

SAC ~ is seen as the most widely available at this time, has a mid-range eutectic temp of 217 C, and offers excellent reliability.

SN100C ~ offers a better granular structure, less risk of bridging, improvedfillet formation and claims to offer improved wetting characteristics.

Supplier TPC – China

Potechnics – China

Lead Free HASL

Sn (95.5%) Ag (3.8%) Cu (0.7%)

Sn (99.2%) Cu (0.7%) Ni (0.1%)


Consideration should be given to the fact that we have 2 different lead freeHASL option at two different suppliers making our supply chain as diverse aspossible.

This means that if we change supplier, we have to consider that different finishes will be supplied. ~ Basically this means a specific part, with specific lead free HASL finish has to remain at a specific supplier. Unless changes to finish can be considered and approved by our customer.

.


Improvements currently in process at e-VAR are:

1. Base material reliability at higher processing temps.2. Best peelable soldermask (type and thickness) for higher processing

temps.

We are looking into the idea that for higher processing temps (> 260 C) perhaps higher Tg is not the solution as layer counts increase. We have toconsider the benefits that a phenolic based epoxy system can offer. Initialinvestigation in the industry suggests that higher layer counts are more susceptible to delamination at higher temps. Although, it is also believed to be an issue for PCB’s with layer counts approaching 16 + Layers.

Discussions with the supplier, Peters over their peelable soldermask hasresulted in their recommendation to move from the standard SD2954 to SD2955 / SD2958. This mask is more resilient to higher temperatures,while maintaining the same electrical properties. e-VAR is now working withour suppliers to introduce its use as standard for LF processing.

RoHS – What does it mean?

This is a European directive that aims to phase out substances that are seen as being hazardous, contained within electrical and electronics equipment.

This goes slightly further that the WEEE directive in that even with recycling the content of heavy metals and flame retardants can pose risks to the environment. This directive includes:

Mercury Cadmium Lead (already discussed during lead free initiatives) Chromium VI PBB – brominated flame retardant (BFR) PBDE – brominated flame retardant OBDE – brominated flame retardant

Environmental Management – RoHS

RoHS / BFR’s – Does it apply to PCB’s?

BFR’s are used in laminates to act as a flame retardant, making them safe in terms of operating temperatures – basically preventing boards combusting at high temperature.

The EU directive will only ban PBB, Penta-BDE and Oct-BDE out of the 75’s BFR’s.The EU directive has given producers a clear guarantee that no individual EU member may introduce separate restrictions or bans to the group of BFR’s other that those details in the RoHS directive.

Questions have been asked over the use of Deca-BDE, but during May 2004, the EU terminated the risk assessment of this BFR as no health risks had been identified.


RoHS / BFR’s – Do products from eXception VAR comply?

The standard FR4 used by eXception VAR approved vendors DOES contain a BFR. However this is Tetra-Bromo-BisPhenol A or TBBPA.

IPC have released a white paper on halogen free materials used within the PCB industry and this confirms that TBBPA has been qualified on a world wide basis , and has NO health, environmental or regulatory issues that shall exclude its use.However there are a number of marketing, as opposed to scientific, activities that call for its reduction (as opposed to ban) in PCB manufacturing. But these will not lead to the directive being altered.

Therefore TBBPA is, and will remain, the major flame retardant used in the PCB industry.It may not mean that products are 100% halogen free, but they DO comply with the RoHS directive.


EXception VAR – an overview January 2006. eXception International eXception Group, a $95m T/O...

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Transcript of EXception VAR – an overview January 2006. eXception International eXception Group, a $95m T/O...