Fabless Silicon Manufacture: Supplier Relationships Matter

When someone contributes to the success of your product, but they don’t work directly for your company, why should they work as hard as your employees ? Your employees, and to a smaller extent your suppliers, obviously have a financial interest in your company’s success. But success takes more than this: it needs an emotional stake in the outcome of the venture.


At the end of the day, manufacture is all just a load of machines, materials and people: materials and machines don’t have much in the way of emotions and feelings (yet), but most people have a continuous subconscious (usually) struggle between feelings and rational thought. It’s fairly easy to keep the machines well maintained and the materials well controlled, but the people require a bit more effort.




So relationships with your suppliers matter at all levels: from the top to the bottom. The interactions of your engineers with theirs, those of your product engineering manager with their factory engineering managers, those of your CEO with their VP of Strategic Marketing, they all matter.


If one of your engineers can convey an excitement or technical interest in your product to one of their engineers, then their engineer will be more interested in it and will probably work a little bit harder on it. Their engineers are people just like yours, and they like to feel an understanding of what they’re working on.


At a much higher level, your big suppliers will probably have strategic goals that define the sort of end-product markets that they want to supply into, and they’ll want to hear about how your product addresses these and why yours has a better chance of success than those of your competitors.


And right down at the lowest level, on the factory floor, even the operators need to be considered: they are the least engaged with your product, but they’re the only ones that are likely to actually see or touch it. It might not look like there’s much you can do here, but a product that is a pain in the proverbial on the factory floor (awkward to handle, unstable test results, prone to breakage, confusing operator interface or manufacturing spec, or in some other way not very manufact-urable) is going to be the one that picks up the quality problems that arise because someone is glad to see it out of the way so that they can get on with the easy products and go back to thinking about the weekend. This isn’t wrong on the part of that person, it’s perfectly rational behaviour, so don’t assume it won’t happen.


So how does this turn into something you can do ? Where do you need to think about all this ? Everywhere. You don’t have to be the main agent of their happiness, but you do want try and make you and your product the one they care a little bit more about when pressure is on. Small things and large things contribute to this. Here are some examples:


  • If you scream and shout every time they can’t do something when you’ve asked for it, how will they know when it really matters ? Imagine you’ve got a certain amount of “pressure” capital: you can only apply so much before it becomes ineffective.
  • If the picture in their heads of your product and its market and why you’ve a good chance of success is clearer than that of their other clients, you’ve got a better chance of getting what you need when resources are on “allocation”. Your suppliers have limited resources and choose for themselves where they are invested: make sure you’ve sold yourselves to them well.
  • If you’ve asked a few questions that show you’ve got a bit of understanding of the technical issues they’re facing on your product, there might be a higher chance that they’ll think for a few minutes more about their technical challenges on your product than someone else’s.


Going back to that statement “manufacture is all just a load of machines, materials and people”, think about this: the machines and materials will just lie around doing nothing until the people decide to do something with them. And the behavior of those people is influenced by the relationships they have with others.




This is a guest post by Paul Freeman which is CEO of PF Consulting.

© Paul Freeman, 2015. This article was originally published by the NMI in 2015.

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