Generate a creative annual spending plan that satisfies the demands for infrastructure replacements and includes much needed investment in technology upgrades.

One of the things I often grapple with is capital spending. Every year someone gives me a capital “wish list”. Looking it over, each item seems to make sense, but when I get to the bottom line I suddenly find myself wishing there were no list.

It would be great if investment was always about exciting new technology, but often capital is “invested” in more mundane things, like replacing the roof. No matter how much you have – or don’t have – for capital investment, routine maintenance often takes a significant percentage, leaving precious little for true investment in the future.

While it’s possible, if not always easy to borrow to close the gap between the needs and wants, that too has its risks. There are many PCB companies who are no longer in business in North America who know the perils of this approach all too well. The lessons of the past are very clear, spend only what you need and can afford.

One historic reality of our industry is that technology is often a “moving target.” The advancement of some technologies requires development of process changes utilizing the wide footprint of existing equipment. Other technologies require radical change not only in process, but by adding new equipment as well. Such an example is microvia technology, which requires new drilling equipment as well as process changes to existing imaging and plating capabilities. Looking forward, many new and emerging technologies, such as the new highly touted Occam Process, are still big unknowns. The potential impact of these technologies on the industry and what specific capital investments will be needed has not been identified.

And that’s where the juggling begins. If the roof falls in, the priority is very clear – you need to invest in a new roof. However when technology is constantly changing, how do you know exactly what you need, and how do you get a clear direction concerning future capital investments?

Asking your customers or prospective customers should be the first step. This information will provide valuable input, but may not provide the best answer. What it might do however, is narrow some of your options and start a “reality check” that enables you to more clearly focus on getting to the best answer. Knowing where to begin to look is only the first step in determining what specifically to do, and more importantly, how to minimize wasted time and investment.

That’s where taking advantage of the myriad of industry technical sessions, management meetings, workshops and networking opportunities – globally – can really help. Attending a technical conference or trade show can provide the opportunity to see many new products and technologies in a short amount of time.

Often, when I have attended industry events, I have been amazed at how many people simply show up and don’t become involved. It’s those passive participants who often say that the event was not worthwhile, or that they wouldn’t do it again. On the other hand, those who roll up their sleeves and get involved are the ones who develop strong relationships with their peers – relationships that enable them to pick up the phone and compare notes on technology and its implementation when they most need advice.

Working though the technology purchasing process - without going broke - requires knowing who to ask when questions arise. Equally, all relationships require the willingness to give and take – to reciprocate for the assistance offered. Obviously, not all information shared will result in an “ah ha” experience, but combined, this knowledge often works like a compass to provide a clear direction.

Opportunities to learn about new products/processes have expanded greatly in recent years. North America is no longer the biggest market, so many opportunities now exist only in other parts of the world. In particular, walking the show floor of an exhibition in China will provide an opportunity to see equipment by manufacturers that most of us have never heard of. While equipment may look similar, it is an eye opener to see how companies invest their capital to develop a better or cheaper mousetrap, which in turn may open your eyes to ways to shave a little off the cost of capital investments. In addition, many of the long-standing suppliers will show more products and equipment at an exhibition in an emerging market than they would in the stable niche market of North America.

Which brings us back to that capital investment wish list. The trick is juggling the demand for infrastructure replacement with the need for investments in new technology. The only way that anyone in a key technology/capability development role can clearly determine the difference between what is truly needed versus the latest fad is to begin the process of learning. Learning to network to understand and anticipate industry trends provides the critical knowledge for “cost vs. value” when considering capital investment, as well as a giving you a barometer as to justifying that truly new technology purchase.

Capital investment, like so many other aspects of our industry, is a process that requires constant and continued attention. No one has all the resources they would ideally like to have, and everyone has a budget. However, working the process allows cleardirection in focusing investment capital, so that you don’t have to wait until the roof falls in! PCD&F

Peter Bigelow is president and CEO of IMI (imipcb.com); This email address is being protected from spambots. You need JavaScript enabled to view it..