Rezonit: from PCB to contract manufacturing
For many years Rezonit is one of the leaders in the Russian market of printed circuit boards and contract manufacturing. We met with the founder and the all-time leader of Rezonit Andrew Kucheryavy to talk about the key events in 2017, new projects and the development strategy for the next few years.
Mr. Kucheryavy, last year the company celebrated the 20th anniversary. It's quite a time for a private Russian company. Could you tell us what was especially memorable about the anniversary year?
Over the past year, we have almost completed the modernization of our own fast production plant of printed circuit boards in the Klinsky district of Moscow region, which allowed us to bring the plant to the most modern technological level, even by European standards. In 2017, the plant mastered the production of flexible and flex-rigid printed circuit boards prototypes, as well as the 6th accuracy class printed circuit boards.
Large changes are made in the structure of electronics contract manufacturing itself. They relate to virtually all aspects of the work: we are increasing production capacity, purchase new up-to-date equipment. The changes have also affected the processes of production management and product quality. We launched a promising joint project with Compel, the market leader in components distribution - fast supply of electronic assembles.
But the most important event in company life in 2017 is the start of construction of a new large plant for the production and assembling of printed circuit boards in Zelenograd (see Fig.1).
That's very interesting. Could you tell us more about the new plant?
I wouldn't like to go into details yet: the project is being negotiated and all necessary permits are obtained. The start of construction is planned for this summer. We have long cherished plans to establish such a plant. This event is a major milestone in company development. The new plant of about 15 thousand square meters area will be located at the Special Economic Zone in Zelenograd. The technological part of the project was developed by Rezonit engineers and manufacturing technicians, without involving third-part experts. We have invested in this plant all the knowledge gained over 20 years of experience in the field of printed circuit boards production and assembling. Let's agree to come back to this conversation in a year. I hope I will have more to say.
Deal. And yet I can't help but asking one question: will there be enough orders for two large plants of printed circuit boards production (in Klin and Zelenograd)?
That's a good question. Only time will tell. The process of construction and launching of a new plant will take several years, during which a lot can change. Overall, we are quite optimistic about the prospects for the country's industrial production development and we believe that the demand for modern electronics will be increasing.
In a new plant we want to concentrate fast production areas: prototype production, fast PCB assembling, stencils production. Production of medium and large series will remain at the plant in Klin district.
Rezonit still places a substantial part of its PCB production orders in China. While in our technical capabilities we are on equal terms with Chinese partners, in cost terms yet we cannot always compete with them . With the launch of a new plant, we expect to partially eliminate this lag and shift some of the medium and large orders for their own production in Russia.
Together with the launch of a new factory we are planning to actively enter the European market, so I hope we can provide orders for all our plants.
Do I understand correctly that all your plans are now focused on the new project?
Not at all. The new plant construction is a long story. The real profit of this project will be no sooner than in five years. There are more short-term plans not only for the PCB production, but also for assembling, as well as electronics contract manufacturing.
As I have said, the main stage of modernization for the printed circuit boards fast production is completed. Small changes in the equipment set and the technological process are still in progress. In this area the improvements will be targeted. The next big step in technological development of PCB production is planned after the launch of the new plant.
In the next two to three years the main efforts will be focused on the assembly department modernization. Our next goal is to achieve at least double growth in the contract production segment by the end of 2019.
The market of electronics contract manufacturing is highly competitive, with excessive production capacities. Many contract manufacturers are underutilized. And you say about the multi-fold increase in capacities. Why are you so optimistic?
In 2017 the contract manufacturing showed the biggest dynamics among all company departments (see Fig. 2). We predict that in the next two or three years this trend will continue: contract manufacturing services will grow at a faster pace. This is especially true about the components supply department, where last year growth was almost 100%. Overall, I should specify that contract manufacturing segment has huge potential, which we will try to use.
Speaking about modern manufacturing, it is impossible to ignore the trend topic of "Industry 4.0".
Indeed, most market players are actively investing in the creation of "smart production", and we are in this respect no exception. In our case, it is not just about following the latest trend but a conscious choice. It is probably a bit easier for us than for other market players, because most of the solutions relating to this area have already been elaborated during the establishing of printed circuit boards production. Much of the things that are already successfully used in the circuit boards production we are trying to implement in contract manufacturing.
We still have a very long way to go, but the effect of the first steps for implementing the principles of "Industry 4.0" in contract manufacturing is already visible. It applies to the quality of products, improvement of the production technology, production time and production cost. Over the past year we have upgraded, and in some cases replaced most of the hardware for data exchange protocols and tracking process. Our programmers completely rewrite MES-system, integrating all data into a single environment. In fact, creating a "smart manufacturing" in electronics is not only a big challenge but a very exciting experience. I enjoy working on this project.
You mentioned co-project with Compel, please tell us more about it.
The idea of the project is to supply electronic assembles in a very short time. The client sends us the original documentation, and after agreement on technical issues Compel collects a set of components for this order. At the same time Rezonit does fast production of a printed circuit board and a stencil for assembling. Then the order goes for the installation with the highest priority. Our goal is to deliver a client the finished product within 10 working days. This will allow customers to significantly reduce development time of new products, save from unnecessary hassle for the prototype boards manufacturing, purchase of components and test series installation — all of these services client will receive in one place.
The idea of organizing the service belongs to Boris Rudyak, head of the Compel group. This project maximizes the use of the two companies core competencies — delivery in the shortest possible time of a complete set of components from Compel with fast production and boards installation by Rezonit. Thanks to the close interaction of all services of the two companies, the integration of IT systems and logistics optimization, we are planning to meet strict delivery deadlines of electronic assembles.
At what stage is the project? When you are planning to enter the market?
This service is provided to our clients since the summer of 2017. For now we have hundreds of actual orders shipped to customers within the framework of this project.
These numbers, of course, are far from set goals, but we can be sure that the testing phase is completed. At first, we were building interaction, optimizing timing, accumulating the statistics. Then we were determining the procedures, documentation requirements, quality control algorithms and were integrating it into systems of two companies.
Simultaneously with the optimization of interaction process we created a manufacturing and logistics infrastructure to fully implement this project. Compel is constantly working to reduce components delivery times and its results are gratifying. As to the printed circuit boards production, now we may say about our full readiness to work in this project. During the assembling stage of the project we use Rezonit existing facilities: assembly plants in Klin district and in St. Petersburg, creating a parallel production of the special areas for this project.
We try not to force things. Currently we are creating a web platform to receive orders online, after which we plan to do a full announcement. Moreover, entering the Russian market is not our ultimate goal. According to our estimates, the service "Express electronic assembles" has a very large export potential. We're planning to enter foreign markets with this service.
Rezonit is known in the market primarily as manufacturer of printed circuit boards. Now, speaking about future plans, you mostly talk about the assembling and contract electronics manufacturing. Could this mean the focus shift in the company development?
In printed circuit boards production we have achieved a lot and at the moment, Rezonit is one of the leaders of the Russian market. We have very ambitious plans for the production of printed circuit boards in Russia, but these are long-term plans. In the next two or three years the main focus of the company will be shifted to the assembly and contract electronics manufacturing, as the goal of Rezonit is also to become one of the leaders in this market.
All announced plans fully comply with the company's mission: provide developers with a single manufacturing site for the production of competitive electronics in Russia.