How to Source the Best Electronics Manufacturing Service with Confidence for SMEs?

This month we talk about “Electronic Product Manufacturing”. The challenges in this business segment go far beyond chip shortages. The name of the game is “zero defects” or operating at 6 Sigma level – to illustrate what this means – if you type 1 million characters, you are only allowed to make 3.4 mistakes … – no mean feat! Enjoy the reading.


Regards,


Roland Schmid




1.0 Introduction:


Many of the major electronic component manufacturers have a significant production base in Asia – be it Japan, Taiwan, Thailand, China, …

As a result, large EMS companies such as Flextronics, Jabil, Foxconn, Sanmina, Celestica, … are spread around the region to offer improved logistics, reduced transportation costs/times and JIT (just-in-time) services to high volume industries.


The challenge is for SMEs who do not have the volumes, may require customization, special production processes that do not fall into the mainstream of EMS suppliers (eg potting, selective conformal coating, ….).


In this edition we give you some examples of how we help customers solve the low-volume/high mix problem, find components, re-engineer products and reduce cost.



2.0 Advanced Electronics Manufacturing:


Electronics manufacturing is a highly specialized, finely tuned and automated industry. As a customer you rely on the competence of the manufacturer – you do not want to get involved in materials management, process optimization, writing test programs, …

The main areas that define success/failure are:


a) Component Sourcing – Materials Management


Getting parts at the right cost, right time, right quality, … is essential; as PCB assemblies often have several hundred components, 1 missing part can keep you high and dry! We have seen this in the past 12 months where chip shortages are crippling almost every industry.

The handling and storage of electronic components must not be underestimated. Some devices are extremely sensitive to moisture and must be stored in temperature-humidity controlled environments.

If product design is done by your engineers, make sure that you eliminate “single source components” – have a bill of materials (BOM) with 2-3 approved alternatives.


b) PCB/SMT Assembly


In EMS, high precision and high yields are a must! Good manufacturers have state-of-the art equipment and experienced/well-trained people who run and maintain machines.

If the solder paste deposition process for instance is not right (poor/wrong stencil design) the game is lost right at the start! Additionally pick & place machines must be capable of handling fine-pitch/ultra-fine pitch parts, BGA chips, etc.; the soldering technology if mature but nevertheless requires a data driven approach to ensure that temperatures, conveyor speeds, … are in line with the type and size (mass) of components to be fused to the boards.


c) Product Final Assembly and Testing


To facilitate high quality product assembly, jigs & fixtures are required to prevent operators from making assembly mistakes. Product testing is often performed at different manufacturing stages - after component placement & soldering (Optical Inspection, in-circuit testing) or at functional level (after loading software).

A competent EMS company can further offer “stress testing” (temperature – humidity cycling at various levels) as well as “burn-in” to detect any latent soldering issues (eg dry joints).


Running a successful EMS operation is a bit like running a Michelin Star restaurant! It is an unforgiving business – your materials & ingredients must be top grade (the best), your processes tuned to the ultimate levels (error free!) – consistency and a drive to continuously improve and reach new heights separates champions from amateurs. Process yields are not measured in %-age but “part per million defects”! As in a Michelin Star restaurant, every step is executed at mastery level, day-in, day-out. There is no margin for error – mistakes make the difference between success and failure (Losing money!).


Figure 1 shows pictures what equipment levels and process environments look like.


Take-Aways:


To get good results in electronics manufacturing is like running a top restaurant


· You need the best equipment

· You need the highest quality materials (PCBs, components, solder, …)

· You need highly trained operators (specialized in different process stages – solder paste deposition, component placement, soldering, testing, etc.

· You need exacting processes

· You need attention to detail, consistency and a mindset of continuous improvement



3.0 Turnkey Solutions in Electronics:


The shift from manually operated products to electronically driven devices does not just require a mindset change but involves a significant change in knowledge within a company. In a fast-changing market, outsourcing developments and manufacturing has many advantages:


· You can select external designers with broad practical experience

· You have a chance to apply a “fit for use approach” to solve complex knowledge gaps

· You can tap into a vast resources pool covering electronic hardware & software design, integration and testing

· External experts provide a convenient entry to the world of electronic components, technologies and state of the art communication options

· It gives you “speed” – fast time to market


Figure 2 shows an example of a valve controller that we have developed and are manufacturing for our customer.


Product features are:


- Integrated power supply with power/data connection to actuator

- Large colour display with user friendly menu

- Multiple external sensor inputs (temperature, pressure, ….)

- Modbus and digital I/O connections


4.0 Value Analysis – Value Engineering:


The objective of VAVE is to take cost out of a product without changing form – fit or function.


Here are some examples how we have managed to reduce product cost with relatively little effort and investments.


a) LED Pilot Light


Step(1): Product/BOM Analysis

  • Major components, cost drivers

  • AVL parts vs “free to choose components”

Step(2): Determine product assembly sequence

  • PCB Assembly (SMT) & functional testing

  • Potting

Step(3): Identify cost reduction opportunities

  • Process related

  • Components – cost drivers – BOM related


Results:


We achieved cost savings of > U$ 1/unit (> 25% of the total product cost) by the following:

1) Bezel  switch from costly “catalogue part” to custom made, injection molded bezel (investment in tooling was minimal with ROI < 1 year)

2) Potting material: evaluate different potting materials (brands) and switch to locally made Chinese brand


Figure 3 shows some product manufacturing snap shots.


b) Product Enclosure Re-design

We have changed the method of fitting 2 end plates to an AL-extrusion enclosure for a communications product

· Initial design:

2 metal end plates with 4 mounting screws each

· New design:

Injection molded end cap with snap-fit to AL extrusion housing


Figure 4 shows the product with the snap fit end cap.



c) Alternative Components – Localization of Connectors


Step (1): Check connector types/design & footprint


Step(2): Search for alternatives (major international types vs high quality Asian equivalents)


Step(3): Compare costs (cost per contact point), materials, brand reputation, etc


Results:


We have achieved a cost reduction of 40% plus for connectors for a total of 22 contacts (details see Figure 5).


Take-Aways:

  • Unless there are strict functional/product safety/reliability issues, be open to ideas of others

  • VAVE can be quick and yield significant results

  • Move away from single source components

  • Pick the “low hanging fruit”

  • Use 80/20 rule and focus on the parts/product elements that constitute major costs

  • Do the simple, easy things first – be creative but pragmatic (look at investments, implementation times/effort and risks)

5.0 Conclusions:


If you are looking for a competitive electronics products manufacturing country you cannot go past China.

As your company unlikely falls into the fold of Apple, Sony, Bosch or Hewlett Packard, large EMS companies such as Jabil, Sanmina, Flextronics or Foxconn will not talk to you unless the annual business per product exceeds U$ 1mn.

The challenge is to find EMS companies that are interested in the low volume/high mix products manufacturing. This is where we come in!


Our value is in the following:


(1) Pairing the right manufacturer with your product (size, complexity, volumes, …)

(2) Checking and qualifying sub-suppliers for housings, cable assemblies, etc.

(3) Help with product certifications (CE, IPxx)

(4) Cost comparisons and price negotiations

(5) Final product quality control

(6) Value Analysis and value engineering


There is another reason why China/Asia is an attractive location to manufacture electronic products


· Abundance of low-cost labour

· Competent pool of suppliers to make enclosures, whether in plastic or metal

· Opportunity for cost reductions via “localization” (for instance electric motors)

· Competitive base for manufacturing cable assemblies/harnesses

· High quality product packaging (gift boxes, printing, manuals, ..)


Turnkey projects, value analysis/engineering, customized production – we manage the supply chain, minimize risks and make you more competitive.














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