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Q&A with a Turnkey EMS Provider
December 31, 1969 |Estimated reading time: 6 minutes
EPE Corporation is a 110-person turnkey EMS provider in Manchester, N.H. They specialize in domestic solutions, with high-mix and low- to medium-volume production runs. In addition to SMT, thru-hole, and BGA placement and processing, the company performs conformal coating and UV inspection, and can incorporate custom parts for assemblies when needed. Their facility is ISO 9001-2000 certified and IPC 610D Class II & III verified for lead-free and leaded processes. SMT spoke with Heather L. Steck-Yeaton, business development manager at EPE, about their operations and offerings.
SMT: What is your EMS facility's background?Steck-Yeaton: Since 1968, EPE has been supporting the electronics industry, with an original focus on production equipment. It was a natural progression for us to consolidate our business and focus on EMS offerings. This underlying understanding of the industry means we have always been conscious of the need to service diverse markets. Our target markets continue to be those where there is a diversity of products within the market: military/prime contractors, industrial products, and pro-sumer goods, for example. This has contributed stability and growth through some unpleasant market shifts. Because of this, our capabilities support a variety of manufacturing requirements and our specialization lies in the ability to manage low to medium volumes with a high product mix.
Our management team CEO James Bell, president JD Bell, and executive VP Bob Souter really understands that flexibility and agility are paramount to meeting the challenges presented by technologically advanced, high-mix/medium-volume products. We've worked hard to build our infrastructure to support this.
SMT: How many employees do you have? Steck-Yeaton: We currently have about 110 employees. It's a challenge in the EMS industry to find skilled manufacturing personnel, but we're fortunate to have higher than average employee retention. Most of our key manufacturing personnel have been with us for at least five years, and there are some that have been with us for their entire careers.
SMT: How many SMT and manual assembly lines does EPE run? Steck-Yeaton: In SMT, we use a combination of MYDATA MY9 and MY12s machines, which we've configured into three lines. For the volumes we support we find that MYDATA gives us a lot of flexibility. It's relatively quick to change set-ups for a new job and we have the added benefit of electrical verification of components. Manual assembly lines are not tailored to a process, but rather to individual product. For products that are steady state, we create a manufacturing cell specific to the needs of that product. A typical manual assembly line starts after wave, and includes all manual activities as well as test.
SMT: Do you run lead-free, tin/lead, or both? Steck-Yeaton: We run a combination of RoHS-compliant and non-compliant products. We also accommodate a lot of product that is transition, which can be particularly challenging. The RoHS directive has really challenged us the majority of our customers know they need to get green but aren't clear on how to get there. About half of our business is RoHS-compliant, with another percentage being in transition to compliance. For commercial product, that percentage continues to climb; even where it's not a requirement we're seeing more and more customers migrating to compliance by default. Lead parts are getting harder to find and component manufacturers are taking advantage of that by raising costs. On the other hand, our military/prime contractors focused on high-reliability are firmly non-compliant.
SMT: What kind of services does the typical customer request? Steck-Yeaton: Although every customer wants something different, within industry segments there is usually a commonality in needs.
For example, our industrial customers' applications typically are either highly configurable or have requirements for specialized assembly with a large footprint. Often, they choose to perform integration and testing at their site, but purchase PCB assemblies (PCBAs) and/or subassemblies from EPE. Along with our military/prime contractors, they are more likely to request a non-compliant build with aqueous chemistries.
At the other end of the spectrum are customers who have RF and microwave applications. For them, the specialization is in the design, and they outsource manufacturing expertise. They rely on us to provide fully integrated, tested products. They usually are RoHS-compliant or in the process of converting products. Some customers have us manage their product starting with manufacture and configuration of all system components through the logistics of invoicing and shipping directly to a global end-customer.
SMT: What trend in electronics assembly do you see as most challenging, and how do you address it?Steck-Yeaton: We do see a continued drive for smaller components and RoHS compliance on the commercial side of our business, but we're a domestic supplier, so a portion of what we support will continue to be those products that don't fit the high-volume model. The biggest challenge that we see is that there are few OEMs who are not outsource savvy. That means that they are looking for increasing service offerings from their EMS providers, particularly in the area of material logistics. Over the last two years we addressed this trend and now have a full suite of in-house stores, bonding, and consignment programs.
SMT: Why do customers request conformal coating? Steck-Yeaton: Customers who are looking for conformal coating usually are concerned about protecting the reliability of their products in a harsh environment. In actuality, very few of our customers require conformal coating of their products. The products with requirements are either industrial or military in nature.
We use a spray process for conformal coating and provide UV inspection to verify final product. The application of conformal coating protects assemblies against moisture and contaminants, which helps to prevent short circuits and reduces corrosion of conductors and solders joints. Conformal coating also minimizes dendritic growth and electro-migration of metal between conductors. In addition to protecting circuits and components from abrasion and solvents, they provide stress relief and protect the insulation resistance of the circuit board.
SMT: What factors motivate you to invest in new capital equipment?Steck-Yeaton: Investing in capital equipment is a delicate balance. You don't want to purchase equipment that is going to sit idle, but on the other hand your ability to respond to capacity surges and remain flexible for your customers is key. If we see our capacity usage getting close to the 70% mark, we will address capital equipment expenditures. This past year, we invested in an additional AOI station and another SMT line to increase capacity and eliminate manufacturing bottlenecks. We also invested in an additional wave solder line, eliminating the need to switch solder pots when moving from RoHS (lead-free) to non-compliant (tin/lead) builds. That's eliminated a manufacturing bottleneck and improved our manufacturing efficiencies greatly. We also upgraded our X-ray inspection capabilities to a YESTech YTX-3000 to address an increase in the number of BGA placements we are doing. It helps further ensure the quality of product we are producing. SMT: What changes do you foresee in the industry in the next 5 years? 10 years?Steck-Yeaton: I think over the next five to ten years the "take it offshore" mantra is going to become less ubiquitous for mid-sized OEMs. Those who don't command the attention of tier I and tier II EMS providers will come to the realization that the landed cost isn't always worth the tradeoff. Customer support can become as complex as manufacturing and it's a crucial component for OEMs lacking the infrastructure of their billion-dollar counterparts. Continued consolidation of the tier I and tier II EMS providers, who are less and less likely to entertain mid-sized OEMs, only will strengthen this trend. SMT
To get in touch with EPE, visit www.epecorp.com.