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Process Optimization: More Profitable than Outsourcing
December 31, 1969 |Estimated reading time: 7 minutes
U.S. manufacturers can realize higher profits over outsourcing by putting their facilities in order and fine-tuning their processes. Machine capability analysis is the first step. This article examines methods used in equipment-performance verification.
By Michael Sivigny, CeTaQ Americas
Outsourcing electronics manufacturing to the Far East continues unabated. Large, high-volume electronics manufacturers, particularly of popular consumer products, will continue to seek low-labor-cost avenues to realize the highest possible margins. We have seen China take the lion’s share of outsourcing for many years. Prior to that, Mexico was the center. As the standard of living and labor costs rise in China, large multinational corporations will, and are, seeking lower-cost manufacturing environments. Vietnam has begun adding infrastructure to support foreign investment in electronics assembly, and plants are going online. India is another venue; North Africa may be next.
One of the drivers in this trend is the market in developing countries for the same consumer electronics products popular in first-world countries, such as inexpensive computers (notebooks, laptops), game consoles, and wireless communication devices. At the same time, advancing technology and competition are driving down the cost of these products to the end user. Where the cost of products to the consumer is low, so are the margins for the manufacturer, who ultimately has little choice but to seek low-cost labor markets to manufacture them.
Not surprisingly, however, during the past couple of years, while a significant amount of business is still outsourced, much work has returned home. Small and mid-sized companies are discovering that outsourcing their electronics assembly to the other side of the world is fraught with logistical and quality-control issues that erode profitability. As margins shrink, the argument for outsourcing becomes untenable.
Increasingly, Tier II U.S. electronics manufacturers are learning that when it comes to profitability and quality, it’s much easier to control these factors at home, rather than in a factory on the other side of the world. The entire range of manufacturers - from the smallest to the largest - can do better here if they optimize their manufacturing processes. This will become more important as electronics assembly enters the “modern era,” the imminent future when process control and quality focus will be issues in soldering and circuits manufacturing.
Outsourcing to shifting low-cost labor markets means sending increasingly complex and difficult-to-manufacture circuit assemblies offshore to be built using unknown equipment by unseen companies. Shipping costs, time, potential damage, quality issues, loss of control, and other factors reduce or eliminate any low-cost-labor profit gains. Product that returns defective must be reworked or scrapped. Rework is considered a huge profit-eater in assembly. Optimizing the manufacturing process at home, where knowledge, advanced technology, and process/quality control are within reach, can help increase profitability and reduce headaches.
A 2003 study1 demonstrates how U.S. companies can realize higher profits over outsourcing by putting their houses in order and fine-tuning their production processes. This comparison was first made in 2002, before the challenges of lead-free assembly had hit home. The authors cite automation as a key factor because it means higher productivity at lower costs per unit by eliminating labor costs, as well as the uncontrollable variables introduced by human involvement in the manufacturing process. They refer to the “stunning effect that productivity has on profitability,” stating “it is cheaper and more profitable to improve at home than to send production overseas.”
Improving the process at home is not simple. To increase the percentage of automation in the process, which means greater reliance on sophisticated equipment, you must also ensure that such equipment is performing flawlessly and to its manufacturer’s specification - without errors or offsets that cause defects, and down time, and do little to widen the already narrow process window. Machine capability analysis (MCA), or performance verification, is the first step. This process ensures that all equipment in the line, from printers to pick-and-place systems to reflow ovens, are performing to spec. This is a prerequisite; all other process adjustments and fine-tuning must follow. If there is variability in machine performance, such as accuracy or repeatability, all other process refinements will be meaningless.
Figure 1. Single values Y depending on X position displaying severe table rotation.
The cost of not verifying equipment performance and correcting errors will be the slow attrition of profits due to higher defect levels, more rework, lower overall yields, production stoppages, and overtime. Large OEMs are using performance-verification methodology to certify high-performance capabilities of equipment. This is especially important as tolerances shrink, and processing speeds and volume demands increase.
Figure 2. Color accuracy map showing scaled placement deviations in X direction.
MCA testing is performed using a machine and testing technology. The system* uses vision algorithms, accurate glass plates, and components to provide independent measurement of Cp and Cpk indices on production equipment. All brands and models of SMT printers, dispensers, placement, feeders, reflow ovens, and other automated machines can be validated. Software controls the measurement equipment and provides statistical specification-based results on machine-quality performance. Comprehensive certification reports validate performance. In the semiconductor packaging arena, MCA can be used to verify the accuracy of direct-write laser scribing and dicing systems; in PCB fabrication, it can be used to verify the accuracy of hole drilling and other fabrication processes.
Pick-and-Place Issues
In one instance, an EMS firm** was having yield problems. Engineers knew these involved pick-and-place equipment, but could not pinpoint the cause. Some components were misaligned, skewed, or missing, even though the machines had been programmed correctly for each product. This meant defects and rework. The engineers began to suspect that the issues were due to more than just a slight mechanical imprecision. Because the company develops highly ruggedized electronic components and systems for industries that rely on equipment to function under adverse conditions, precision was critical.
Figure 3. X/Y plot of final machine condition after calibration and adjustment.
The manufacturing environment is high-mix/low-volume (HMLV) with four SMT lines, and one CM line. Due to its high product mix, there was a great deal of setup and change over on the machines, leaving little time for deep-level process optimization. The products are primarily SMT assemblies, both board-level and final assembly are performed in the facility, as well as product design from prototyping through assembly. To complicate matters, one production line is dedicated to lead-free assembly. Problems with a rising rate of defect levels developed gradually. Emerging difficulties were primarily in the pick-and-place area, with several off-pad issues related to nozzles and head-calibration issues. There also were several missing-component issues.
The most common problems found on placement equipment are systematic offsets (80%), which can be per head, per nozzle, per angle, or general. Offsets affect machine accuracy negatively, resulting in PCB defects, lower yields, and rework. In MCA testing, technicians go into a manufacturer’s facility and analyze placement machine capability, checking the basic settings and functions of the equipment (clamping, sensors, nozzles, camera, feeders) to identify, control, and correct failures, so that the machine can assemble product within the manufacturer’s original quality specifications (Figures 1-3).
During initial testing, all production machines were tested, and all failed to meet machine performance specifications. The machines were analyzed, problems were solved, and regularly scheduled (annual) testing was established to keep the placement machines optimized. The manufacturer learned how to analyze data to break machine performance down into different areas. For example, they can replace parts, such as movable rails and pillow blocks that are grouped into an individual p.m. schedule for replacement prior to the scheduled annual testing. Once the machine is tuned, it will perform flawlessly for the next 12 months. Testing, careful analysis of the results, and good evening scheduling are required to keep machines optimized.
Figure 4. Defects per million opportunities trends before and after system calibration and adjustment.
The testing team generates the analysis and report; the equipment manufacturer’s service personnel implement repairs. Initially, the engineers learned just how far out of control their process was. They had some placement nozzles in the wrong locations, and heads were also out of place. However, because they were not able to break it down to that level prior to testing, they did not understand what their test data indicated because the average showed things were in spec. When they began breaking it down per head, they discovered that there were some placement heads that simply weren’t functioning properly and required replacement. Correcting placement machine problems had a dramatic effect on defect levels and improved yields (Figure 4).
Conclusion
A fine-tuned process is the best assurance of a high-yield, low-defect lean manufacturing capability that assures global competitiveness and individual profitability. Automation is the key to higher productivity, thus profitability over outsourcing. The benefits of automation, however, cannot be realized without a fine-tuned process free of variables that affect repeatability. SMT
* CmController, CeTaQ Americas, Hudson, N.H.** Phoenix International, Fargo, N.D.
REFERENCES
- Lasky, Ronald and Dahle, Bjorn, “Production Migration: Do the Numbers Add Up?” EP&P, Jan. 2003.
ACKNOWLEDGMENTS
This article was originally presented at IPC APEX, Printed Circuits Expo, and the Designers Summit, Feb. 2007.
Michael Sivigny, general manager, CeTaQ Americas, may be contacted at (603) 883-7843; e-mail: msivigny@cetaq-americas.com.