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Increasing Competitiveness with Inline Programming
December 31, 1969 |Estimated reading time: 4 minutes
Common wisdom holds that American-based factories have trouble competing with offshore factories where operational costs are much lower — unless they outsource key parts of manufacturing to an EMS provider. Managers for a large, innovative cell phone manufacturer proved that with a little ingenuity, a U.S. facility could go head-to-head with any factory in the world.
By Mark Briant
One cell phone manufacturer was evaluating the prospect of converting to an outsourced EMS strategy, but company managers still believed they could better control costs and quality using in-house manufacturing. This meant increasing manufacturing efficiency, and from previous initiatives, the easy efficiencies had already been gained.
The focus was product cost and logistics. The plant had four electronic manufacturing lines for production. Due to the high density of components, the double-sided board required duplication of equipment for top and bottom side manufacturing. Each line included SMT placement machines and an in-circuit test station. There was no system for programming the handsets' high-density Flash memory devices in the line. This task was handled by an off-site programming service. The downside to outsourced programming was cost – 32 and 64 Mb Flash memory devices represented 18 cents of the cost of each product. Given the plant's high production volumes, the cost of outsourcing was significant. The team concluded that in-house programming equipment would pay for itself in a short time by eliminating the outside programming expense.
Lean Thinking
Lean thinking requires managers to question every step of the manufacturing process in relation to the value it adds to the product. Cash flow for this manufacturer was negatively affected by the need to purchase devices four weeks in advance for batch production. The price of Flash memory was rapidly decreasing, so the company ended up paying more for the devices when they were bought earlier. The team identified some potentially significant downsides to in-house programming. If the programming were done in a batch process, the cost of programming and maintaining an inventory of devices would transfer the expense from the programming center to the production team. The team was also concerned that if the programming were performed in the manufacturing line, it might add significant time to the process.
During batch programming, until the unit is shipped, that value is represented as inventory cost. To reduce inventory costs, the manufacturer should program the device as late in the manufacturing process as possible to keep the part on the bill of materials at its programmed or highest value, for the shortest amount of time.
Each time devices were programmed off-line, they were issued a new part number which had to be held in inventory. The volatility of cell phone industry forecasts required large inventories, which had tobe managed. Batch programming also meant that each time the company released a software revision or new feature set, the old devices for that model became obsolete and required rework.
Moving programming to the in-circuit test phase would add value to the device at the last possible stage. However, the technology presented limitations. The test equipment already took two to three minutes per handset to carry out functional testing. Programming using the test equipment would add another minute to the process, thus reducing output.
The goal of lean manufacturing is to streamline processes to facilitate the flow of value. Even with the current long test times, the company experienced no bottlenecks in the line capacity. But there was a chance that introducing programming to the test stage might create bottlenecks or require additional capital test equipment.
Technically, each line was capable of producing more than 1 million units per year (running 24/7), but actual quantities were substantially less. The main contributor was frequent interruptions in production to accommodate changes in firmware due to product feature sets shifting across multiple models, software version updates and algorithm changes. The company realized that the plant had to find a way to minimize the delays caused by frequent firmware changes.
Figure 1. Product life cycles ramp up quickly, with the most profitable revenue coming from early market entry. Inline programming enables faster time time-to-market and longer life cycles.
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The manufacturer was introduced to a potential solution in inline programming.* The inline programming system mounted to the feeder bank of an SMT assembly machine, using the same interface as a standard component tape feeder. Blank devices were retained in ESD-protected carrier tape and real media. The programmer automatically removed blank devices from the carrier tape, programmed the devices simultaneously, and presented the programmed devices for immediate placement on the single or multi-paneled printed circuit board (PCB).
Table. Inline programming systems allow software to be programmed the same day firmware is released, and eliminate the need to inventory programmed devices.
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The philosophy of inline programming was a good fit with the company's model of lean thinking. The company ordered inline programming systems for its production lines.
Outsourced programming previously added four weeks to the prototyping schedule or new product introductions. In an industry driven by new software features, a delay of four weeks could be equated to 20 percent of the product's life. Using inline programming techniques, new features could be implemented the same day that the firmware was made available to manufacturing. Cutting several weeks from new product introduction schedules en-abled the company to ship product in the early stage of the product lifecycle.
This manufacturer realized significant cost reductions, saving $3 million in inventory and reprogramming costs and $250,000 annually in operations costs. By managing every manufacturing aspect to achieve the highest possible efficiencies, and by embracing inline programming technology, the managers at this U.S. factory compete effectively against offshore facilities situated in much lower cost centers.
*ProLINE-RoadRunner from Data I/O Corp.
Mark Briant, product marketing manager, may be contacted at Data I/O Corp., 10525 Willows Road N.E., Redmond, WA 98052; (425) 881-6856.