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Design for Manufacturing - Practical steps to reduce total cost of ownership By Petra Ebner, Director of Business Development, Elcoteq SE
Introduction
It is well known that companies involved in the communications technology market are under pressure to produce quality products quickly and as cost effectively as possible. However, the supply chain for these products is very complex, starting with R&D, moving through delivery to network operation and management, and beyond. Because of this pressure, forward thinking companies create partnerships and collaborations to handle parts of the supply chain where these arrangements can add value.
Manufacturing is a critical part of that supply chain, yet many companies do not select a manufacturing partner or bring an electronics manufacturing services (EMS) company into the process until a new product is ready for volume production. This paper will show the extra value and benefits derived by working with an EMS company early in the design cycle (Early Supplier Involvement, ESI)
DfM as a Component in the Product Lifecycle Context
In the product lifecycle concept, there are three stages: research and development, volume manufacturing, and post manufacturing. The R&D stage consists of creating the design, determining the bill of materials, developing the recipe to manufacture that design, and giving that input to a contract manufacturer for volume manufacturing. There is little collaboration between the R&D team and the contract manufacturer. Therefore, some elements of design for manufacturing (DfM) often is omitted from the product lifecycle.
Scope of DfM
A simple definition of design for manufacturing is examining the long term impact of decisions made during the design of a product. Companies can profit if early in the product life cycle they take into account the cost impact that can be derived by examining the elements that comprise DfM. Design for manufacturing (or DfX) consists of six elements:
· Design for Sourcing · Design for Logistics · Design for Assembly · Design for Test · Design for Repair · Design for Environment
Main benefit from ESI comes from the fact that if each of sub-suppliers are let to fine tune and optimize their own part of supply chain, only local optimum of cost & quality is found. Here EMS companies are looking at the big picture and can co-optimize the whole chain.
1. Design for Sourcing
When most products were designed and manufactured within the same company, communication between production personnel and design engineers was relatively easy. It might be said that a rudimentary form of design for manufacturing was built into the product lifecycle because of this interaction. With the growth of outsourcing, design engineers have fewer opportunities to interact on a daily basis with the manufacturing team. Since they are no longer part of one company, their purchasing departments are separate and not coordinated. An engineer or buyer in the R&D stage might decide to purchase a component based solely on whether the component meets the desired specifications and how quickly he can get it. While these are reasonable parameters to regard when only a small number of products will be built, volume manufacturing requires other considerations.
Sourcing involves answering the questions what to buy, where to buy, how much to buy, and when to buy. An EMS company knows the suppliers. They know which ones can produce the quantities needed and deliver them on time in the right quality and to the multiple locations in which the product might be built. They buy in quantity so they can take advantage of volume discounts. Because they use millions of components, they know which have the best quality and what will work best in various designs and under various conditions. At the same time component selections might have influence on other parts of DfM, this can be taken into account by professional EMS companies.
DfM can have a large impact on the timing of the purchase. For totally new products two years can pass between the initial R&D and the time the product is ready for volume production. At the beginning of the design cycle, the engineer or buyer chooses electrical components, materials, substrates, enclosures, connectors, and other building blocks of the new product. It is important to consider whether some of these are legacy products that might be obsolete by the end of the design stage, whether they are new and still possibly undergoing their own manufacturability and availability issues, and what products might be in the prototype stage and available for beta testing by the supplier or ready for use within the two years. EMS companies who are involved early in the design process can provide guidance in these areas.
Engaging the EMS company early in the design of a new product allows its engineers and buyers to anticipate procurement issues. Global manufacturers have enormous price and availability leverage with suppliers, giving the EMS companies advantages not normally accessible to R&D personnel. Their early awareness of the future need of a specific item can help them and their customer proactively prepare a sourcing strategy and obtain firm commitments from preferred suppliers. By proactively preparing for the purchase of materials and components for volume manufacturing and to having a sourcing strategy, although saving potential depends on the commodity, in some cases there can be a 50% savings.
2. Design for Logistics
Logistics, both inbound and outbound, can be a tremendous variable in the total cost of operation. Decisions made in the design phase can result in extra savings or costs when it comes to logistics. How big a buffer do you have regarding lead times? What flexibility is in your production and delivery schedule? How many parts or subsystems are you sourcing from how many vendors and locations? What is the size and modularity of your product? The design of your package can impact the type of logistics that are required and vice versa. This is also the time to discuss where manufacturing will take place. What will be the duties and tariffs involved? What type of paperwork will the logistics require? Where does the product have to ship? How do you decide whether to ship via truck, rail, sea, or air? The global EMS provider is experienced with local transportation companies in target markets, customs and duties charged by local governments and regional authorities, and can help you determine the most cost effective place to purchase and manufacture your product. EMS companies also typically have the ability to coordinate all pieces of the sourcing and logistics puzzle so that each piece fits smoothly with the others.
3. Design for Assembly
Streamlining the assembly process can result in tremendous cost and time savings and improve quality, reliability, throughput, and yield. EMS companies have a vast database of knowledge about the capabilities of high volume assembly equipment and all facets of the modern electronics production line, and they have systems in place for optimizing the process flow.
Designers often produce prototypes on manual lab equipment, especially when their manufacturing is outsourced and there are limited or no manufacturing capabilities in-house. However, building prototypes in-house on manual equipment with the intent of transitioning production to automated equipment often creates problems. Designs are often developed around the manual equipment without much thought for future automation. Just because an assembly process is successful on a manual piece of equipment does not mean that the process is ready for full, automated production. Some additional considerations that must be designed into the process. For example vision systems need adequate fiducials to ensure they can accurately locate and place components and components need to be presented in a fashion that is compatible with full-scale production. Not designing for assembly can lead to an assembly procedure that needs significant and costly refinements to process flow and materials before it is ready for volume manufacturing.
4. Design for Test
There are both economical and technical advantages to design for test (DfT). The first and most obvious economical reason is to minimize investment in test equipment. As test equipment becomes more specialized, it also becomes more expensive. DfT focuses on precisely the equipment needed to produce a new product, and eliminates duplication of test functions in multiple machines. A second and closely related financial justification for DfT is that it considers ways in which existing test equipment might be refitted and reused. Since testing is rather costly on high-tech products, it makes sense to try to optimize test procedures. Sometimes some tests are un-necessary or can be achieved in adequate reliability with less expensive methods. EMS companies have typically vast knowledge about actual test failures and their effect during manufacturing. By bringing this knowledge to R&D phase, significant reductions in test times can be achieved without making compromises to product quality
In addition to enabling the choice of the best test equipment for a new product, DfT also looks at the setup cost of test. Test engineers examine fixture types and develop a test program that is both effective and efficient. A final economic foundation for design for test is reduction of total test time.
The technical reasons for DfT are to:
· Speed up test execution · Improve fault detection · Provide accurate diagnostics to support fault analysis · Simplify repair · Evaluate needed test steps and alternative solutions for high cost testings
5. Design for Repair
A startling statistic shows the need for design for repair (DfR): up to 50% of units returned for repair are not faulty. Several conditions can lead to this kind of waste of time and resources. Sometimes the equipment used to determine whether a unit is faulty is non-standard. Test equipment that is perfect for volume manufacturing might not fit the needs of repair functions. Design for repair supports the establishment of simple hardware and software modifications, as well as failure analysis and clear failure messages.
Design for repair encourages robust design so that alternative components can be used. One important aspect of robustness is modular design, which enables quick and simple disassembly during repair. DfR also ensures that a new product has easy access for repair tools and carries labels with easily identifiable model number, version, and date of manufacture.
A substantial, but perhaps overlooked benefit of design for repair is the creation of a plan during the design of a product to use repair data in the selection of materials and products for future designs. Some EMS companies are particularly skilled at both collecting and analyzing repair data and reporting back to their customers so this data can be used effectively.
6. Design for Environment
Design for environment (DfE) may be a new idea for some, but the concept is simple. DfE is a systematic application of environmental life cycle considerations at the product design stage. The aim of DfE is to avoid or minimize significant environmental impacts at all stages of the lifecycle of a product. This applies to everything from the sourcing of raw materials and purchased components to the design and manufacture of the product, its distribution, use, and end-of-life disposal.
On August 13, 2007, design for environment practices will become a requirement for all products bearing the CE mark. Key issues to consider will be:
· Emissions into the air · Discharges into water · Waste · Material use · Energy use · Water use · The natural environment, including flora, fauna, and ecosystems · Social factors such as noise and the nuisance effect of a product
Summary
The equation for modern high volume manufacturing can be stated this way:
Design for Manufacturing = Design for Sourcing + Design for Logistics + Design for Assembly + Design for Test + Design for Repair + Design for Environment + Design for x, to be determined as conditions require
DfM is most effective when it is employed as early as possible in the design of a new product, where the design team involves the manufacturing team as a part of the design stage. It involves all stakeholders in the product from concept to development through manufacturing and end of life. This means an extra investment during the design stage, but it is an investment that in the end reduces total cost of ownership.
Elcoteq – Experts in Global Manufacturing
Elcoteq SE is a leading electronics manufacturing services (EMS) company with original design manufacturing (ODM) capabilities in the communications technology field. Elcoteq provides global end-to-end solutions consisting of design, NPI, manufacturing, supply chain management, and after-sales services for the whole lifecycle of its customers' products. These products include terminal products such as mobile phones and set-top boxes as well as communications network equipment such as base-stations, tower-top amplifiers, and microwave systems. The company operates in 15 countries on four continents and employs approximately 22,000 people. Elcoteq's consolidated net sales for 2005 totaled 4,169 million euros (over 5 billion USD). Elcoteq SE is listed on the Helsinki Stock Exchange.
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