About Aviva Shalem Expertise I can answer questions on engineering electronic products and devices, designing electronic devices for testability, for manufacturing and for maintenance. I can also answer questins on project management (electronics = hardware) and outsourcing issues.
Experience I've more than 20 years experience in electronic products and devices engineering amd project management.
My name is Chao Liu. I am a university student studying Electronics Engineering. At present I am writing a business plan on the production of an electronic device as part of my course.
I am planning to contact manufacturers in order to obtain realist figures but I am not sure what questions I should be posing.
Here are some questions which I've thought of but I am not sure if its correct or what other informations I need:
Find out the cost of production (depending on the size of order)
Length of time required
Percentage of defect
many thanks for you help
Chao Liu
Answer Dear Chao Liu,
You should start by analysing the processes involved in producing an electronic device (assuming you don't consider the development and focus only on production).
You start by looking at your BOM (Bill Of Materials) and separating the list by criteria. Fisr criteria is price. There would be a few items that cost 10% or more of the whole BOM. Even a small change in their price might greatly affect the whole business plan. The second criteria is custom made Vs off the shelf. Usualy, custom made is relatively expensive, takes time to manufacture and is prone to mistakes. That will affect both your budget and time tables. These lists are not mutually exclusive! For example: The most expensive components can be CPU, flash memory chip, PCB (bare board)and the package (the product casing). The custom made items can be the bare board, the packaging (product case), the outer packaging (delivery case), the bulk packaging, an heatsink and a transformer.
Cost of production consists of cost of custom made items, cost of rest of components (including cost of storage and preparation for assembly), cost of assembly and cost of testing and integration (integration means connecting all the system's parts together and see how they work - including packing).
Bare board manufacturing and board assembly are affected by the board's type and the board's technology. Board type can be double side or multy layer. Each of these types might be rigid or flex. Board technology can be regular or high density and each of these technologies might be regular (containing lead) or RoHS compliant (no lead, a different base material and somewhat different process).
For example, a board can be double sided, rigid, high density regular (or any other combination). The most expensive combination is multy layer, flex or rigid-flex, high density, RoHS compliant. In this case the bare board can be one of the most expensive items on the BOM. For the sake of your exercise, I would explore the extreme ends. A simple double sided bare board would cost 1$ per square decimeter (100X100 mm)or even less ( for mass production), while the most expensive combination can cost 20$ (more for buried capacitance/buried resistors and other exotic options). That's a big differance for one item.
The same is true for assembly. A simple board assembly can cost 1$ (or less) for 100 components (not including large SMT components and BGAs) and up to 10$ if components and processes are RoHS compliant.
We, in the industry, expect these prices to go down as we gain more and more experience using RoHS compliant components and processes but they will remain higher than the regular prices due to more expensive materials (silver instead of lead, for example) and longer processes.
Time tables vary less than prices but, as mentioned above, they are a bit longer. Bare board mass production will stil range between 3 to 4 weeks regardless of type (Mostly, depends on manufacturer's time tables) but, assembly will last anything between a few hours to a few days longer - depending on quantities.
Packaging is another item on the BOM that needs special consideration. Packs (the "box" for the board or boards) can be plastic, metal or a combination of materials. Off the shelf plastic boxes might cost 1$ or less and you treat them as any other item on the BOM. Made to order packs (the usual case) take time and money to produce and assemble. Again, for the sake of the exercise, I would go for a 2 or 3 parts cast plastic pack (parts produced by pouring plastic in to molds)that click in to each other (so you don't need screws). A more realistic scenario would be a plastic pack and 8 screws - 4 for the pack and 4 for fastening the board to the pack. Keep in mind that screws's assembly is one of the most expensive items on the assembly list as it is usualy done by hand.
As a rule, try to keep handwork to the minimum. It's expensive and not accurate. From that perspective, ICT (In Circuit Testing) is better than FT (Functional Testing)unless you automate FT by using an automated JIG (costs at least 1000$ and a complicated one can easily reach 10000$. I usualy put down a figure of 5000$ for quantities of 20000 or more). For quantities over 100000 you must consider time and cost of maintenance for the JIG (pins' replacement and calibrations). You must also keep in mind that ICT can't replace FT. Companies usualy use one of the following strategies: Only full FT (FT for each board - that's when building a JIG becomes very attractive)or full ICT and sample FT (size of sample depends on number of boards per batch). The outer package (usualy a carton) design can (and usualy does) take a long time (months!) but, if well designed, manufacturing is quick and cheap (one week for 10000 boxes, suitable for a pc mouse, at 5 to 10 cents a box - depending on materials and delivered flat). By the way, a pc mouse or a similar device might be a good device to base your buisness plan on. It's relatively simple (not many parts), it's small and it is produced in huge quantities. its most expensive parts are the controller, the cable (or IR interface and transmitter or the RF transmitter for wireless mice), the plastic casing (4 or 5 parts!) and the outer box including the manual and install CD. Colour printed and laminated carton + folding + manual booklet + booklet insertion in to the carton + CD burning and printing + insertion and mouse insertion can add up to 1$ and take about 5 minutes per unit. It goes down to 0.5$ if you build an automated line (using robots) to do the folding and insertion operations and lasts about 1 minute per unit (but you pay millions for the line!).
I hope this somewhat lengthy discussion has given you a broader and more detailed view of the issues involved in electronic device production and will help you complete your assignment.
