Cost of Manufacturing test – What can a Test Engineer do ?

Cost of Manufacturing
test – What can a Test
Engineer do ?
Bill Eklow
Sylvain Tourangeau
10/24/06 V1.0

Purpose
• Illustrate the business basics of tests costs
• The China price… impact on ROI
• Technical knowledge applied to the business
WARNING!
Generalizations
Ahead…

Outline
• What is Test for Manufacturing Operations ?
• Cost modeling
• China impact

Cost
Test for Manufacturing Operations
HW Quality
Delivery
• It’s important but…
• Test is an expense
• It slows them down

People
??
• Development is “of the people, by the people, for the
people”
• Face it, many engineers can’t talk, much less write
• Separation of concerns creates inefficiencies
• Communications and metrics alignment are key

Expectations Management
• Differences between success and
troubles
• TE’s have problems with EM
– Strong desire to please
– Avoid confrontation
– Little confidence in prediction
– Over confidence in abilities
• Significant common factor in
optimized Test processes

No silver bullet…
but a balancing act
• Technical competency and quality
• Alignment with Operations metrics
• Communications between much different
functions
• Willingness to understand “the other world”

Cost model
ROI on improvements =
Mfg costs savings – dev cost – other costs
• Mfg region
• Inventory management
• Transformation costs
• Logistics
• Field returns
I think I saw something about
that in the cost model
procedure somewhere…

Costs levers in development cycle of
improvements
Design
Phase
Mfg
Field
returns
• Cost of
development of
improvement
• Transformation
• Productivity
• Field returns cost
• Warranty
Cost of conformance Cost of non conformance
$ 10’s - 100’s K to execute $ 10’s K – 10’s M $ 10’s – 100’s M

The China factor… Numbers may not
always matter… but they sure help !
OR
Which group would you chose to work on your
optimization project when you have a factor of
~1:8 for each $ spent ?

The China factor… Example 1
1)
SMT ICT Functional
Test
2)
SMT
Prog
ICT
Functional
Test
Throughput
Prog. Cos ICT cost Year (300K)
1) 40 bds/hre $0 $0.5/bd $150K
2) 60 bds/hre $0.02 $0.33/bd $105K

The China factor… Example 2 (1/2)
1)
ICT
Functional
Test
97% 97%
2)
Reduced
ICT
Functional
Test
> 97% > 94%

The China factor… Example 2 (2/2)
ICT $/bd Funct dbg $/bd Year (300K)
1) $0.5/bd $0.16/bd $198K
2) $0.3/bd $0.19/bd $147K
• More product dependent than Example 1
• ROI highly sensitive to:
• Proof of concept and evaluation costs
• Field returns exposure if wrong

The China factor… Example 3
Regional sourcing is a sensitive issue but… no
risk, no reward !
BOM* Test cost Yearly Yearly cost
Volume
1) $1K/bd $5/bd 100K $100.5M
2) $800/bd $10/bd 100K $ 81 M
ROI sensitive to Quality and suppliers Lead Times…
but lots of monitoring can be done with $20M and
$500K in additional tests !

Conclusions
• Communications
• Expectations management
• Challenge statu quo
• Willingness to join forces
• Understanding cost model end-to-end
• Keep in mind the China factor