Challenged by high-mix, low- volume assembly, electronics manufacturers are setting up their lines to minimize changeover and maximize efficiency.
During the past few years, U.S. electronics manufacturing service (EMS) providers have seen their businesses change from high-volume, low-mix assembly to high-mix, low-volume assembly.
There are many reasons for this shift, including mass customization, shrinking inventories and short product life cycles. Another reason is simple dollars and cents: High-volume, low-mix assembly is moving to China, Mexico and other low-cost labor markets.
“High-volume assembly is not going to be done anymore in this country,” asserts Steve Pollock, product manager with Manncorp (Huntingdon Valley, PA). “Most of our customers are OEMs assembling military or proprietary products that will never be farmed out to China. They need to produce 10 different boards at volumes of 200 to 500 boards
per month."
Even with boards that aren’t "top secret," the economics of low-volume assembly often dictate that production stay at home. "You don’t gain a whole lot by moving low-volume assembly to Mexico or China. The cost efficiencies aren’t there," says Bill Coker, director of sales and marketing at Elcoteq (Irving, TX), a contract manufacturer with plants in the United States, Europe, Asia and Mexico.
He should know. Before joining Elcoteq, Coker worked for another contract manufacturer with a high-volume assembly plant in Mexico. When assembling large numbers of circuit boards for computers, the plant excelled. When it landed a contract to assemble a small number for boards for medical imaging equipment, the plant struggled. "Low-volume assembly requires a different mentality," Coker says. "You could save a few bucks by moving low-volume assembly to a low-cost labor market, but the plant really needs to be set up to support that."
Indeed, both EMS providers and suppliers of electronics assembly equipment are learning to set up their lines differently for high-mix, low-volume assembly.
In high-mix production, EMS providers might assemble more than 100 different boards annually. These boards vary in quantity, application, size, assembly processes, components, and quality and reliability requirements. In such an environment, EMS providers face many challenges, including frequent changeovers, engineering change orders, expansive component inventories, low first-pass yields, high defect rates, price sensitivity, and capacity and resource planning.
"The big challenge with high-mix assembly is how to control the increased variation in everything, from materials to setups to manufacturing," says Coker. "In high-volume manufacturing, once you’re running consistently, you can tweak the process and monitor your control limits in real time. In high-mix, low-volume manufacturing, you can’t do that. Any variation is going to impact your profit."
"High-mix, low-volume manufacturers are much more bottom-line oriented," adds Aaron Saxton, product manager at Universal Instruments Corp. (Binghampton, NY). "They have to build 50 boards, and they have to be profitable on each one. They can’t afford to assemble 200 boards to get their machine or process performing at its best."