Quality Based Product Cost Models

Quality Based Product Cost Models

Publish Date:2017-09-09 13:52:35 Clicks: 141

The test and repair cost driver in Table 6.7 is a historical estimate in the technology-based cost model, and is based on previous or similar products FTY yields. In the quality-based cost model, test costs are derived from FTY defect prediction based on quality analysis of the product design and each manufacturing step. For all cost drivers’ parts per million (PPM) defect rates are calculated based on actual machine operations, determined from periodically dividing defects generated by all of the driver unit output for each process. The defects generated are then summed up to the product level and a test strategy developed for the most efficient removal of these defects.


An example of creating an overall design cost model for PCBs by combining all of these principles discussed earlier is shown in Table 6.9. All of the possible process steps needed to produce a typical electronic product are included in the cost model, including the various technologies of PCB assembly. The model produces a tally of the material, manufacturing, and support costs necessary to manufacture and ship the products. Each manufacturing process is broken down to its smallest discernible step, and a cost driver is assigned to each step. The process cost is then summed up and presented as a percentage of the total cost of the product.

These steps include the following:

Automatic insertion of TH parts costs, including the cost of the type of part to be inserted: axial or integrated circuit (IC). The setup coat per axial or IC part number (PN) is also included in the cost model.

Automatic placement of SMT components costs, shown by different types: passive or active SMT parts

Manual (hand) solder costs, which are dependent on the number of parts to be hand loaded.

Solder and wash operations, which are dependent on the number of PCB boards per solder frame.

Mechanical assembly, which has a cost for each part to be assembled.

In-circuit test (ICT), which is an inspection function to remove all manufacturing defects created by the previous operations. There is a normal cost associated with running the test as well as a cost per defect to be removed.

Functional test, which is required to remove all design-caused defects, as well as those not removed by ICT.

The cost column by driver is shown as a baseline. It is listed by process, and then the number of parts or drivers to arrive at the baseline cost multiplies each process cost. The quality cost is automatically connected to a Cpk calculator, which determines the number of defects, based on an analysis similar to that set out in previous chapters, and provides for the number of defects and the cost of removing those defects. The cost of replacing defective parts is shown in the quality column of the cost model. This cost is added to each process step and a resultant adjusted cost is shown. The test labor required to identify the defective parts is shown as part of the in-circuit test (ICT) for assembly defects and functional test (FT) for removing design-caused defects and those not removed by ICT.

Trade-offs are determined by calculating the capital equipment and tooling investments versus the labor expended and their impact on the cost of the product. The assembly method selection is dependent on the investment in automation or robotics versus the use of manual assembly methods. The mix of component material and attachment technology selection is also important in determining the cost of placing and soldering those components on the PCBs In addition, the design engineers can work with manufacturing to additional production equipment procurement based on the pro-sales volume,especially for those machines that can become the bottleneck in production capacity.

A good understanding is needed to evaluate the relationship of electronic product cost to other factors such as marketing and fore- casting, material and process selection, the level of automation of manufacturing equipment, and designing process methods and flows. Cost determination, estimation, tracking, and control varies depending on the life cycle phase of the product and the market it competes in. Several types of PCBs cost systems are developed, as shown in this chapter, since PCBs are the major cost components of electronic products.

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