Archive for May, 2011

Scorecarding Contract Manufacturers: Preventing Chargebacks Before They Happen

Trust But VerifyOEMs which work with contract manufacturers have to follow the old adage: trust but verify.  We all carefully vet and work with prospective partners so we can know that we’re working with entities whom we can trust to perform to our expectations. In the case of the OEM and CM relationship a major piece of this trust  is visibility and transparency on manufactured product quality.

However, it’s difficult for some OEMs to gain comprehensive insight into the manufacturing processes of their partners and dig into critical details such as SPC, Yield Failures, etc.  Even the contract manufacturer might not have the capability to fully calculate the impact of quality on their own operations.

One method to handle this is through “Supplier Chargebacks”. This is a punitive process, which  are monetary penalties charged by OEM Manufacturers back to Contract Manufacturers for  non-conforming material or products.  The charges can include  not only the costs for the low-quality product, but also for:

  • Eventual disassembly of the part
  • Quality department handling
  • Handling by the planner to get a new part
  • Communications with the supplier – what shall be done with the part?
  • Attention from engineers

Standard best practices from OEM’s now incorporate these metrics into a “scorecard” format which are given to the Contract Manufacturers as part of their Continuous Improvement initiatives in the supply chain.

A critical overriding metric in these scorecards are concepts such as “PPM (Parts Per Million) or “DPU (Defects Per Unit)”.   This is a threshold number which the OEM sets on incoming defective  units into their facilities. For example a score of  50PPM would mean that the CM would have to provide less than 50  units which have failed out of 1 million.

A more proactive versus punitive method of handling such PPM or scorecard processes, would be to have the CM understand the quality of their product before shipping even begins. Such methodologies as SPC or RealTime SPC would give the CM that edge to win on the metric.  A collaborative process such as this could well save both the OEM  AND CM money, time and resources.

How Contract Manufacturers Can Manage Counterfeit Components

I  was at the May 2011 Del Mar Electronics (http://www.vts.com/delmar/) tradeshow a couple of weeks ago and attended a seminar called “Counterfeit Electronic Components Workshop”. I had a conversation with a couple of attendees and speaking guests on the impact of counterfeit electronic components (capacitors, resistors, integrated circuits etc).  The definition of a counterfeit electronic part is one which has had its deliberately misrepresented by the supplier. ‘Identity’ includes such things as manufacturer, cage code, part number, date and lot code, reliability level, testing, inspection etc.

One surprising statistic that was thrown around is that up to 40% of electronic components going into manufacturing OEMs like Apple can be counterfeit.   Depending upon how the components are screened, this can lead to defective, out-of-specification or completely not working end products (ie…an Ipod).  The impact of this can be large, not only from the loss of money from purchasing the counterfeit parts but also downstream from the manufacturing cost, to the testing cost to the eventual rework and discovery of the issue.

Bill Cardoso (Creative Electron Inc) who spoke at the Seminar talked about how some 3rd party companies help OEMs catch such counterfeits through techniques such as x-ray, visual inspection, Encapsulation and Electronic Testing. Unfortunately in some cases, the counterfeit can be subtle in that resistor/capacitor/inductor values or even older generation (but functionally the same) IC parts have been misrepresented in order to get them out of someone’s inventory and sold to an OEM.   In this case, the functionality of the end product may still be there but the performance may have been degraded due to these subtle value differences.

In the case of aerospace, space or medical applications which need very tight performances on critical parameters, another methodology to catch possible counterfeit components is to monitor measurement trends.  The chart below shows a measurement trend (y axis=RF power, X axis=date range of serials tested). As you can see on 8/09 something happened with the measurement which shows that perhaps some component value had changed. Was this a counterfeit component that caused this variation or was it normal?  By looking at trend charts like this, at least the investigation can start.

Electronics Makers Serving Up Half-Baked Gadgets?

Keep an eye on qualityThere’s an interesting article (link courtesy of CNN) the other week about the rash of consumer electronics that are being shipped to end customers with minor (and at times major) deficiencies in functionality.  An important quote from the article reads “Often, companies launching complex hardware-and-software packages are forced to make compromises in order to meet deadlines,’ said Harry Wang, a mobile analyst for market research firm Parks Associates.”

It’s crucial for test data engineers to keep this development in context: if businesses find a quantifiable value in rushing production schedules before a product is fully polished, then it’s important to maintain a steady grasp on your component quality trends before they ship for final assembly.  If you aren’t paying attention to your SPC and quality data as the components are being manufactured, there won’t be any second chances or cushion time before the product is in the hands of the consumer-and, unfortunately, test data engineers will inevitably have to shoulder much of the difficult and time-consuming recall and warranty return processes triggered by such an inflexible timetable.

Upcoming IntraStage Versions

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I just sat in a product roadmap meeting for IntraStage versions 4.4 and 5.0, and it looks like we have some exciting changes coming.

The development team has been busy soliciting design changes from our customers, and they’ve been working on some significant modifications and improvements to the IntraStage solution.

Stay tuned: we can’t say too much more yet, but we’ll give some details closer to the V4.4 and V5.0 release dates scheduled for later this year.