Putting the pigeons in the right holes
Steve Scheiber, Contributing Technical Editor -- Test & Measurement World, 6/1/2005 2:00:00 AM
Historically, in performing economic analysis of board-test strategies—either for strategy decision-making or capital-equipment justification—the biggest hurdle lay in the fact that many companies did not adequately account for scrap. Standard practice often classified scrapped boards as "inventory." The practice began years ago when companies could reasonably expect to go back to the "bonepile," repair the boards, and use them in subsequent production.
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| An inadequate test strategy may scrap even a board with a simple short that it cannot find. Courtesy of Teradyne. |
Considering the speed with which technology changes today, boards that don't get repaired during initial manufacturing will be obsolete and useless by the time you get back to them. Unfortunately, reclassifying inventoried boards as scrap reduces the value of inventory assets, directly reducing the company's bottom line. No one seems willing to accept that responsibility. The situation is even more severe in Europe, where strict rules on recovery and recycling of scrapped materials represent an addition financial burden.
In the wake of the Enron disintegration and the passage of the Sarbanes-Oxley Act governing financial disclosures, however, the atmosphere has changed. Categorizing "scrap" as "inventory" has been designated one area of inaccurate accounting that must be corrected. This paradigm shift has significant implications for engineers looking to "sell" test-strategy ideas to upper management.
In nearly two decades of performing economic analyses of manufacturing and test operations, I have discovered one undeniable constant: If a process creates more than a tiny percentage of scrap, the value of that scrap rapidly swamps all other costs for test-and-repair operations. A few years ago, I created what I thought was a reasonably realistic repair vs. scrap example. When I ran the numbers, I discovered that repairing 90% of bad boards instead of scrapping them saved my mythical company more than $7 billion. Although that example was hypothetical, the point it made was very real.
Correctly taking scrap into account enormously increases the payback of a successful test strategy. It permits justifying a more comprehensive strategy even lacking a non-monetary consequence of shipping defective products (as with medical equipment). The additional ammunition may even permit you to justify amplifying an existing strategy—by calculating the cost of a new strategy against the "do nothing" alternative. In addition, acquiring even the most elaborate data-gathering and materials-tracking tools becomes more cost-effective, because those tools minimize the necessity to count inventory directly.
For years, engineers have tried to change management's perception that testing has no value. Perhaps the current environment will help us to do exactly that.
Power and flexibility
Boasting new software and a tester-per-pin architecture, Agilent's i5000 in-circuit test system offers a 1:1 ratio of hybrid channel-to-node and tester-per-pin, allowing developers to assign test resources during program generation regardless of their location, so fixtures can be built in parallel. Agilent claims that the i5000's tests are transportable and repeatable, permitting migration from tester to tester, line to line, and site to site with minimal impact on the results. www.agilent.com.
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