Reality hits AOI costs in Asia
Steve Scheiber, contributing Technical Editor -- Test & Measurement World, 1/22/2008 6:03:00 AM
If you’ve compared models of electronics manufacturing processes in Asia with their counterparts in the US and Western Europe, you’ve probably found that the biggest differences have always reflected the tradeoff between the cost of capital and the cost of labor. Much less expensive labor coupled with more expensive equipment—or so goes conventional wisdom—tilts the balance in Asia toward using more people. Money spent to minimize AOI false-failure rates, for example, will generally exceed the savings achieved by reducing the number of human inspectors and repair people required to diagnose them.
According to Jeff Bishop, product marketing engineer for Agilent Technologies, however, that situation is changing rapidly. “Customers used to see AOI false failure rates as high as 8000 to 10,000 [false] defects per million opportunities (DPMO), depending on the vendor,” commented Bishop. “After inspection, we turned the boards over to people who verified the defects and weeded out false failures, returning good boards to production and effecting repairs on the defective ones. Today, Asia is experiencing one of the fastest-growing pay scales in the world. Manufacturers there can no longer afford such labor-intensive activities. We are seeing manufacturers improving efficiency, much the way their counterparts in the West started doing a few years back. To take advantage of automation and economies of scale, we see a lot of efficiency initiatives, including company mergers such as the recent Flextronics acquisition [of Solectron].”
At first glance, this drive for greater efficiency and higher productivity may not seem obvious. Asian operations have not generally reduced their headcounts. Instead, they have increased their output without hiring as many additional people as they would have in the past. They rely on fewer manual inspectors for a given number of boards, and not as many human operators on the manufacturing floor.
According to Bishop, “In this new scenario, minimizing false failures is key to raising productivity, and therefore to growth. To accomplish that goal, AOI companies have to continually revise their failure-analysis algorithms—and those algorithms are indeed getting ever-better.”
Bishop noted that the algorithms aren’t all that’s changing: “At the same time, the inspection technology itself is moving very fast. The hardware is changing every 18 to 24 months, a pace that represents a significant challenge to software designers in particular. In fact, controlling software development has become the most difficult part of the process for equipment suppliers.”
“The longest part of AOI program development is finding examples,” Bishop continued. “Clearly establishing the range of what constitutes a ‘good’ circuit reduces the number of false failures. The proliferation of packages, backgrounds, and possible component configurations complicates this step. How does a capacitor look when it sits on a green board rather than a red board, for example? What does it look like when it is billboarded or tombstoned? The best strategy is to work closely with customers so that you get the best examples from their production lines. AOI vendors are also working hard to provide hardware and software that is more immune to these different product variables.”
Bishop concluded, “The bottom line is that with wages rising, Asian manufacturers are paying more attention to the product’s overall return on investment and not just the capital expense. Those companies in Asia and elsewhere who are striking a good balance between cost and quality are creating a gap between themselves and their competitors.”
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