Page 208 - Six Sigma for electronics design and manufacturing

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Six Sigma Quality and Manufacturing Costs of Electronics Products
The product routing scheme should be reasonably developed. The
routing includes all of the manufacturing operations or steps neces-
sary to fabricate, assemble, inspect and test the product. A deter-
mination should be made whether intermediate steps in the prod-
uct assembly should be treated as line fabrication items with no
inventory control points or as subassemblies. It is always desirable
to have the minimum level of assembly to reduce assembly time
and cost as well as lower inventory requirements.
The direct labor needed to produce, assemble, inspect, and test the
product should be accumulated for each manufacturing step. The
amount of labor needed is dependent on other factors such as out-
sourcing, which turns in-house labor into purchased materials, the
use of tooling, level of automation, and production volume based on
the marketing forecast.
The overhead rate for the product and whether it is different than
the typical overhead rates for the product family should be deter-
mined. The overhead should include provisions for equipment and
workspace allocations, special requirements due to energy and en-
vironmental considerations, and special skills needed to manufac-
ture and technically support the product. As materials might con-
tribute significantly to product cost, and because of the increasing
trend toward outsourcing, several overhead rates can be applied,
including one for material and another for labor. Material overhead
should include costs for material warehousing, obsolescence, pur-
chasing, and inventory control.
The quality plan for the product, including the quality goals (six
sigma or a certain level of Cpk), costs of expected yield, rework,
scrap, inspection, and testing. The defects imparted by the raw ma-
terials suppliers should be added to the defects inherent in the de-
sign as well as those incurred in production. A test strategy is then
developed for the optimum removal of these defects.
General and administrative costs, including royalties paid to corpo-
rate R&D investments, profit margins, and provisions for taxes and
reinvestment.
Startup costs. These should include costs for design revisions,
equipment and tooling debug, and support costs for additional tech-
nical and material support during the prototype and beta produc-
tion phases of the product.
A typical cost distribution of an electronic product is given in Fig-
ure 6.2. The cost estimates are regularly updated during the differ-
ent phases of product development, due to increased clarity about
the selection of components and manufacturing processes, and the
resulting fallout in the costs of material, labor, overhead, deprecia-