PRODUCTION CONTROL (1)

This time, I hope to discuss other aspects aside from SMT technical issues.

                            

What is Production?

·        It simply refers to “a comprehensive management that is linked to production sales “.

 

·        It depends on market demand where current market requires inexpensive outputs to be produced fast with expected function and quality.

 

·         To meet prompt delivery, three aspects; man - machine - material must be monitored and controlled closely as well as the quality and quantity.

Production Flow in the Market

Research    ►    Development     ►     Design     ►    Prototype     ►     Production Preparation     ►    Procurement     ►    Production    ►   Sales

            (R&D / Procurement/ Production are the 3 Main Stages)

Flow in Sub-Contractors

Inquiry           Estimation         Procurement         Trial             Production      Delivery

When parts are supplied by a manufacturer, the procurement step may not necessary.

Several Types of New Inquiries

·        Normally, both drawings and samples are supposed to be supplied by the manufacturer. However, for inquiries like R&D stage inquiry, only component numbers are given while PCB sizes are unknown.

·        Sample photos are sometimes provided, while sub-contractors have to complete the whole design.

(Photos above are USB memory stick and HDD)

Quotation

·        A rough quotation is cited based on the pick-up components from photo and present it to customers as a guide.

·        Manufacturers shall study and evaluate with information given on hand and estimate the processing cost of new products in order verify the new products whether consistent with the target price.

·        Manufacturers are under risks of facing product failure, shall the product does not meet the specifications as expected after the trial evaluation, component changes, circuit review, processing time increased attributed to the modifications, additional jigs, and changes electrical tester, etc, attributed to the higher costs.

·        This increased cost will be passed down to the sub-contractors that might contract a non-profitable project, unless the makers absorb the additional costs.

·        Hence, the quotations must be done carefully and precisely as well as competitive pricing, so as to match up with competitors.

·        Lastly, the sub-contractor must decide a pricing that fits the market situation, customer’s requirement and also the total costs of production.

Factory Level

·        Cost is the prior concern among Japanese firms, MNCs and local competitive factories.

·        Formerly, cost of machine implementation, machine depreciation and labour were contained in sub-contractors’ cost of an implementation of chip shooter capacity (for C/R).

·        However, since the EMS industry took off at late 90’s, the structure of pricing had been changed as this attributed to production cost which also had been reduced by 30% ~ 50%. 

·        Such low-cost geographies had brought greater attraction to the Japanese MNCs to invest.

 

:: Quoted by Mr. Berdie, dated 20 Aug’10 ::