Lead-free implementation

Unit 11: Implications for the company

Contents

In Unit 10 we looked at the process involved in transition, at the way options were developed, evaluated and implemented, and at some of the transition issues. We ended by asking the question as to how ready your company was for the move to lead-free, and suggesting a way in which readiness could be both assessed and reassessed as a monitoring tool. Inevitably there will be some overlap areas between Unit 10 and this unit, although the focus here is on the implications for the company. As you read the material, think about the issues of lead-free implementation as they face your own company, as well as looking for material that will help you answer Assignment 3.

Working towards Assignment 3

In order to allow you time to tackle Assignment 3, Units 11 and 12 are deliberately relatively light in terms of their research requirement. However, they offer a different type of challenge, because you will need to think about the issues in the light of the scenario for Assignment 3. We have tried to create a believable management team at AMS, and one where there are a number of management issues to address during the implementation in terms of the organisation of the company, the changes that will be needed to the infrastructure, and even the strategies that may need to be adopted in order to win support and commitment, and to make change effective.

 

Supplementary Information

Lead-free implementation, or “How do I go about doing it?”, is a topic that we are working our way through in these final three Units. In case you would like an alternative view, and a look at a resource that others involved might find helpful as a resume of the issues, go to this link for some extracts on implementation issues from Bob Willis’s Lead-free Casebook.

Involving others

In most companies, the move to lead-free will be initiated by a product champion from within, or imposed by corporate dictat from without, but in either case the focus will normally be one person or a group of people who feel committed to the project. Having created an outline plan for the work, the first task they face is involving all the other people who need to work together on the very many activities that are needed.

Exercise

Start by making a list of the people in your company who you would have to work with in order to convert to lead-free. Then ask yourself whether there are any departments that are not influenced by the change.

now read our comments

Finally read A Practical Guide to Achieving Lead-Free Electronics Assembly by Karl Seelig and David Suraski on the AIM Solder web site. The abstract says it all: “To successfully achieve lead-free electronics assembly, each participant in the manufacturing process, from purchasing to engineering to maintenance to Quality/Inspection, must have a solid understanding of the changes required of them.”

Effort will be needed from almost all other departments, and we recommend identifying people within those departments for whom lead-free will present a challenge rather than a burden. In other management education contexts these would be referred to as the “problem owners”, but perhaps “problem sharers” would be more accurate in the case of lead-free implementation.

Early in the project, by discussion with these problem sharers, the implementation team members need to identify any obstacles, particularly where departments are overloaded, and need additional resource. However, should there be reluctance to become involved, perhaps due to apathy or laziness, a different management approach may be required. The possibility that, on occasion at least, forceful intervention may be needed to create the conditions for successful implementation is one reason why we recommend that the lead-free challenge should be “owned” at the highest level within a company.

Other departments may see opportunities within the conversion process; for example, Marketing may be able to create new opportunities. More often, there will be personal benefits to be gained by being associated with the successful project, meeting individual’s needs for personal progression and job enrichment. Having identified those who need to be involved in the transition process, the implementation team needs to decide for each of the problem sharers whether to focus on fear or opportunity, stick or carrot.

The supply chain

Involving others means involving the whole supply chain, and not just those within the company.

Exercise

Think about the supply chain for a typical electronic product, and try and draw as much of this as possible.

Which areas of the supply chain will be most instrumental in supporting (or hindering) a company’s move to lead-free?

see our comments

A key to having a supply chain ready to go lead-free is an awareness of the challenges at all levels within the chain, and a commitment to provide the information that is necessary. We saw in Unit 10 that compliance with the Directive is likely to be information-based, rather than directly verified, so having the right information available from all the company’s suppliers is crucial, as is recording that information in a way that is easy to access. At an early stage in the proceedings, the company’s procurement department need to be talking to all suppliers to assess their readiness to supply lead-free. If they are distributors, this includes the support they are getting from their principals. The more suppliers that a company uses, the more difficult this gets, and some purchasing departments may be able to use the move to lead-free as an opportunity to “weed out” at least some surplus suppliers.

But how should one approach the suppliers? The traditional method is to generate a questionnaire covering every possible aspect of the situation and post it to everyone. Those who were on the receiving end of such communications in the days when ISO9000 was a new idea, and companies were seeking assurance about the status of their suppliers, will know how much recipients resented the form-filling. Particularly so when this was presented with the attitude “If you want us to do business with you, we need this information, but we are not prepared to pay for it”. We do hope that your company will take a more enlightened approach to suppliers!

Probably the best way is to start with personal phone contact with the component suppliers when attempting to source lead-free materials for a pilot project, and to work with both customer and suppliers to resolve any difficulties and to define lead-free parts in a way that is both clear and acceptable to all parties. Such a pilot procurement exercise will give valuable insight into those distributors, or component suppliers, or types of component that are most difficult to source. This is why we asked you to get some experience with the problems as part of Assignment 2.

Timing is important, and we recommend that you keep in mind that you are not the only person asking about lead-free, and that the situation is very fluid. Be sensitive about possible overload on your supplier’s systems and patience; ask as early as possible, but restrict your enquiries to parts that are actually required.

Quote

Timing is increasingly important, and time is running short . . .

Steve Pounder, general manager of Switchtec, said in August 2004 that, to account for lead-time, stock inventories and other delays, device manufacturers will need to go completely lead-free a year earlier than the RoHS Directive deadline.

Electronics Weekly, 8 September 2004

 

The Quality Department

In any company, the Quality Department will play a key role in lead-free implementation. This has both positive and negative connotations. Positively, a well-organised and well-motivated quality department can provide technical resources, and have sufficient interest in the technology to want to take up the challenge. They can contribute to the brainstorming part of generating the options, and suggest the best ways of running and managing the evaluation experiments so as to get maximum bang for your buck. You may also find within the department people who have a working knowledge of Design of Experiments, and are able to assist in the collection and analysis of data.

But there may be a negative side. For example, many quality departments are under severe strain, so have little spare resource to commit. This is particularly the case where processes are not under tight control, so that the level of rejects is high – in other words a quality department forced to be reactive rather than proactive. In some companies, lack of investment in the past has also meant that the quality department is staffed by inspectors rather than quality engineers so there is a lack of expertise.

You need to make a frank assessment as to whether the quality department is able to give help. If it can’t, would it be worth using consultancy or other short-term support? You should also consider carefully the extent to which it might actually be unhelpful to have the quality department clearly identified as the owner of the implementation project. This is because there are (unfortunately) still those around who think of a quality department as a QC ‘gate’ and not as providing quality and reliability leadership. They may thus be influenced against wholehearted participation in lead-free simply because of their negative perception about some of those apparently running the project. If this sounds like “factory politics”, then it probably is! After all, the programme needs to work with the people available, and to manipulate them where necessary in order to achieve a successful goal. Unfortunately, involving others means involvement in supervision and management at the “nitty-gritty” level.

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Design/reliability verification

Managing the transition to lead-free means managing materials, processes and equipment, and managing the process of verifying whether a design is reliable in its lead-free version. We have already seen in Unit 10 that the transition project needs to be phased. There is the danger that a pilot run will be followed too closely by other conversions, and the whole project will “fall flat on its face” unless carefully managed, with an implementation plan and sufficient resource. Bear in mind that the phasing has to allow for corrective feedback from the early experiences in order to maximise reliability and yield and to minimise expense. Some of the phasing issues are shown diagrammatically in Figure 1.

Figure 1: A time-line for level of exposure to risk

Figure 1: A time-line for level of exposure to risk

Supplementary Information


For some insights into an evaluation process, and what is needed, look at the later sections of Implementing Pb-free assembly at your factory, by Ron Lasky and Tim Jensen.
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Materials and procurement

Managing materials is simply expressed as buying the right parts, storing them correctly, and issuing them for the correct batch build, so that lead-free assemblies are built with lead-free components. This presents no conceptual problem, but such a task affects the procurement process, the stores activity, and the IT infrastructure that underpins both.

Most companies run some kind of MRP system. Combining information in the BoM and the manufacturing build plan, the system will calculate which components are needed, the quantities required, and the date that materials need to be available on the shop floor. Depending on the sophistication of the system and the volume of manufacture, the build plan may be linked to call-off contracts on suppliers, and there may be focus on “Just in Time” procedures aimed at improving reliability of supply and reducing the cost of stockholding. Manufacturing a lead-free part is no different from manufacturing an assembly with eutectic tin-lead solder; the lists of components used and materials specified will look very similar, although the part numbers will be different.

Typically BoMs will list not only the discrete parts used in an assembly, such as the board and the components, but also other materials that are used as a part of the process, for example solder and solder paste. BoMs sometimes show the amount of these materials incorporated in each unit of manufacture, having estimated the wastage. However, such information is usually not very accurate, and production managers tend to treat them all as ‘consumables’ that are purchased on a different schedule, either based on historical usage or at a reorder point.

Supplementary Information

This isn’t intended to be a manufacturing course so, in case you found the last three paragraphs hard going, we have explained at this link how an MRP system works, the way that it is used within the company, and what an “indented Bill of Materials” is.

Lead-free status

The key to successful lead-free is being able to identify with certainty the lead-free status of the assembly, and this requires knowledge of the lead-free status of both parts and process. In an ideal world, the route sheet for the lead-free assembly would be different from the tin-lead original, and all the component materials and consumables would have distinct numbers. This is fine, until we realise the amount of effort involved in making the change – every piece of manufacturing documentation has to be altered!

It is no wonder therefore that many people are looking for a “quick fix” that will reduce the amount of work. One suggested approach is that all incoming components should be marked at Goods-In with whether or not they are lead-free/lead-free compliant, and this information should also be marked on the assembly batch traveller. However, whilst making the lead-free status visible helps to increase awareness, it is not a total solution. And the situation is complicated by the fact that, on investigation, it will be found that many components already in store are actually lead-free, either because the component manufacturer changed the process without telling anybody, or because the part is intrinsically free from lead.

Quote

Thilo Sack, advisory engineer, corporate technology at Celestica, says all the upfront work is necessary. “In this new environment you almost have to treat every component as a custom part initially,” he says. “You can’t just take the parts for granted. In the past, you would never think twice about ordering a capacitor or resistor because those are Chicklet parts. Now you almost have to treat every part initially like a custom part and make sure that every thing is spec’d out the way it is supposed to be.”

The reason for the extra care is that a part can have a lead-free finish, but may not be compatible with a lead-free soldering process. “There is confusion,” says McDermott. “We are telling everyone at Celestica when you hear ‘lead-free’ from a supplier to determine what that actually means. A lot of things that are advertised today as lead-free might be the outer coating lead has been removed. However, there are a number of things that have to be changed like properties of the parts which allow them to be rated at higher temperatures,” he says.

Get the lead out! by Jim Carbone
Purchasing October 23, 2003

There is regrettably no alternative to examining each of the current part numbers and annotating its part record with information gained about the lead-free/compliance status of the component. From the point of view of the purchasing system, this means making a decision as to where to store this data in the computer records. Most systems have notes fields where text can be added, but it is probably better to generate new fields that contain the same information but which can readily be sorted and flagged, to make it easy to report on the lead-free status of a BoM.

 

Exercise

If your procurement manager asked you what fields to add to his part record in order to identify whether a component was suitable for lead-free, how would you answer?

see our comments

 

Overall, there is an enormous amount of work for the procurement department, and how easy this is will depend on the IT tools available and the structure of the MRP system.

Part numbering

Part numbers create both a challenge and a dilemma; to keep the same part number during the transition to lead-free, or to generate a totally separate part number? We have already looked at the differing attitudes of suppliers in Unit 10 “Identity, identity, identity”, but the assembler faces the same choice. Much will depend on the structure of the company part number, which we assume will be different from the manufacturer’s part number in order to accommodate the use of multiple sources.

 

Supplementary Information


A major influence on what an assembler does will be the practices of his suppliers. Would having unique part numbers help? And is this likely to happen? For a view from distributors, read the NEDA Distributors’ position paper on lead free product transition and RoHS compliance.

 

Some companies prefer “descriptive part numbers” where the informed reader can get enough information from the part number to know the type of component, its value, and other important parameters. Others prefer a totally sequential system, as they believe this reduces the chance of confusion between very similar part numbers. For example, the part numbers for a 1Ω chip resistor and 1kΩ chip resistor may differ by only one character in the middle of a long stream; looking the same to the assembly equipment, they may be interchanged by mistake on the assembly. Whereas a single-digit error in an arbitrary sequence would probably result in a reel of something totally dissimilar being issued from stores, when would be sufficient visual difference between the parts for a mistake to be readily obvious.

In most manufacturing systems, one part received from the supplier will correspond to just one company part number, but that part number will be used on many different assemblies. However, this is a perfect scenario, and it is quite common for there to be some degree of duplication, mostly because designers did not realise that the part that they wanted to use already existed in the stores. If descriptive part numbers are used, this is less likely to happen, but it is still possible.

There are also some companies whose practice is to buy components against specific orders, with the result that the same component may be held in a number of different locations and with different company part numbers. This looks like a less flexible system, but has the dual advantage of making it much more difficult for people to divert components between projects, and easier to assess the cost of stock bought for a particular customer. However, where components are committed, but the project aborted, such a system can lead to an inventory of parts held for several years, although these will probably have been charged to the customer. In all kinds of MRP systems, stocks held against dead projects very often surface during a physical check of inventory, when it becomes clear that the parts are available for use on other assemblies. But will these be lead-free?

Displaying status

Given the substantial difference in use between lead-containing and lead-free parts, in some companies it may be appropriate to make the lead-free status highly evident as a means of communication and not just for stock control. This is easier if there is some clear indication that the product is lead-free, for example as part of the part number. Depending on the organization of the stores, it may also be possible to segregate lead-containing stock. And the part record might be modified, so that the bag labels generated at Goods In clearly show the lead-free status. All depends on the exact detail of how goods are received, stored and recorded within the purchasing system and the MRP. One idea that would bear consideration is using a “traffic light” approach, where the colour immediately indicates the lead-free status of a component or assembly.

An additional requirement for the Goods-In and Stores areas is for the parts record to contain clear information on the moisture susceptibility of the parts. Of course, MSD levels are not unique to lead-free components, but the level of sensitivity is higher for lead-free parts on account of the elevated temperatures involved, as we saw in Unit 8, so devising a foolproof method of keeping components dry becomes very important. And the lead-free implementation team may need to provide additional dry storage. As well, of course, as making sure that everyone involved in the handling process is aware of the meaning of moisture sensitivity labels and what they need to do to protect the parts.

The “grey market”

Distributors are an important source of information about components, but care has to be taken when buying parts on what is known as the “grey market”, sources that become important during times of shortage in providing scarce parts from unattributed sources. Sometimes these are older components; sometimes they are excess parts from someone’s inventory; sometimes part of an auction lot; occasionally they are surplus parts diverted by the manufacturer to maintain a high price. In all these cases the supplier view may be “Them that ask no questions isn’t told a lie!”, to quote Kipling, so your procurement department needs to be aware of the dangers of buying unknown parts from such sources. When this course of action is inevitable, then it is prudent to institute a procedure for checking the lead-free nature of the terminations and verifying that the component will withstand lead-free processing.

Component obsolescence

Closely related with the grey market is dealing with parts that become unavailable. Obsolescence has always been a problem, especially for the long-running small-volume designs typical of defence projects. The transition to lead-free means that many components may be replaced by lead-free types, but there is also a possibility that manufacturers will decide to remove unprofitable parts from their lists. If this is a problem for your company, then the Component Obsolescence Group is a good starting point; for example, read The impact of RoHS on future obsolescence (COG News, April 2004).

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Processes

Lead-free processes are different in many different ways, as you will have discovered during your study of Unit 6 and your work on Assignment 2. We would now like you to think about what activities are needed at the company level in order to be able to introduce these processes.

Exercise

What is the sequence of activities that a company needs to go through in order to be able to introduce lead-free processes?

see our comments
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Equipment

New and modified processes may require equipment modification and upgrade or the procurement of new equipment. With lead-free, this is most likely to involve capital expenditure on wave soldering and reflow soldering equipment, and on hand soldering and rework stations.

The decision will be influenced by the financial health of the company and the state and age of existing equipment. Most high-specification equipment made during the past five years is capable of modification, albeit at a cost. However, retrofitting equipment takes it out of service for a period. Also, having once converted wave-soldering equipment to lead-free, it is difficult to move back again should this be needed.

For most companies, the decision will be to make sure that the reflow equipment can handle lead-free (in which case it can always be ‘de-tuned’ for eutectic tin-lead solder) but have twin processes for wave soldering. As wave soldering equipment is frequently the last item on the capital budget – it’s not very sexy! – a decision to buy new will often be needed. Not that “new to the company” necessarily means “newly made”; given the considerable downsizing that took place in recent years, there has been a lot of equipment on the second-user market, although this source is beginning to dry up.

The first consideration for buying new equipment is the specification required – size of board; throughput; process conditions; degree of automation; and so on. In most companies a view will have to be taken as to the forecast requirements, and all will be viewed in the light of the deals obtainable from suppliers. As with all equipment purchases, the supplier will need to be chosen with care, to ensure that service and spare parts will remain available, that the machine is reliable, and so on.

Typically, as part of the supply package, you will be looking for installation, commissioning and at least first-level training to be included. Even when buying second-hand, where these items are more likely to be extras, your financial justification should take into account the cost of getting the equipment to the stage at which is fully available for production. The format and content of the financial justification will vary from company to company, but typically a minimum return will be expected from the investment, though often this is expressed in terms of payback rather than ROI. Particularly with those larger items of capital equipment that are less than fully-utilised (and reflow and wave soldering equipment often come into this category), it can be difficult to devise a watertight justification that doesn’t factor in the adverse consequences to the company if an investment is not made and in consequence lead-free compliance isn’t achieved.

Transitional arrangements

One consideration that may inhibit smaller companies is that of the doubling-up needed when equipment is being installed, but is not yet proven, or when two processes have to be operated on separate equipment for an extended period. That creates a problem of space – both wave and reflow soldering machines take up a substantial amount of floor area. And don’t forget to allow space (and budget) for required ancillaries such as extraction and an area for assemblies to become cool enough to handle safely.

But not all duplicated processes need duplicated equipment; for example, both reflow soldering and printing can be carried out with alternative materials by appropriate set-up, although in the case of a printer a degree of cleaning-up is needed, and not just resetting the controls. In your planning, don’t forget that each set-up takes time and leads to lost production. You may need to devise strategies for minimising disruption, both by the organization and sequencing of batches and by reducing the time taken by changeover. Much attention has been given to this general problem within wider manufacturing industry, and you will find some interesting ideas if you search for SMED (Single Minute Exchange of Die – the concept was first used within the foundry industry). Even in electronics, careful attention to the way a line is reset between batches has been reported as cutting the changeover time from several hours to a few tens of minutes, with a corresponding improvement in productivity.

When running more than one process on a line, it is important to find ways of ensuring that mistakes are not made; for example, running lead-tin solder through a lead-free process may damage boards and components and result in unreliable products. Unfortunately, once assembled, the fact that components and solder may be inappropriate is not always immediately apparent. So you need to have clear work instructions and clear labelling. At the same time, some degree of “mistake proofing” would be desirable; there is more on what the Japanese refer to as “poka-yoke” at this link. Observation: making sure that the process is carried out correctly is an area where one could profitably involve the operators in generating workable ideas for preventing mix-ups.

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Planning and finance

Planning and Finance are very much involved in the lead-free transition, and will inevitably ask how much the project is going to cost.

Research

What is the cost of going lead-free?

Try a Google search for "costs of lead-free".

We found that Section 6 of the General purpose lead-free assembly system implementation guideline from HDP User Group was extremely helpful in indicating the many areas of additonal cost.

There are also some indicators in Bob Willis’s Lead-free Cookbook.


Last revised 12 September 2004

 

There is no simple answer to the question, as much will depend on the products made by the company and the type of customers it services. But there are substantial costs, many of them hard to quantify because they relate to effort by support staff.

Another of the questions the team should anticipate early in the programme is the question “Who is paying for the change?” DTI tried to estimate the total cost of the change for the UK as a whole, and their consultants’ report came up with a figure for meeting the WEEE Directive in the range £217–455M1. Note that this report is billed as a “partial regulatory impact assessment” and is associated with WEEE; lead-free compliance has not been directly costed at this stage. One feels intuitively that many peripheral costs, such as writing-off old stocks, procuring lead-free components and optimising the processes, will never be fully included in DTI estimates.

1To put this figure in perspective, automotive market analyst Autelligence reported in June 2004 that they had calculated the cost of the End of Life Vehicle legislation (which will be fully retrospective when introduced in 2007) to be £300 per vehicle, with a potential collective ELV Directive liability of over £13 billion arising from the 20% of vehicles more than 12 years old!

 

The truth is of course that the bulk of the cost has to be borne by the company. For larger consumer goods, there has been some debate about passing on the costs of Producer Responsibility for product take-back and end-of-life disposal, and some acceptance that there may be a small additional price to be paid. There has also been quite a lot of interest in setting up collaborative ventures, aimed to spread the cost of collection and recycling, but of course these focus on WEEE objectives, rather than on RoHS compliance.

Moreover, the pressures within the electronics industry for greater functionality at ever-decreasing cost mean that real price increases will prove hard to obtain. So the infrastructure costs of lead-free need to be covered within the everyday running of the company, and any additional cost in materials needs first to be resisted as far as possible (where the cost is a direct charge from suppliers), or else recovered by improved efficiency.

This somewhat depressing market situation leads one to the inevitable conclusion that, in order to be generally acceptable to the management within a company, a lead-free implementation project has to be accompanied by a real attempt to promote efficiencies in other areas in order to pay for the exercise, as well as justified on the grounds of the company’s continued existence in a lead-free world.

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