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Scenario for Assignment 1

A work of fiction!

Please be assured that this scenario is intended not to reflect the products, processes and management styles of any particular company, but rather to be a composite of many companies, so that it can bring out a wide range of learning points. So don’t be tempted to recognise yourself or your company in our description; as it used to say on the cinema disclaimer “Any resemblance to actual people, either living or dead, is entirely coincidental”, or words to that effect.

The company

Advanced Manufacturing Services (AMS) is a typical small company in the electronic manufacturing services sector. Founded during the 1980s, AMS is still run by the founder, though the team has changed somewhat. The company started in hand assembly of PCBs, carrying out harnessing and box build. AMS grew quickly, and automated their through-hole assembly process. The first surface mount components were placed in the early 1990s, and the company has since invested in medium-scale surface mount manufacturing equipment.

As with so many such companies, the availability of capital has varied according to the company’s fortunes; although the company is now growing again, the recession in recent years has meant that wave and reflow soldering equipment, though well maintained, is not of the latest standard, priority having been given to printing and placement in order to meet needs for efficiency and for higher-density designs with more complex components.

Products and services

There isn’t a typical AMS product, in the same way as there isn’t a typical customer! AMS’s good reputation for quality, combined with a flexible approach to meeting delivery and technology requirements has meant that customers have stayed loyal. As a result, the company now has 30 customers, some of whom date back to the early low-technology, low-volume days, whereas more recent customers have requirements in higher volume and for more complex parts.

The board assemblies made by the company vary widely, both in technology and volume. Typical batch sizes are up to 50, but two of the surface mount lines can be run end-to-end to give a flow-line capability for larger orders.

The assembly of boards into enclosures uses a variety of skills: the materials are mostly bought in, but many of the specialist harnesses are made in-house. Box-build may take many forms, for a volume product just fitting board assemblies and ancillary units into plastic enclosures, but there are also some card frames with backplanes, and environmentally-sealed enclosures for one high-reliability customer.

As well as manufacturing new products, AMS carry out a range of repair activities. For many customers they repair and rework assemblies returned from the field and are considering offering this as a contract service for other customers and for boards not manufactured by AMS. As the factory data entry terminals made by AMS frequently need refurbishment, replacing enclosure and switches, rather than electronics, AMS already have a thriving line where the main issues relate to controlling the flow of goods and packaging.

Technology

About 60% of AMS assemblies have surface mount components on both sides, assembled using solder paste and reflow. However, given that many of their control and instrumentation customers run older designs, some designs restrict the underside to chip components which are glued and wave-soldered at the same time as the through-hole parts.

A very wide variety of through hole components is used and, where volume allows, axial and dual-in-line parts can be machine-inserted. There are also laser-assisted hand assembly stations with clinching mechanisms. Parts that are retained in this way can be wave-soldered, a process that is usually followed by aqueous cleaning, ‘non-wets’ are inserted by hand and hand-soldered using solder wire with a no-clean flux.

For box build, some press-fit components are used for backplanes, but most work is hand assembly. However, a number of designs with heavy terminals need to be soldered with heavy duty irons. Some of the specialist connectors are crimped. All-in-all, almost every assembly technology that one could envisage!

The quality department have set their in-house build standards slightly higher than IPC-A-610 for soldered assemblies, and refer to IPC standards for board fabrication and box build assembly.

Components

The wide variety of through-hole parts has been mentioned, though these are mostly for legacy products. Included are some specialist modules with hermetic packages and glass-to-metal seals. There is the expected high number of connectors and a number of large inductive components that need to be physically anchored to the board as well as soldered.

As well as these chokes and transformers, a number of preassembled modules are purchased, mostly for power supplies and mains filter assemblies. There is continuing dialogue between procurement and manufacturing as to whether modules should be purchased or made in-house, and the debate extends to some of the very simple daughter-board modules made for instrumentation products.

Boards

For surface mount, the bulk of the boards purchased are in FR-4 material with 2-6 layers and 1.6mm thick with external conductors in 1oz (35µm) copper, and solder mask over bare copper (SMOBC) construction. However, some of the simple modules use FR-2 stock, more complex multilayers use up to 12 layers, and thicker boards are used for backplanes. In addition, some of the newer high-density designs are now being specified on thinner laminate (down to 0.8mm thick). At the other end of the spectrum, although the volumes are small, some designs use boards as big as 300mm dimension – these can only be handled by one of the lines.

As well as rigid assemblies, AMS has some experience with flexible circuits, but these are mostly used for interconnecting rigid boards and bought-in as components.

Board finishes are equally split between tin-lead HASL and ENIG, being dictated by the customer. AMS has had some poor experience with ENIG reliability, and in consequence has evaluated the use of OSP as an alternative flat finish for fine pitch. They have, however, reported some problems with life expectancy and double-sided reflow.

Most boards are made to order and consumed quickly, but some customers have call-off orders where it is more economic to buy a year's worth at a time. Others have legacy requirements, where AMS may be asked to hand-craft assemblies using very old boards and components.

Customers

AMS customers sell mostly to European end-users, but there are some global players, servicing a range of markets (including one company selling a sophisticated consumer item to Japan) and several based in the USA and Canada.

The range of products is equally diverse, with some specialist consumer products, computer peripherals (high-end plug-in cards), and a supplier of in-car entertainment. However, the majority of customers are in control and instrumentation, producing such items as telecoms test equipment and factory data entry terminals,. Certain products are designed for remote signalling of information and thus have to meet almost telecoms requirements – certainly there are RF modules associated with these.

Given the reputation for reliability that AMS has, it is not surprising that some of their customers supply certain of their products into defence applications, although AMS are not always aware of the end-user. However, their sales team has just uncovered interesting potential for direct sales to the defence market, given the heightened security situation.

Commercial issues

A typical customer ‘tries out’ AMS before developing a more permanent trading relationship. For this reason preliminary orders are frequently ‘build-to-print’, with free-issued components. Once trust has been gained, AMS seek close partnerships, especially with key customers, and offer assistance with Design for Manufacture issues and part sourcing. Typically communication is between the AMS engineers and the customer's production departments, with regular meetings to discuss problem areas and the introduction of new products.

AMS normally procure all the components, although prototypes often use stocks of specialist parts procured direct by the designer. For ongoing work, AMS is not big enough to deal direct with component manufacturers, except in some specialist cases, and buys mainly from distributors. When timescales get tight, and components hard to get, use is also made of the grey market’.

Typically turn-round time from receipt of order to dispatch is of the order of four weeks, including the procurement of components, but longer-running contracts frequently run over a 12-18 month period to allow the purchasing department to carry out an effective job. The store runs a strict FIFO regime, but the tendency to buy extra components to ensure customer receipt of the full number of assemblies means that some of the parts in stores can be quite old.

AMS are not in control of their customers' development activities, although they are often consulted. The timescale from initial concept to volume production varies greatly between customers, and may take as much as two years. A number of products are long-running, and in all around 80% of current designs are expected still to be in manufacture in two years time.

Proud of its quality image, AMS offer a one year warranty on all assemblies shipped, but in practice it is their policy to support all field returns however old, and for some products the company is committed to give five years support after end-of-run. As components tend to be made obsolete by their manufacturers, this influences AMS’s stock-holding.

Whilst AMS normally prefers to carry out the work in house, some customers (principally those in remote locations) will perform upgrades and repair failed products in the field.

So far, only two or three customers have enquired about lead-free, but one of these was a major customer who had recently received a corporate directive to go lead-free. This has stimulated an awareness of lead-free at AMS, if not among the majority of their customers. However, AMS feel that their customers as a whole will be reluctant to change, especially customers in the defence industry, who are inherently conservative, those with products that use older technology and have no performance requirement requiring redesign, and one customer whose products use very special components that are difficult to obtain in packages other than the plastic dual-in-line outline in which they were first made.

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