Electronics Makers Serving Up Half-Baked Gadgets?

Keep an eye on quality

There’s an interesting article (link courtesy of CNN) the other week about the rash of consumer electronics that are being shipped to end customers with minor (and at times major) deficiencies in functionality.  An important quote from the article reads “Often, companies launching complex hardware-and-software packages are forced to make compromises in order to meet deadlines,’ said Harry Wang, a mobile analyst for market research firm Parks Associates.”

It’s crucial for test data engineers to keep this development in context: if businesses find a quantifiable value in rushing production schedules before a product is fully polished, then it’s important to maintain a steady grasp on your component quality trends before they ship for final assembly.  If you aren’t paying attention to your SPC and quality data as the components are being manufactured, there won’t be any second chances or cushion time before the product is in the hands of the consumer-and, unfortunately, test data engineers will inevitably have to shoulder much of the difficult and time-consuming recall and warranty return processes triggered by such an inflexible timetable.

Upcoming IntraStage Versions

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I just sat in a product roadmap meeting for IntraStage versions 4.4 and 5.0, and it looks like we have some exciting changes coming.

The development team has been busy soliciting design changes from our customers, and they’ve been working on some significant modifications and improvements to the IntraStage solution.

Stay tuned: we can’t say too much more yet, but we’ll give some details closer to the V4.4 and V5.0 release dates scheduled for later this year.

Cisco Implements homebuilt Test Data Management Solution

In 1994 Cisco System’s Manufacturing Team announced the strategic intent of being the undisputed world leader in Supply Chain Management. By 2001, Cisco had implemented a ‘virtual factory’ in which almost every function of production and fulfillment was performed through an outsourced network.  These functions included Parts Procurement, Material Management, Sub Assembly Outsourcing etc.

In 2010, Cisco began to roll out the next phase of this virtual factory through an internally developed software solution called Cesium. Cesium allows the Cisco Manufacturing Team to connect virtually and tap into the manufacturing data of thousands of suppliers and manufacturers to achieve real-time visibility into quality trends.  Cisco says that it can respond more quickly to quality trends and events with access to accurate quality data from its supply network (source Managing Automation April 09, 2010).

Cisco has no plans to market Cesium as a commercial offering, though they do recognize the advantages of maintaining such a solution. “We see quality as a competitive advantage for Cisco,” said Roger Bhikha, Cisco’s Senior Director of Systems and Component Quality. In addition to improved data-quality collection, Cesium is expected to improve Cisco’s component-level compliance and traceability by 20%.

As Cisco realizes the benefits of connecting to their Supply Chain with an automated data collection, analysis and database solution other companies do not necessarily have the financial and human resources required to develop an internal solution.  IntraStage can provide a proven, off-the-shelf alternative for those companies which desire a quick, less costly solution with comparable features and capabilities.

Firefighting Quality Problems at Contract Manufacturing sites

 

Inevitably as trust builds over time between  OEMs and contract manufacturers, there are  and can be specific times when it can be  strained. A particular problem may come up in  New Product Introduction (NPI) or during  steady state production which involves some  heavy conversations on both sides to resolve  the problem.

These problems become serious “firefighting” situations when time-to-market is delayed or shipments are being held up to important customers. Critical problems like low yield and critical quality defects are the main culprits in these firefights.

The process for most companies caught up in this whirlwind is to engage R&D, Manufacturing, Quality etc people from both sides in Kaizen or committee settings to rapidly root cause the problem. This would take the form of large meetings and frequently key people would be flown to the problem manufacturing sites.

With a typical North American domestic business trip expense of $1000 (source American Express 2009 Annual Global Travel Forecast) and international trip expense of $3400, these trip costs can quickly add up. This does not even include the daily loaded cost of employees for these firefighting sessions which can be on average $1000/day. A typical issue can easily run into the tens of thousands of dollars in costs for an OEM and contract manufacturer to diagnose, fix and verify.

I suggest that increased visibility of key product data such as yields, test runs etc can significantly reduce the cost of this resolution process. Providing access to this information would engage the right persons, at the right time (typically teams are engaged across different time zones) and allow for better collaboration across the sites eliminating travel.

Harsh Wanigaratne, IntraStage

Finding the Right Balance

The supply chain is getting deeper and more sophisticated for electronics OEM’s, but I’m not sure that the transparency is improving in either direction.  Most OEM’s are still unwilling to truly share roadmaps and plans with outsourced partners, due to concerns that vendors might use the information “against them”.  Most companies still don’t trust outsourced vendors the way they trust internal employees, which is ironic since these vendor-customer relationships tend to last over five years while the average employee retention is less than four.

Outsourced vendors are often afraid to be transparent – whether it is about their part quality, about their profit margins, about their capacity, or about their own roadmap.  Contract manufacturers, for instance, have often been treated as an easily replaced commodity, which has led them to focus on low prices – often with hidden or unintended sacrifices in quality.  From a CM perspective, what the OEM’s want is impossible – the lowest prices and full transparency with perfect quality.  Although OEM’s say that they want everything, most vendors believe that price is paramount.  Due to the pricing pressures, there are often bad business decisions made which impact quality, lead times, or communication.

As Edward Marshall said, “Speed happens when people…truly trust each other.”  And the electronics industry is all about time to market and deeper supply chains.  Those companies who figure out how to trust their suppliers (and vice versa) will have a competitive advantage.  Tom Peters, well-known business consultant, put it best when he said that “Trust is the issue of the decade.”

But trust, like quality, can be hard to quantify.  As such, it can be difficult to make financial decisions around trust and quality.  For example, one CM has bid a price of $100 per unit, but they have had quality issues, and we’re not sure how much we trust them.  The other firm, that we trust to deliver high quality on-time, has a price of $150 per unit.  Who should we pick?  How do we quantify the “trust premium” and the “quality premium”?  Stephen Covey, in his book “The Speed of Trust”, tries to answer this question in detail.  But he starts with a bottom-line, quantifiable formula involving trust:

When trust goes down, execution is slower and cost goes up.
When trust goes up, execution is faster and cost goes down.

I believe software technology can only solve some of the issues.  Technology can’t solve the problem of getting OEM’s and CM’s to agree to a transparency mindset.  Once they have that mindset, though, software technology can enable them to communicate faster, with more transparency, letting them find quality issues sooner and solve them faster.

Sincerely,

Patrick Kelly, CEO IntraStage