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Electronic New Product
Development and Cost English
1 of 21 8/7/2017 12:52 PM
Electronic Product Development: Manufacturing cost estimation http://quality-manufacturing.org/electronic-product-development-product-...
requested from our clients the following: "Can you tell me what
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will be the cost of my product if we develop and manufacture
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it".
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Those people who come to me, generally have nothing else than
just a few scheme drawn on a piece of paper or sometimes luckily
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made a few 3D rendering of what they hope to build.
automatically
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Their request is legitimate because indeed, unless you plan to
target a very special niche market or to position your product at a
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high end level, there is no use to develop and attempt to
manufacture a product if your product is going to be over priced
face to the competition. Subscribe
Well the simple answer would be to sum up all the costs required to GET INFORMATION
manufacture your product.
C./ ACCESSORIES COST (I will not talk about this one because in this
blog post becaue this is very basic and obvious)
D./ PACKAGING COST(I will not talk about this one either in this
blog post)
RECENT POSTS
E./ FINAL ASSEMBLY COST
8 Product Testing and
F./ LOGISTICS COST Certication in China related
Tips you should know
G./ MARGIN PILLING UP TROUGH THE SUPPLY CHAIN AT EVERY
PROCESSINGSTEP (SINCE EVERY PROCESSING INVOLVE A Product Development &
STAKEHOLDER, EACH OF THEM WILL HAVETO EAT A BIT PART OF Manufacturing in China:
2 of 21 8/7/2017 12:52 PM
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Let's take one by one each categories and enter into details:China
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A./ ELECTRONIC PARTS COSTING
Solve Quality Issue in China
Manufacturing & Production
Usually there are two or three types of elements to consider when
trying to calculate electronic part costing: Why you should involve
engineering team during
a./ PCBA (Printed Circuit Board product design phase
Assembly)
CATEGORIES
This is the backbone of the electronic product. It hosts components
and ensure connection between them. It is made of two types of
Inspection & Quality Control
sub-entities:
Lean Manufacturing
Logistics & Shipping
3 of 21 8/7/2017 12:52 PM
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Printed circuit board is the board that host all the components and
allow to connect them all together so the system can run properly.
4 of 21 8/7/2017 12:52 PM
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the "A" in PCBA stand for "Assembly"
You have your PCB board one side without components, and you
have your components on the other side without PCB board. Now
you need to assembly them together, so all the components can be
connected.
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To quote PCB Assembly cost, you need to have the bill of material
of the electronic already done, with associated packaging and
subsequent number of legs of each components so you can
compute the cost of assembling each components on the PCB.
In your PCBA cost you then need to add components cost, PCB cost
and this PCB assembly processing cost.
Here again, can we expect the costs of those parts to add them up
in the total, yes as long as you have identied those parts early on,
which again takes time because the same way you made it with
electronic components, you will face many dierent kind of
manufacturers for those parts with many references of parts for
each manufacturer you choose.
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a./ Raw materials
For metal materials, you really need to pay attention to the grade
used because for example a stainless steel 304 is not same than
stainless steel 316. Some may rust and get alterated by corrosion
faster than the other.
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Metal materials can also have dierent grade, hence diernt price
for the same material type
So, to the question: "Can you estimate the cost of the part of my
product without having a CAD le ?" my answer is usually : "NO"
I will not talk about all the dierent kind of material you can nd
because it is too much exhaustive, I will only talk about the two
most common one:
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1./Plastic
There are dierent way to shape plastic, but the most common one
is to inject it because it allows to make some complex shape at low
cost. Plastic injection is very commonly used in China. Normally in
this processing cost, you have to consider the time it takes to
produce the part, the times it takes to setup the machine for your
production, the time it takes to inspect the parts, the waste
produced for each batch (as there are always some defectives
which get rejected), and all the other cost (such as the electricity
consummed by the machine).
2./ Metal
For metal parts, there are several manufacturing technics that can
be applied, but most of them are usually in 3 categories:
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on the shape we want to achieve. one of the most used
technic is called progressive die stamping where a stip of
metal sheet is moving forward one step by one step in a
tooling where each step is performing one specic action.
Most of the metal part you nd in our daily life are made this
way (connector legs, etc...)
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13 of 21 8/7/2017 12:52 PM
Electronic Product Development: Manufacturing cost estimation http://quality-manufacturing.org/electronic-product-development-product-...
In any case for all those process there is a certain cost which is
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associated with machine cost usage and labor cost.
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So, can we estimate the cost of a part accurately without having the
mechanical design being done? I usually would say "not really", the
best that can be done is a rule thumb or by random guessing. It is
extremely dicult to evaluate the cost of a part without having a
drawing or somthing with date.
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For example, let's say you have not optimized your design: your
product count 10 mechanical parts to assembly and it takes 10
seconds for each steps, total 100 seconds to assembly your
product.
Now let's say, I take back your design and I optimize your
mechanical design by performing DFM (Design For Manufacturing)
and DFA (Design For Assembly) process, so it allow me to reduce as
much as possible the number of parts to assembly: Now you may
have only 5 parts to assembly instead of 10 and it still takes 10
seconds. Total assembly time: 50 seconds instead of 100 seconds. I
have directly reduce your labor cost by 50% just by optimizing your
design.
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2./ During the production via an IPQC (In-Process Quality Control)
to verify that product is assembled properly on the production line
and to catch mistake early.
3./ At the end of the production via an FQC (Final Quality Control) to
verify the product is indeed assembled properly. This quality
control can also include some testing (functionnal testing, aging
testing, etc...).
4./ Inspect parts of the product before they get shipped from the
sub-supplier (mechanical parts manufacturer, PCB, components,
and PCBA manufacturer) to their warehouse. This can be done via
Pre-Shipment Inspection or a During Production Inspection
All those activites are time consumming in labor cost and require
skills, (not just some basic workers), so it remains a cost.
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prototype.
Those costs are prot margin taken in the supply chain by the
dierents stake holders who are involved in this chain (yes,
everybody need to eat a part of the cake because nobody work for
free).
There is no general law to predict how much each stake holder will
take at dierent steps of the process, but what is sure is you have
to pill them up to complete your product cost estimation at the
factory gate.
E./ LOGISTICSCOST
You have taken note that in the product fabrication chain (supply
chain) of your product involves several stake holders. Guess
what,hey are not working in the same room. Some of them are
located potentially several thousand kilometers from each other.
Materials, parts have to be sent from one supplier to the other to
be processed or assembled, in China this is usually made by truck.
Those trucking are not free and have to be taken in consideration
in the price cost of your product.
How to know those costs ? Well you need to know the stake holder
rst and where they are located, once done, you have to compute
all the link between each other and compute the cost for trucking,
loading, unloading and you also have to take in consideration that
goods or parts may be damaged during transportation (because it
17 of 21 8/7/2017 12:52 PM
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Conclusion
Estimating the cost of a product not existing yet without having no
engineering done is not very easy, rarely accurate and quite time
consuming.
electronic
cost
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