Advice: assemble in house or not? - Page 1
Forum section: electronics / general

author: AlexI
author_rank: Contributor
timestamp: October 31, 2019, 01:44:54 am
content: I'd like a sanity check on whether it makes sense to assemble boards in house in my scenario.Background: I'm technical lead in a very small company which makes just one product. Annual volume is 50-100k for the next year. The electronics going into this is one board with fairly simple specs: it's 30x30mm, 25 bom line items, 60 placements, 0402 or larger, a few SOT323s, a few 0.5mm pitch QFPs. No 0201, no BGAs, etc.We have been manufacturing these at a local assembly house in the SF bay area which charges about $10 per board for assembly with 1k batches. That's obviously not a long term solution since it adds a huge chunk of the total product cost. I've gotten quotes from some lower-cost offshore assemblers at around $1-$2; no idea on the quality. Macrofab would make this for around $3; quality seems consistently good there.We have automated test for this; all functions of each board get 100% tested by us after receipt (but it wouldn't necessarily catch stuff that leads to delayed failures, of course). So the risk of letting a bad batch slip through unnoticed is smaller, I think we can to some extent just use the lowest cost supplier.The question: does it make sense to set up an in-house production line for something like this?This seems to be a pretty extreme case of "low mix"; the line would literally never have to be reconfigured as it will be cranking out an exact copy of one board forever. It doesn't have to run fast either; I think even a 2000cph machine running one shift/day would be fast enough.The main reasons to do this is not even necessarily cost - I'm not at all sure that this will overall save money over the $1/board assembly house option - but rather risk; risk that a large batch of boards would come out defective, risk that we won't have product in time due to some type of screwup with the assembly house, risk that they use counterfeit parts, etc... If the assembly is local, they would own the problems (and they have in the past - we had low yields, they reworked the bad boards for free). If the assembly is a cheap overseas company, I really doubt they would do anything about it; we'd probably have to eat the cost of rework and/or parts if a batch is bad. That can become a pretty big problem if we run large batches (which we would want to for lowest cost). It is also nice to be able to stock parts rather than finished boards, and build them as needed to fill larger orders; less need to plan ahead. (* That said - if we don't save money over the current $10/board, we must be doing something very wrong)Now the downsides: (a) We don't have any expertise with doing this sort of thing. We are a tiny company (3 people+consultants) and I'm the most technical person here, but much more on the R&D side than production side; I'm fairly familiar with SMT processes, and I've built a number of prototype boards myself (the hand pick and place and toaster oven way), but I haven't run a production line (and really wouldn't have time to). We'd have to hire staff (part-time or full time? how many?) We'd also need some good resources for fixing things when things go wrong (smt equipment dealers? some kind of smt line repair-person?) (b) We don't have a facility where this can be hosted yet (how much space? I'm guessing +/-1000 sq ft). It's not necessarily a huge production line, but it is a production line and needs some infrastructure around it.So, with all that in mind: should I (a) shop around for a good mid to high volume manufacturer and develop a relationship with them, or (b) look at used SMT equipment, and folks to run it? Or, perhaps, considering how daunting it is setting something like this from scratch, am I insane for even thinking about it?

author: Gribo
author_rank: Frequent Contributor
timestamp: October 31, 2019, 01:59:24 am
content: These risks are the same if you do it in house. but now you have to pay for them, not your CM. Fakes, bad batches, reworks happen everywhere, even on tier 1 CMs. Move out of the bay area, there are CMs in far cheaper places in the US, Canada and Mexico.

author: AlexI
author_rank: Contributor
timestamp: October 31, 2019, 02:13:54 am
content: Hi Gribo - Of course, same risks everywhere, it just seems if they were in house we would be able to proactively do something about it.Experience with one of the last batches - to give you flavor: CM said they'd do it in 3 weeks; at week 3 told us some parts are back ordered with 12 week lead time; we found the missing parts and consigned them, got actual product in 7 weeks; then 80% yield; took about 3 more months to fix the remaining 20% bad boards after we found the cause and showed them the fix. Every single build is like this :[Cheaper CMs - certainly, I've done some shopping around. I don't really know that any of the folks that we'd want to work with (in terms of scale, capability etc) would be particularly interested in working with us; as a single low/mid volume customer we're just not that important to them. At our current CM we have no leverage at all, we're 0.1% of their business. At someplace like AllPCB, it would likely be much worse than that. As for Flex/Jabil...I think you're saying different/better CM is the answer. Which one - any recommendations? More generally, what to look for?

author: OwO
author_rank: Super Contributor
timestamp: October 31, 2019, 02:22:43 am
content: Quote from: AlexI on October 31, 2019, 02:13:54 amGet a more competent assembly house. 80% yield is REALLY bad, and if there are soldering defects you can have latent failures in the field. Not to mention they are really overcharging you for a tiny 60-part board. I have a board with 300 placements, 60 BOM lines, double sided placement, fine pitch QFP and QFN, and I pay around $14/board at 50 units per batch. Last few batches had zero defects. They claim to do AOI, which you should expect at this price.

author: OwO
author_rank: Super Contributor
timestamp: October 31, 2019, 02:33:15 am
content: If you decide to use an overseas assembly house make sure to plan the whole process - make sure they can test the boards themselves without having to ship it to you. I built a simple test jig which I shipped to the assembler along with sample boards so they can easily check for mistakes in parts orientation. Before every batch they will also manually assemble one prototype based on your design files. This will catch errors in the BOM (happened to me once). Make sure to pick an assembler with these services.

author: Reckless
author_rank: Frequent Contributor
timestamp: October 31, 2019, 04:10:42 am
content: As much as I like doing things in house, for that volume I would outsource it.

author: AlexI
author_rank: Contributor
timestamp: October 31, 2019, 04:22:16 am
content: Hi Reckless - Appreciate the advice! Could you expand on that a bit - is that "for that volume" because it's high or low volume?What kind of company should I look to outsource to?Also, what do you see as the benefits of doing things in house in general? What decides if it's worth setting up the capability?I think this is just high enough volume that a "high mix" type of assembler is not a great fit (too expensive + can't seem to just nail down the process from batch to batch); but on the other hand the really high volume factories seem to want to do millions of units per year, so this kind of ends up in an uncomfortable medium-high kinda middle ground. I've only worked with assemblers that specialize in prototyping, using them for this kind of thing is not great but I don't really have a go-to CM for this.

author: AlexI
author_rank: Contributor
timestamp: October 31, 2019, 04:24:14 am
content: Quote from: OwO on October 31, 2019, 02:33:15 amSolid advice, thanks. Our full test is probably too slow, it would have to be sped up a lot (and made more user friendly) for it to be done by the assembly house. Something to work on

author: Gribo
author_rank: Frequent Contributor
timestamp: October 31, 2019, 03:09:09 pm
content: One more thing for the overseas approach - you should have your own local person there, and not rely only on the CM. 80% yield is horrible, does your CM do also the testing? You can move the testing to the CM, this way they can close the loop there, and not send products back and forth.

author: Brutte
author_rank: Frequent Contributor
timestamp: October 31, 2019, 03:41:22 pm
content: Quote from: AlexI on October 31, 2019, 01:44:54 amStart an in-house line that fulfills 70% of your pesimistic scenrio (35k/year) and outsource the rest to 2 or 3 CMs. On regular basis terminate the cooperation with the most problematic CM and pick a new, random one.

author: SMTech
author_rank: Frequent Contributor
timestamp: October 31, 2019, 04:10:54 pm
content: $10each excluding parts in batches of 1000? That does seem a little high, that is what we're charging for a boards 3-4 times as complex in batches of 25.80% pass rate is very low, I would suspect the CM would agree and it would normally be worth sitting down with them and working out why faults were that high. Obviously things can go a bit wrong on first batches if documentation is a little weak (either theirs or yours) but we (and I hope others) would normally do a smaller test run before just running 1000 unless all concerned were happy the design was signed off working and there was a sample.Your board as described is small with quite a low component count, this lends itself to being put in a decent sized panel which in turn reduces handling time/PCB and helps placement happen nice and quick. Even a fairly modest machine is clearly knocking these out at <minute per PCB so unless there are significant steps after SMT your paying for that plus some time to inspect, break up the panel and pack it. You presumably have a figure for what you would consider a workshop rate which lets you do the math.As you say this is a very clear low mix assembly if you bring it in-house, combined with the low component count it would appear perfectly suited to the Chinese machines but you certainly would be wanting an automated inline (conveyor) system to make it as hands-off as possible. That way the person running the line can easily be doing something else. I run an offline high-mix setup, meaning I can only do very basic tasks while running assembly - email, tidying up the last kit etc. I suspect its a bit of a fringe case you could argue either way, 100K is quite a big number, but turn that into a 25up panel and its really not that many/month. However I would check your numbers, 6million parts/year + stoppages, holidays, sleeping and the fact machines do not run as fast they claim to me means you need something about as quick as our Essemtec @ 4-6kcph and even then its liable to be kept fairly busy.Fakes do happen but you really shouldn't be seeing them unless you or your supplier is going out of their way to save money to get hard to come by stock, the first kind of penny pinching is asking for trouble and the second you should only do in conjunction with a testing house that checks the parts before you fit them.

author: Reckless
author_rank: Frequent Contributor
timestamp: November 01, 2019, 05:51:28 am
content: Quote from: AlexI on October 31, 2019, 04:22:16 amAlexl,If you are feeling adventerous, I can sell you an automatic mpm stencil printer, universal gsm pick place machine (0402 capable), conveyors, feeders and vitronics reflow oven for $14,995 + shipping. You would need to setup/install on your own.My reasoning for discouraging has more to do with headaches of manufacturing. In some cases its better to pay for someone else to handle the headache. At $10/unit I would definitely do it myself. It is fun but can be a headache to hone the process perfectly. I personally like the feeling of being self sufficient and not relying on others. I have never dealt with american cms so I can't comment properly on them. Not everyone is properly inspired to take on major projects. I call myself crazy but I like doing mission impossible. I like hardwork, sweat and achieving. Most americans prefer other people doing the work for them. It is cool to have your own smt assembly line that would have cost $1-2+ million 20 years ago. I was in high school and my dad would show me SMT machines like they were hot rods and out of reach (we shared them at contract facilities with nickelodeon/panasonic).

author: AlexI
author_rank: Contributor
timestamp: November 02, 2019, 05:42:04 am
content: Hi Reckless - Thanks for the offer! Good to know; I looked up all the gear you mentioned.I think I've pretty much decided that we just don't have the capability to handle something like that in house right now or in the near future. Aside from the up front cost, we'd need 1-2 people dedicated to this full time (who already know what they're doing - at least I'd hope so, since I don't really have a clue). I imagine the annual maintenance/repairs on the gear you mentioned can run up to a nice total total too.On the other hand, the outsourced assembly costs are insanely low: if shopping around, I'm getting quotes of $0.003 per pad / $0.01 per component, and some which are as low as $0.0015 per pad. That's $60k for our entire annual production volume. Yeah, there's no way we'd come close to that, even if the gear is relatively affordable.Anyway, it was good to explore this. I think looking at what setting up an assembly line involves will make me a better designer; among other things, I'd avoid 0201s and BGAs even more, and try to keep the number of BOM line items to the absolute minimum

author: Reckless
author_rank: Frequent Contributor
timestamp: November 02, 2019, 12:40:32 pm
content: Annual maintenance repair is minimal, possible near zero as these are good machines with tons of spare availability. Also, for your runs you can hire people part time. I find locals want a second job as they like the work. Your job will take 1-2 days max a month.Outsourcing is the easiest solution. Having your own assembly line is priceless. Once someone shows you the ropes, you can do it yourself. Makes it much easier to add new models going forward.

author: Styno
author_rank: Regular Contributor
timestamp: November 03, 2019, 09:28:38 am
content: I agree that having a line yourself has it's merits, even if you do not run huge runs (maybe especially then!). We have gone that route. But keep in mind that the whole process of setting up the machine for a specific job from CAD to placement files and feeder setup) can be pretty time consuming and that rolling your own will quickly double your investment in e.g. the used hardware offered by Reckless, or more. You haven't finished investing when the hardware is installed.Depending on your type designs you should also consider the capital locked up in components on stock. E.g. we use some very specific and expensive components with huge lead times and for business continuity reasons we keep at least a half year worth of sales in stock on site.

author: ANTALIFE
author_rank: Frequent Contributor
timestamp: November 13, 2019, 05:33:54 am
content: Hmm you say you guys are 0.1% of your assembly house businesses, to me it sounds like your assembler is not the right size for you. I would recommend looking for a smaller assembly house, much easier to have some push back if you do have any issues with the productAlso as others have said 80% failure rate is quite high. Sounds like you need to have a good sit down with your current assembly house (make sure to do this before you make the jump!) and see what can be improved to increase the pass rate. For example:Do some PCB footprints need to be updated so that components don't have issues during reflow?If using big copper planes are they balanced so that PCB bow is reduced during PCB fabrication and reflow?Are components too close to edge and are getting knocked off during depaneling?...

author: jmelson
author_rank: Super Contributor
timestamp: September 06, 2020, 03:26:49 pm
content: Quote from: Styno on November 03, 2019, 09:28:38 amI run a small OEM shop, not contract assembly. I do anywhere from 10 to 100 boards at a time. I have been using a Philips CSM84 machine, about 25 years old. I've had it for 13 years. I can set it up for a run of boards in less than an hour, if I have done those boards before. I just download the files from a computer, pull the reels of parts from boxes and load onto feeders and place in the right position on the machine, and press "run". I have a homemade frame for paste printing and a converted toaster oven for reflow. I've done over 2000 boards with this setup.I just bought a Quad QSA-30A at an auction and am in the process of getting it running. It will be interesting to see if it makes this easier or not. (Old machine had no vision, new one does.)My 1995 Philips has had almost no electronic issues ever, but a few mechanical ones, some caused by my mistakes. The ~2000 vintage Quad has a lot wrong with it, possibly caused by idiots at the prior owner putting wrong parts in, taking things apart and 'letting the springs fly out" etc. We will see how reliable it is once I get all that fixed.JonJon

author: Styno
author_rank: Regular Contributor
timestamp: September 06, 2020, 07:10:21 pm
content: At 100k/yr you are talking about a board per minute all year long. Applying paste, keeping the PnP fed with reels, testing, parts procurement, this all takes manpower. I’d guess at least 2 ppl. At the -no doubt- high SF wages, you’re talking about at least $100k/yr, or at least $1/board. That excludes training, management and machine depreciation.

author: jmelson
author_rank: Super Contributor
timestamp: September 07, 2020, 06:51:42 pm
content: Quote from: AlexI on October 31, 2019, 02:13:54 amOne huge advantage of doing it yourself is you will learn the trouble spots on YOUR boards, and can engineer around the issues. You may need to revise the board layout slightly, choose different components, black-list certain manufacturers, etc. and continually tune the process until you get up to 99.9% yield. Since YOU will be observing the process, you can experiment, call on outside resources like eevblog with detailed desriptions of the problems, etc. to find solutions. This is essentially what I've been doing since 2007, and my yield has improved a LOT! I now have several boards that I make regularly that are close to 100% yield. And, when there are issues, I generally know immediately from the symptoms where to look for the bad solder joint. Usually only takes me a minute to fix a board.Hopefully my new, more accurate P&P will help in this area.Jon