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Nolan’s Notes: The ROI of Setup Optimization

It was a comment from a guest at APEX EXPO last March that hit me. We were walking the show floor together and I was describing the major pieces of equipment, their functions, and the order of operation. When we stopped at a booth with robotic component towers, my guest commented, “So, everyone has one of these, right?” “Umm, no,” I said. “This is considered pretty sophisticated equipment. A lot of companies pick these parts from inventory by hand.”
My guest, an industry outsider, said, “How do they tolerate all the time and human error?” That response, frankly, was rather devastating. She may have been new to the industry, but she sure knew a thing or two about manufacturing. I said to myself, “Is it really that obvious?”

Well, if it wasn’t that obvious in years past, it is now. Reducing setup time is a key area for improving uptime and reducing labor waste. The biggest opportunity for EMS providers is not faster machine operation; it is transforming setup from a machine-centered activity into a logistics-centered process where materials, feeders, programs, and tooling arrive at the line fully validated before the previous job ends. This shifts the setup from reactive execution to planned exchange, which is the essence of single-minute die exchange (SMED). This was a new term for me, and if it’s for you as well, we explore it together in this issue.

As production volumes become more fragmented and product complexity increases, the ability to execute fast, predictable, and error-free changeovers will become a defining characteristic of world-class EMS providers. The companies that master setup optimization will not simply reduce downtime. They will gain additional capacity, improve responsiveness, strengthen customer relationships, and create a sustainable competitive advantage in an increasingly demanding manufacturing environment.

In this issue, therefore, we explore the topic with Mycronic’s Robert Helleman and Göran Frank, who discuss how every minute of downtime is revenue lost. Then, I explore the SMED continuous improvement technique. After providing some details about the process, I sharpened a pencil, picked a reasonable hypothetical scenario, and did some ROI math on setup time improvement. The outcome was rather insightful as to where the biggest gains come from.

As much as the manufacturers of robotic component storage towers would like everyone to listen to my APEX EXPO guest and buy a tower or two, the truth is that a thorough and thoughtful implementation of a component-tracking system is a key yet often under-implemented process for shop-floor optimization. If floor tracking isn’t correctly implemented, the fancy equipment is likely to simply automate a bad process.

Outside our chosen topic, this issue explores the leadership of Winston Churchill through the eyes of columnist Jennie Hwang, and Nash Bell writes in his column about “X-ray Inspection of Ball Grid Array Solder Joints.”

Rob Ronan from Retronix concludes his three-part series on the intersection of parts reclamation and supply chain resilience. Dr. Stanton Rak concludes his series as well, wrapping up what we’ve learned about EV technology. Leo Lambert, technical director at EPTAC, answers common questions on soldering technology, which is well worth a read.

Dropping in from Global Electronics Association’s Mexico offices, Filiberto Severiano, CEO and founder at SMTLINK Systems, explains the surge in Mexico’s exports and how companies like his are finding their niche.

Finally, I want to tell you about a new column I’m writing for the I-Connect007 Substack page. This is my chance to tell the industry’s story from a slightly different perspective. I’m not just talking about surface mount technology in this column. Instead, I’ll be taking a much broader view of the industry and the external forces that continue to impact what we do.

I recommend you visit and subscribe to our Substack channel. I-Connect007 is a trailblazer for creating and distributing content about the electronics industry. We were the first to add multimedia, back when that meant a shoulder-carried camcorder. We led the way with books and on-the-floor interviews. We were the first publication to commit to digital distribution, and we grew because of all these channels.

Over the past two years, we’ve built out several alternative channels for our content, including LinkedIn and now Substack, where we are engaging with you in unique, interactive ways. Substack also gives us more space to conduct industry analysis alongside our reporting, allowing us to tell our stories from a higher vantage point. The party’s just gotten started; come on over and join the conversation. 

As always, if you have an idea or a question you’d like to see addressed in SMT007 Magazine, we’re listening.

This column originally appeared in the July 2026 issue of SMT007 Magazine.