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Growing Repair Complexities
December 31, 1969 |Estimated reading time: 8 minutes
OEMs with low- to medium-volume installed user bases may find limited options for repair support. This article looks at common issues and the strategies a repair-depot supplier can use to address issues that OEMs face.
By Ed Grimes, Genesis Electronics Manufacturing
OEMs with low- to medium-volume installed user bases may find limited options for repair support. RoHS-compliance-driven issues, widespread addition of complex subcomponents such as LCDs, and long product life cycles are repair challenges. Developing a cost-effective repair-depot strategy requires an analysis of product life cycle, technology, and logistics issues at the beginning of the project.
Products with short life cycles, or those with a unit cost too low to justify repair over replacement, have simple aftermarket-support strategies. However, longer-life-cycle, higher-unit-cost products may have a range of support-strategy options. As with outsourced product manufacturing, unit cost may not equal total cost in outsourced repair-depot services. As a result, the optimum post-manufacturing service mix may not be evident. It is important to identify potential cost drivers and support needs early. A good starting point is analyzing the life cycle of key subassemblies and components.
OEMs with lower-volume products may opt for a spares vs. component-level repair strategy on purchased subassemblies. In that model, subassemblies are purchased as a unit from the original manufacturer and installed on products under repair. If the subassembly becomes obsolete, the OEM may do an end-of-life (EoL) buy to procure subassemblies needed for the life of their product. For long-life-cycle products, this may result in costly inventory investments, excess inventory, or a long-term inability to support the product. Conversely, component-level repair on complex subassemblies may require manufacturing infrastructure not widely available. As a result, the spares vs. component-level repair strategy requires analysis of the likely cost of inventory vs. the availability and cost of required repair infrastructures.
At the component level, similar obsolescence issues may rise over the life of the product. At this level, however, there may be several vendor options, and the ability to procure excess inventory through multiple channels. If brokers are used, there should be a mechanism for validating inventory integrity.
Technology Challenges
A major challenge emerging today is RoHS compliance. Some OEMs require RoHS-compliant products; some need both RoHS-compliant and leaded products; some require only leaded products. As a result, a repair-depot strategy must consider product requirements now and in the future. It must have a segregation strategy that minimizes the potential for contamination if both RoHS- and non-RoHS-compliant products are repaired. It must address the certification requirements for RoHS-compliant products, and the traceability requirements that may be present in non-RoHS product for industries such as medical or aerospace. Finally, it must consider component availability and obsolescence issues.
This also drives another set of challenges in the repair area: potentially greater failure rates. Tin whiskers are an issue with some RoHS-compliant product, and may increase field returns or change the complexity of repairs when products are converted from older designs. User-driven technology also can cause challenges in a repair-depot strategy. For example, LCD displays are found in an increasing number of products. These displays incorporate tape-automated bonding (TAB) and specialized film-deposition processes. In many cases, manufacturers opt to purchase spares vs. component-level repair, because of the specialized manufacturing requirements. The challenge is that high-volume products with shorter life cycles drive LCD technology. OEMs producing longer-life-cycle products may find that LCD component-level repair is less costly than maintaining inventories on subassemblies with short life cycles.
Logistics challenges often drive the greatest variation between unit price and actual total cost. Potential cost drivers in this area that should be addressed include:
- IT strategy relative to communications between the OEM, end-market, and third-party repair depot;
- Systems for ensuring critical-material availability and integrity;
- Returns packaging and shipping strategy.
The goal is to develop systems that eliminate the costs driven by inefficient communication relative to warranty eligibility or work-in-process (WIP) status; damage caused during inbound or outbound shipping; quality issues related to component inventory integrity; and unnecessary handling, customs, or transportation cost. Creating systems that are transparent to customers and contribute to high levels of customer satisfaction are equally important. Low unit-repair-cost savings can be eliminated if large numbers of customers become dissatisfied due to long lead times for repair, or there is an inability to ascertain the shipping status of their repaired product.
When identifying potential issues, the repair-depot supplier takes a proactive approach that analyzes product characteristics and field-failure trends (Figure 1). Ultimately, the bulk of the repair issues tend to cluster over a small percentage of components. As a result, components that drive the bulk of the failures, and components with limited substitution options, such as microprocessors and gate arrays, are a primary focus in inventory planning.
Potential strategy options for addressing life-cycle-driven component availability options include:
- Procure sufficient spare subassemblies to meet historical demand; when a subassembly goes obsolete purchase and stock EoL quantities.
- Implement a component-level repair strategy and use historical failure data to determine the components with highest demand. Analyze these critical components for potential obsolescence issues and develop a range of procurement sources capable of providing acceptable quality parts.
- When the available supply of new components is limited, identify likely high-demand subassemblies and/or components and develop a customer-approved procedure for salvaging good subassemblies/components from product that is scrapped in the repair process.
RoHS conversion affects life-cycle issues, as the industry conversion to RoHS can affect continuing leaded-component availability. It also drives technology and logistics considerations. Visibility across the entire team associated with the repair process is a key component to ensure that leaded and RoHS-compliant product requirements are addressed. This involves efforts with the repair depot’s internal team, suppliers, and customers. Features to ensure visibility are:
- Maintain a list of RoHS-compliant parts for each customer in a secure Web-based database. Customers can log-on and view their RoHS-compliant product list and update it as products are converted.
- Specify RoHS-compliant or leaded requirements in procurement activities. Parts are inspected as received; if the part is not clearly identified by either labeling or a part number, it may be tested.
- Segregate RoHS-compliant and leaded component inventory within storage areas and WIP. RoHS-compliant parts are marked with green labels.
- Segregate manufacturing resources. Automated processes use dedicated equipment in separate work areas and RoHS-compliant areas are visually marked with green tape. Hand-soldering operations use separate equipment, but share the same area.
- Analyze new products for RoHS-compliance-driven issues, such as potential component obsolescence/availability issues or a need for dual (RoHS-compliant and leaded) repair support. Likely design for manufacturability (DfM) issues such as the effect of higher-temperature soldering processes on the product are identified and, where needed, additional component selection recommendations are made. As products are converted, the impact on repair trends is analyzed, and customers receive reports on variations in field-failure trends to support corrective actions in manufacturing processes.
Complex Technology
Complex subassemblies present a challenge because repair capabilities may be limited. One EMS provider* has invested in capabilities for LCD repair, and clusters multiple customers over that equipment/personnel investment. As a result, customers can analyze cost differences between component-level repair and spares stocking. This can be critical because lower-cost parts such as lamps, polarizers, and anti-reflecting films drive field failures in LCD panels - not the actual TAB assembly. The repair process may require the replacement of only the failed parts, clean the existing TAB assembly, and replace the conductive adhesive interconnect between the TAB assembly and the glass. For small displays, the spares-stocking strategy may be more cost-effective because unit cost is relatively low. However, if available spares are limited, or if the part has become obsolete and is creating a need for a product redesign, the LCD-refurbishment process may be cost-effective. For larger displays, refurbishment costs may be less than purchasing a new display because the highest-cost components are reused.
Third-party repair-depot support should be transparent to end customers. Key areas that must be addressed include minimizing handling costs, visibility of return status to all parties, and speed of service delivery to the end customer.
Figure 1. Technicians test and repair circuit assemblies from an industrial controls product.
Minimizing handling cost is not limited to maintaining process efficiency. Poorly packaged returns or inappropriate handling can increase product damage and actual repair cost. In some cases, the supplier ships specialized packaging as part of a return-authorization process. Handling and storage processes are clearly defined based on product requirements. In most cases, field returns are shipped directly to and from the repair depot to minimize shipping-and-handling costs.
Visibility of repair status also is important. End-market customers want to understand repair timing and cost. The OEM may be selling a warranty repair service contract with specific return times, and may also want customers in out-of-warranty situations to pay for repairs.
Mutually agreeable order-tracking systems are set up with each customer. Customers determine whether they want to maintain internal customer-service functions or outsource it and monitor activity status reports. To reduce service-delivery time, an inventory of refurbished product is maintained, and refurbished product is shipped back to the market as damaged product enters. The repaired product is then restocked in the refurbished inventory.
Conclusion
The benefits of carefully analyzing long-term product requirements and the optimum mix of support needs are twofold. First, this proactive approach helps ensure lowest total cost by minimizing the probability of reactive changes to unanticipated market conditions. In many cases, OEMs will be able to choose between a menu of contingency options with adequate planning and costing time. Second, a proactive approach contributes to long-term customer satisfaction. Long-term planning provides higher-quality component supply options by creating systems that ensure adequate visibility in planning and product status to the OEM, its customers, and the supply base.*Genesis Electronics Manufacturing, Tampa, Fla.
Ed Grimes, business development manager, Genesis Electronics Manufacturing, may be contacted at (813) 854-1661; e-mail: egrimes@genesismfg.com.