How to reduce pcb assembly cost - Mefron

How to reduce PCB Assembly cost is one of the major questions asked by every EMS before giving a final quote to the OEM's In this presentation, you will get to know how it can be done.


https://mefron.com/services/pcb-assembly

1. How to Reduce PCB AssemblyHow to Reduce PCB Assembly
CostCost
Strategies for Cost-Effective Manufacturing Without Compromising
Quality

Design Optimization

Component Selection

Manufacturing Process

Supply Chain
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2. Understanding PCB Assembly CostsUnderstanding PCB Assembly Costs
The key elements driving expenses in electronics manufacturing
Cost Breakdown
•Components: 40-65%
•Labor: 15-30%
•Equipment: 10-20%
•Testing: 5-15%
•Overhead: 5-10%

Key Challenges
•Rising material costs
•Component shortages
•Production inefficiencies
•Quality control issues
•Design complexity 
Benefits of Cost Reduction
•Higher profit margins
•Competitive pricing
•Quicker time-to-market
•Resource optimization
•Scalable production 2
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3. Design Optimization StrategiesDesign Optimization Strategies
Smart design choices that significantly reduce PCB assembly costs
Design Optimization Workflow
Component Selection Layout Optimization DFM Check DFT Implementation Prototype & Review Cost Reduction
Component Selection & StandardizationSave 10-15%
•Use standard component sizes (0402, 0603)
•Choose common, widely available parts
•Minimize unique component count
•Prefer SMT over through-hole when possible 
PCB Size & Layer OptimizationSave 15-25%
•Reduce board dimensions when possible
•Minimize layer count (2-4 instead of 6+)
•Use optimal panel configurations
•Design multiple functions on single PCB 
Design for ManufacturingSave 20-30%
•Optimize component placement & orientation
•Standardize pad sizes & shapes
•Maintain adequate spacing between components
•Include proper fiducial markers for SMT 
Design for TestingSave 10-20%
•Include test points and probe access
•Implement boundary scan (JTAG) capability
•Design for automated optical inspection
•Use built-in self-test functionality 3
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4. Component Selection & ProcurementComponent Selection & Procurement
Strategic approaches to reduce costs through smart component choices and procurement processes
Component Cost Reduction Potential by Category
Component SelectionSave 15-25%
•Choose high-availability components
•Use generic alternatives to specialty parts
•Consider lifecycle status of components
•Balance performance vs. cost requirements 
Supplier RelationsSave 10-15%
•Develop long-term supplier partnerships
•Negotiate volume-based discounts
•Establish vendor-managed inventory systems
•Create flexible supply agreements 
Supply Chain OptimizationSave 12-18%
•Reduce number of suppliers
•Optimize logistics and shipping
•Implement just-in-time inventory
•Analyze total cost of ownership 
Obsolescence ManagementSave 8-12%
•Create component lifecycle tracking system
•Develop alternative sourcing strategies
•Plan for end-of-life components
•Design with component longevity in mind 4
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5. Manufacturing Process OptimizationManufacturing Process Optimization
Streamlining assembly techniques and processes to reduce costs and improve efficiency
Cost Savings by Production Volume
5-10% 15-20% 25-30% 30-40%
Automation StrategiesSave 20-30%
•Implement selective automated assembly
•Use pick-and-place robots for SMT components
•Automate inspection & quality control
•Balance manual vs. automated processes based on volume 
DFM ImplementationSave 15-25%
•Design for Manufacturing review process
•Standardize component footprints & orientations
•Optimize component placement for single-pass assembly
•Design with automated testing in mind 
Assembly TechnologySave 10-20%
•Choose SMT over through-hole when possible
•Minimize mixed-technology boards
•Optimize reflow profile for batch processing
•Consolidate assembly steps & touchpoints 
Testing OptimizationSave 12-18%
•Implement in-circuit test fixtures
•Design for testability (test points, JTAG)
•Use automated optical inspection (AOI)
•Balance test coverage vs. cost Low Volume
(10-100 units) Medium Volume
(100-1,000 units) High Volume
(1,000-10,000 units) Mass Production
(>10,000 units) 5
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6. Supply Chain Management StrategiesSupply Chain Management Strategies
Optimizing your supply chain for cost reduction and improved efficiency
Cost Impact of Supply Chain Strategies
30% 40% 20% 15%
Inventory OptimizationSave 15-25%
•Implement Just-In-Time (JIT) inventory practices
•Use demand forecasting to reduce excess inventory
•Optimize safety stock levels based on lead times
•Establish vendor-managed inventory (VMI) programs 
Supplier RelationshipsSave 10-20%
•Consolidate supplier base for better pricing
•Develop strategic partnerships with key suppliers
•Implement supplier performance metrics
•Negotiate volume-based pricing agreements 
Logistics OptimizationSave 8-15%
•Optimize shipping frequencies and batch sizes
•Implement cross-docking for faster delivery
•Use regional warehousing for global operations
•Consolidate shipments to reduce transportation costs 
Component Lifecycle ManagementSave 12-18%
•Track component obsolescence and plan alternatives
•Purchase lifetime supply of critical EOL components
•Design with component longevity in mind
•Implement component rationalization programs Average reduction in component costs
with strategic sourcing Potential inventory carrying cost
reduction with JIT practices Average logistics cost reduction with
optimized shipping Total cost reduction with long-term
supplier agreements 6
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7. Conclusion & Key TakeawaysConclusion & Key Takeaways
A comprehensive approach to PCB assembly cost reduction
Implementation Roadmap
1
Assessment & Analysis
2
Strategy Development
3
Implementation
4
Continuous Improvement
Potential Cost Reduction by Strategy Area
Potential Total Cost Reduction
30-45%30-45%
Design Optimization
Simplify PCB layouts & reduce layers
Design for manufacturing (DFM)
Standardize board dimensions 
Component Selection
Standardize component packages
Use multi-source components
Optimize component placement 
Manufacturing Process
Optimize assembly technology (SMT)
Implement automation
Reduce rework with DFT 
Supply Chain Management
Develop strategic partnerships
Implement JIT inventory
Optimize logistics & shipping Identify cost drivers in current PCB assembly process Develop custom cost reduction strategies based on volume & requirements Roll out changes strategically across design, component, manufacturing & supply chain Monitor KPIs, fine-tune processes & adapt to market changes When all strategies are implemented effectively 7
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