Circuits Assembly - August 2008 - (Page 39)

side, its scrap cost is recorded at the bare board level. If it is scrapped after the secondary side is started, its cost is recorded as a fully populated assembly. This can make equipment additions to secondaryside lines somewhat easier to justify. And, the entire time those boards are sitting in queues waiting for extraordinary repair or MRB review, they are costing the company money by tying up capital. Cash flow is king. Estimating the amount of boards sitting in WIP for extraordinary repair or disposition, average value and estimated carrying costs can also help in the justification process. The cost accountant is the best source 4/14/08 11:42 which are likely not oject2:Layout 1 for these numbers, AM Page 1 a stretch for them to provide, as they calculate such things as part of their regular duties. When it comes to equipment sets and process chemistries, a broad spectrum of suppliers have corresponding price points on their products. One of the first things I learned about marketing was that before an organization tries to sell its first widget, it must decide if it wants to be a cost leader or a product differentiator. Trying to do both is a death wish. Regardless of whether the product is processing equipment or chemistry, it has been my experience that the lowcost suppliers provide products that do not perform at the same levels as those of the higher cost suppli- ers – the old “you get what you pay for” principle. It also has been my experience that, while the low-cost providers sell on price, the higher cost providers sell on value, and can actually provide the recipes to help demonstrate the value of their products and justify their higher prices. We refer to these algorithms as Value In Use (VIU) tools. If considering procuring new equipment or changing process chemistries, ask your supplier if it can provide you with VIU tools; you’d be surprised how many organizations have these available. Even if the local sales representative is not familiar with them, it’s likely that, if the company marketing the product is positioning itself as the value leader, it has created these tools and is just a phone call or email away from helping you write your value equation. This month’s lesson learned? If you want to upgrade your process in a way that brings your organization the most value, it will take some investigating and a little legwork. You’ll need to enlist some support: The supplier can likely help you write the price versus value equation, and the cost accountant can certainly help you solve it. On the other hand, if you simply want to upgrade your process based on the lowest possible acquisition price, that’s a lot easier. Just get a couple quotes and consult with a first-grader. n Pb-Free Lessons Learned circuitsassembly.com Circuits Assembly AUGUST 2008 39 http://www.powell-muchaconsulting.com/ http://www.powell-muchaconsulting.com/ http://circuitsassembly.com

Table of Contents Feed for the Digital Edition of Circuits Assembly - August 2008

Circuits Assembly - August 2008 Contents Caveat Lector Industry News Market Watch Talking Heads Screen Printing Better Manufacturing Auditing a Fabricatior Cutting Machine Programming Time Simultaneous Acoustic Imaging and Surface Mapping Tech Tips Soldering Test and Inspection Process Doctor Pb-Free Lessons Learned Getting Lean Component Advances Product Spotlight Ad Index Assembly Insider Techincal Abstracts

Circuits Assembly - August 2008

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