The phenomenal growth of contract electronics manufacturing during the past four decades has been a boon to the major developers of high-technology equipment. This business area is growing at an average of about 22% per year and likely to account for almost 25% of the world’s total electronics production by the end of this year.
Contract electronics manufacturing is a lucrative venture. Among the major players in fiscal year 1998 were SCI Systems with revenues of $6.8 billion, Solectron with $5.3 billion, Celestica with $3.2 billion, NatSteel with $1.5 billion, and Jabil Circuit with $1.3 billion. In fiscal year 1999, Solectron moved into first place as the total revenues for these five companies increased by 30%.
Contract manufacturing started in the early 1960s when some high-technology product developers were hampered by shortages in their manufacturing capacity. For example, when IBM introduced the PC, the manufacturing facility at Boca Raton, FL, was unable to meet the demand for the new product. One of the companies that came to IBM’s rescue was SCI Systems. As Gregory McFerran, test engineering manager at SCI Systems, recalled, “Both IBM and SCI benefited as did tens of thousands of users who didn’t want to wait for their first computers.”
As a result of this association, production rates increased, manufacturing costs decreased, and quality still was high. And as other large companies saw these benefits, new contract manufacturers sprang up all over the world.
High-volume production of electronic products requires expertise in manufacturing and testing techniques, and contract manufacturers excel in these special capabilities. Each contract manufacturer can build a variety of products at the same time for several customers.
Quantity component purchases and near-zero inventories are other factors that figure into the efficiency of these companies. Often, the contract company has branches in several locations and can optimize the technology level and work load for each plant. SCI Systems, for example, has 34 plants located on four continents. Some of the larger contract manufacturers have expanded their services to include delivery to the distributor or end user, in-warranty repairs, and other types of product support.
Products Manufactured on Contract
Theelectronicproducts manufactured on contract represent a cross section of U.S. industry. Medical devices include X-ray equipment, infusion pumps, heart monitors, bedside monitors, and anesthesia machines. Examples of telecom products are modems, ATM switches, fax products, cell-phones and repeaters, and digital switching systems. Computer products cover a wide range, with disk controllers, network servers, tape back-up drives, motherboards, and printers on the list.
Industrial products manufactured under contract include control systems, hand-held programmers, and metering equipment for power, gas, and water. In the radio category are GPS receivers and various communications transmitters, receivers, and dish antennas that operate up to 5 GHz. Automobile components include electric vehicle controls, anti-lock braking systems, and airbag controls. Some plants produce a variety of military products as well.
Generally, the production quantities are quite high, and the rates are measured in thousands, tens of thousands, or even hundreds of thousands per week. For example, Jabil Circuit performs final test on a total of 7,000 notebook computers each week at several identical stations, each able to complete a test in about five minutes.
Daniel P. Shea, vice president and chief of technology at Celestica, noted that the company builds one million of one type of memory module every year— or one every second. Celestica started with a test time per station of more than 3 minutes and has reduced it to less than 30 seconds.
Such a wide range of products, technologies, and production rates presents new and unusual challenges to the contract manufacturing test engineer and emphasizes the importance of a close working relationship with the product designers. This means that the people on both ends of the communications line must share the urgency of maintaining quality and schedule. To reach that goal, artificial boundaries of corporate identity must be eliminated at the engineering level.
Challenges for the Test Engineer
The contract manufacturing test engineer deals with many of the same problems that confront all test engineers. These include the technical challenges related to testing and debugging the latest high-speed logic, the high density of component mounting, and the overall complexity of today’s electronic circuitry.
“Many of the products we produce require both in-circuit and functional tests,” said Chuck Boblenz, the test engineering manager at GSS Array Technology. “The low values of some capacitors and inductors on wireless products make in-circuit testing difficult, so we developed cluster testing for some of the products and have had good results with this technique.”
Another typical problem is difficulty in getting sufficient documentation and training to test and debug the products being manufactured. The engineer who designed the product understands this problem, but documentation may not be his top priority. To help solve this problem, contract manufacturing test engineers point out that more investment in training, preparation of diagnostic procedures, and on-call technical support by the customer’s design engineers could pay high dividends to the customer as well as the contract manufacturer.
The responsibility for providing test equipment varies with the contract and the product, but typically 50% to 90% is supplied by the contractor. Yehchen Hwa, test engineering manager at Solectron, said, “In-circuit test stations generally are contractor-provided, while automated functional test stations may be supplied by either the contractor or the customer.” In many cases, the customer already has started a production line and is testing a few products. The test station may be transferred to the contractor without modification, upgraded to increase throughput, copied, or used as the point of departure for a more appropriate design.
Minimum human intervention in the test cycle is the goal. Many of the in-circuit test platforms are from companies such as Agilent Technologies, GenRad, and Teradyne. The typical station will provide in-process go, no-go testing and reject the products that have easy-to-detect problems.
Typically, functional test stations are custom-configured. They test the operating subassemblies or completed products and include equipment from sources such as Agilent Technologies, Tektronix, Fluke, LeCroy, and Sorensen, as well as suppliers of custom fixtures for the products to be tested.
Some of the larger contract manufacturers have stations for environmental stress screening and other specialized functions. Most of this equipment is provided by the contract manufacturer and shared by different product lines.
Test managers at contract manufacturers could use some help from test-equipment suppliers. Dan Helein, the manager of manufacturing test technology at Plexus, would like to see “…a better assortment of tools for evaluating test coverage and…tools to evaluate the impact of product changes on existing test fixtures.” In addition, he wants “…revision control tools incorporated into software packages and…tools to shrink fixture development and debug times.”
Mr. Boblenz of GSS Array Technology would welcome occasional seminars on the operation and use of customer-furnished test equipment. In the fast-paced working environment of a contract manufacturing plant, there isn’t time for each technician to pore over the pages of each technical manual in search of tidbits that would make the operation of a test station more efficient.
What Is Next
Assuming the continued growth in global economy, the market for consumer products will continue to expand at a fast pace. The large companies that develop these products will continue to off-load their excess manufacturing, and contract electronic manufacturing companies will continue their phenomenal growth.
All this translates into higher volumes of work for their test departments, with more emphasis on automation and speed. The lines of communication in these design, assembly, and test partnerships are likely to strengthen as both manufacturer and customer see the benefits to be gained.
The following companies contributed to the development of this article:
Celestica (416) 448-5800
GSS Array Technology (408) 229-6100
Jabil Circuit (727) 577-9749
Plexus (920) 722-3451
SCI Systems (256) 882-4800
Solectron (408) 957-8500
Copyright 2000 Nelson Publishing Inc.