EMS HANDBOOK

TABLE OF CONTENTS

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Pricing Matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Step 1: Early Process Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Step 2: Design Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Step 3: Open Book Cost Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Step 4: Lean Front Office Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Step 5: Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Introduction

Yes, we’re different.

DigiSource is a team of industry veterans dedicated to providing
open, honest information about EMS pricing and practices.

In this paper we provide a detailed explanation of how we

believe PCB assembly should be approached. Armed with this
information you will be well positioned to understand the
services and value provided by your EMS partners.

We provide Intelligent Introductions

Our most basic service is providing Intelligent Introductions

by analyzing your requirements from an insiders perspective
and then introducing you to senior contacts at EMS
companies well suited to your needs. Best of all this services
is free.

We review your component sourcing

We also review your component sourcing, including the PCB,

to insure you are getting the best prices in the world available
to similar OEMs.

DigiSource EMS Handbook 3

Price Matrix

Speaking of prices,
let's start there.
We know how vital price is to you, so here you go...

Ou r a p p ro ac h uses several EMS m odel s and 3 rd

party d ata.

We've been applying these models for almost 10 years, we expect them to
be accurate within +/- 5%. You can see instant pricing for your product
using our online SMT Cost Model. If you'd like to meet a supplier who
provides the US High Volume prices just Contact Us.

DigiSource EMS Handbook 4

Early Process Prep

Step 1: Early process preparation. Early

- as in before you do anything else.

Applying lean principles to the early stages of a project is one of

the factors most responsible for phenomenal quality
performance. When you request a quote from EMS companies
their objective is to figure out a price (we know, we’ve worked at
all the big EMS companies). At DigiSource we believe the quote
process should begin preparing to build. More fully detailed in
the pages that follow, by the time you receive a quote the
supplier should have cross-checked hundreds of elements of
each component.

This means you need to ...

...perform a BOM scrub

...know about ECNs & PCNs

...know about single sourced components

...know about supplier stock levels

...confirm your package types

DigiSource EMS Handbook 5

Early Process Prep

You need to perform a BOM scrub.

A BOM scrub verifies that your manufacturer/manufacturer part number

combinations are valid. This should always be your very first step.
Enormous amounts of time are wasted when this isn’t done, and without it
your ability to take advantage of downstream automation tools is greatly
restricted. We recommend SiliconExpert and Z2Data for this.

You need to know about ECNs & PCNs.

Don’t wait to hear back from suppliers that one of your parts is obsolete,
that's way too late. You can access the life cycle status of each individual
component, here’s what a summary chart of your lifecycle data would look
like:

Lifecycle Summary Report

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Early Process Prep

You need to know if you’re single sourced.

The percentage of your BOM that has multiple sources is a good

barometer of overall risk. You shoud get line by line detail, but here’s what
a summary chart of your multi-source position would look like:

Multi-Source Summary

Sometimes, you need alternatives.

When you do, wouldn’t it be nice to have a comprehensive report of

alternates, including any differences and the predicted life of the alternate?
And how about a link to the datasheeet? Viola!

Cross Reference Detail Report

(source: SiliconExpert)

DigiSource EMS Handbook 7

Early Process Prep

You need to know if your supplier has

on hand inventory.

This is often one of the most vexing problems for NPI builds. Your
supplier presents you with costs related to min/mults, so you think they
should have the parts on hand from prior builds.Their systems should
automatically check each AVL’d manufacturer part number for 3 types of
on hand inventory: on hand under your internal part number, on hand
consigned inventory for you, and on hand unallocated inventory under
another customers internal part number. These checks should be
performed automatically by their quoting software.

Descriptions are unreliable, your

package types need to be confirmed.

Package types are critical to understanding labor costs, workmanship

standards, and capability requirements. Best practice is to pull the package
types automatically from two or more databases (like SiliconExpert and
Siemens Valor Part Library). Typical quoting software recognizes 300+
package types and further categorizes them into about 12 types for labor
analysis.

DigiSource EMS Handbook 8

Design Review

Step 2: Design Review

Design for Manufacturing (DFM) is a broad term with a range of

meanings. We refer to design reviews as Design for Fabrication
(DFF), and Design for Assembly (DFA). DFF is a tool set used to
review the design of the PCB prior to fabrication and we discuss
it in the PCB layout methods section below. Here we’ll review
DFA, which looks for problems that may cause rejects or other
quality issues during assembly. Often associated with NPI, DFA
should be run on all products new to a manufacturing floor, and
after any significant ECOs.

Use Valor.

Siemens Valor Process Engineering is the gold standard for DFA. It's a
complete suite of products for manufacturing, but one of the modules runs
a series of checks against a set of rules specifically configured for the target
manufacturing floor. Called the Design Rules Check file (.drc), there are
hundreds of test performed on every component and on every individual
solder joint. Valor divides the tests into 6 categories and reports concerns (in
yellow) and violations (in red) as summarized here:

DigiSource EMS Handbook 9

Design Review

Tens of thousands of solder joint checks.

A typical 100 line item BOM might have 500 individual solder joint
connections. Typically, each board is checked for ~242 solder joint rules,
that’s 126,000 tests (500 X 242). Here’s some examples of what is checked
for you:

You receive a detail report by line item.

The Valor software reports a staggering amount of detail and can frankly
be overwhelming. Your EMS partner should have designed a custom
report organizing the Valor output by prioritizing the issues. Here's an
example:

DigiSource EMS Handbook 10

Design Review

Let your EMS partner handle the interpreting.

In truth, you probably won’t actually want the report above.

Instead, you’ll likely rely on your EMS partner to review the report and let
you know if there’s anything you need to address (this is especially true if
they designed the PCB). This is because they likely have in-house design
engineers, manufacturing engineers, test engineers, and even PCB
designers who combined provide immediate access to the expertise
necessary to interpret and act on the Valor DFA output.

DigiSource EMS Handbook 11

Open Book Cost Analysis

Step 3: Open Book cost analysis

(not quoting)

You need a partner, not an adversary. The partnership starts with

working together to drive material cost. We are big believers in
the ‘should cost’ approach, which means you should understand
the actual manufacturing costs of the products your outsourcing,
not just the top line price. Most OEMs lack the resources or
training to conduct this type of analysis. Top notch EMS
companies won't just quote you a top line price, they will provide
you with a full cost analysis so you can work together to drive
out cost.

Your costed BOM is the repository of

your collected wisdom.

OEMs are often a little surprised when we point this out, but consider it for
a moment. Which manufacturer has the best price for each component?
Which vendor (as in distributor) offers you the best pricing and terms?
Which package/temp range/RoHS/bulk or reel or tray or cut tape
combinations is best for your circumstance? Have you leveraged your larger
relationship to negotiate preferred pricing? The older the product, the more
this type of knowledge accumulates in your BOM/AVL. This is especially true
for custom items like cable assemblies, plastics, sheet metal, and machined
parts.

DigiSource EMS Handbook 12

Open Book Cost Analysis

So... share your costed BOM.

Apple, Cisco, and other leading outsourcers provide their costed BOMs.
Why? Because it’s dramatically more efficient and much more likely to lower
costs. It’s more efficient because the EMS company does not have to chase
after low cost, highly custom, or poorly specified material.The odds of
suppliers magically discovering lower material costs are actually quite low,
especially for electronic components (see our article on how components
are priced). They’re much more likely to actually identify lower costs for you
when they can focus their efforts on the cost drivers instead of chasing after
every low value component.

Where to collaborate, and where to compete.

In most outsourced electronic assemblies, materials account for about

80% of product cost and your EMS supplier is not the direct source. The
other 20% is labor, overheard, and profit which they are the direct source.
You are both equally interested in the lowest material cost, so you are doing
your best work together when you collaborate on materials. Share
information, sources, prices, etc. Labor/OH/Profit you do have differing
interests (they want more, you want less!), so compete this part.

DigiSource EMS Handbook 13

Open Book Cost Analysis

Open Book Costing (they share too).

Transparency in cost is the heart of a should cost partnership. Finding a

contract manufacturer willing to provide open book costing is a foundation
to cooperating on reducing costs, especially materials cost. They should
provide you the line item detail necessary to understand your product cost
so you can work together to drive it as low as possible.

It’s a big world; prices will vary.

Global component pricing is an ever changing riddle. The EMS company's

supply chain management team should have a clear understanding of how
component pricing really works. One of the fundamental problems is
component pricing is often siloed inside the component suppliers. There is
a nice person who prices United States procurements, a nice person who
prices Asia, and another nice person who prices Europe. And they don’t talk
to each other. We often wonder if they even know each other, considering
how widely prices can vary by global region. As a broad average, we believe
component prices vary by about 20% around the world.

Global component sourcing.

Savvy buyers must know which region of the world is currently pricing their
commodities the best, so that’s what DigiSource can do for you. We
maintain a network of contacts that allow us access to sourcing around
the globe. This is often very sensitive, so we work closely with you to make
sure any existing domestic supply chain relationships are honored.

DigiSource EMS Handbook 14

Open Book Cost Analysis

Cost reduction is an on going process,

not an annual event.

World class outsourcing OEMs don’t treat cost reduction as a yearly

exercise, or something that happens during NPI, or as a special project. It is
part of the daily DNA. To get your best possible cost, you need a partner
with a culture of cost reduction who works in cooperation with you to drive
cost all year long.

Customized cost report.

The DigiSource cost analysis process collects comprehensive data, and

you will likely only want to see part of it. All of our cost analysis reporting
is custom formatted for your needs in Excel. We can provide whatever
you can use, here’s an example of how one customer likes to receive the
data You should expect similar from your EMS partner.

DigiSource EMS Handbook 15

Lean Front Office Processing

Step 4: Lean Front Office Processing

Front office processing refers to those steps taken to import your

BOM, acquire your materials, and bring your documentation into
the EMS systems. Once you release your order, the front office
processes begin. The steps taken here are crucial to delivering
your product on time and have a substantial impact on quality by
reducing common errors. In this section you’ll learn about
surprising process innovations that can be made through the
application of lean principles to office processes.

Lean Insight 1
All powerful Program Managers.

Program Managers should run the show. They are responsible for satisfying
your requirements, and they should have the authority to make it happen.
Your Program Manager inputs your BOM, orders your fabs, communicates
your specifications to Manufacturing Engineering, controls your documents,
and plans the floor. Everyone in the building follows the lead of your
Program Manager. They do this because in a service relationship, the most
important value is delivered at the point of contact with the customer. Being
outstanding in a service industry like contract manufacturing is all about
enabling and supporting the team members in direct contact with you.

DigiSource EMS Handbook 16

Lean Front Office Processing

Lean Insight 2
Dual BOM’s.

We know, this is heresy, but it’s phenomenally successful. Your BOM is used
in the costing tool, which is usually used for ERP import, which drives
material planning (see ‘instant BOM import’ below to understand why). The
original documents can also be passed to Manufacturing Engineering which
uses them for programming the manufacturing equipment. The two BOM’s
meet at the kitting/feeder set up stage when the Picklist gets matched up
with the Traveler. This is not only much more efficient, it creates a closed
loop feedback channel that automatically double checks for simple errors,
like data entry.

Lean Insight 3
No dedicated document control.

More heresy. It turns out Program Managers and Manufacturing Engineers,

who actually use the data, are the most efficient and effective at storing
it. To be clear, your EMS should have strong document control practices,
just don’t accomplish the task by passing the documents to a third-party
document control department for storage and access. Turns out that
doesn’t add value, in fact it induces error, and lean principles demand we
eliminate such steps.

DigiSource EMS Handbook 17

Lean Front Office Processing

Instant BOM import

During the cost analysis process they collected and organized all the data
necessary to import your BOM. In the process they should have identfied and
resolved any issue that would prevent them from importing, like missing,
incorrect, or mis-matching information. It's the little things, like customizing your
internal part numbers to their nomenclature, adding vendor codes, adding
package codes, etc. Because this was all done very early, once they receive your
order they should simply hit a button and instantly import into their ERP.

Instant 100% ERP accuracy

Items are at the core of all ERP systems. Items have many fields, usually around
25 that matter. Typical active contract manufacturing divisions have
10,000-20,000 active part numbers. That’s 250,000 or more fields that have to
be correct. Your EMS provider should have the tools to make sure all the fields
are correctly populated. We have built just such tools and know it's possible to
see if there is any missing or out of parameter data the moment the import is
done. The ERP database should be 100% correctly populated 100% of the time.

Instant procurement visibility

Internal procedures can be aligned to allow any procurement or program

management personnel to run ERP on the fly. Modern ERP systems can
recalculate in about 15 seconds. So when your new requirements are loaded,
purchasing should see them immediately.

Instant = Efficient = Low Cost

It’s great when these processes execute instantly. But speed isn’t the real
advantage, it’s cost. Fast means extremely efficient, and less time directly
translates into less cost.

DigiSource EMS Handbook 18

Lean Front Office Processing

Real time dashboards

The screenshot below is an example of a real time dashboard executed in Excel. It

is connected in real time to over 50 SQL database tables of ERP and Quality
Execution systems, interogating the status of about 100 key operational metrics.
In addition, it's easy to push key parts of the dashboard to smartphones 3 times a
day, so key personnel are always aware of operational status. This creates another
remarkable efficiency effect. Team members don't have to stop and think about
what to do next, the dashboard guides them. And when each department stays on
top of their metrics, there is little need to cross expedite each other.

Real Time KPI Dashboard

Updates pushed to phones 3 times daily

DigiSource EMS Handbook 19

Manufacturing

Step 5: Manufacturing

Manufacturing defects are more commonly induced by human

error than machine failure. So trust automated processes,
and double-triple check anything a human does. This simple
philosophy is the core of reaching sub 25 solder joint DPMO.

Double Check #1
Manufacturing Engineering starts fresh.

Manufacturing engineers should start with the original customer documents

to create the files and documentation necessary to process the job.
Additional information to process the job should be passed from the
Program Manager to Manufacturing Engineering via an internal checklist to
ensure all the required docs and data are present for engineering. A lot is
asked of manufacturing engineers, best they start with fresh eyes and review
the entire job in detail.

Double Check #2
BOM compare at kitting.

With two BOMs in play, at kitting the Picklist BOM (from Program
Management) and be compared to the Traveler BOM (from Engineering). The
Picklist is generated by ERP and drives material. The Traveler is generated
independently by manufacturing engineering. Cross-checking at this stage
verifies correct BOM entry, including internal part number, quantity per, and
AVL manufacturer part number, and packages.

DigiSource EMS Handbook 20

Manufacturing

Feeders are a big deal

Ah, feeders. OEMs seldom realize it, but a contract manufacturer’s investment in
feeders can equal or even exceed the investment in SMT equipment. If you want to
ask a savvy question next time you visit a PCB assembly operation, inquire as to how
many feeders they have. You’re probably looking for an answer of about 200
feeders per line. They need enough feeders to have each line running and a set up
waiting for each line. If you want to know if they have enough feeders for your
work, count how many SMT parts are in your largest BOM, times that by two, then
times that by the number of SMT lines at the contract manufacturer, and that’s how
many feeders you need them to have (actually you should perform this calculation
on the contract manufacturers largest build but for good reasons that’s hard to
know).

Double Check #3
Now do a full audit.

Once the feeders are set up a full QA is crucial before the line starts. This
should always be done by someone other than the operator who set up the
feeders, ideally it should be done by the Quality department. The audit
confirms the correct part is in the correct feeder location. Best practice is to
also confirm the values of capacitors and resistors since these items are too
small for part markings.
Post Feeder Setup QA

DigiSource EMS Handbook 21

Manufacturing

Meanwhile, be programming the equipment.

This is another area where a human step can be eliminated. Using Valor, for
example, the job can be checked for potential manufacturing problems, then
Valor can directly program most SMT equipment on the line (most contract
manufacturers use the equipment vendors software to program, meaning up to
four different software packages to cover SPI, SMT, AOI, and AXI programming).
About 75% of programming time is related to developing a library of components
for each equipment supplier. By working to integrate Valor libraries with
equipment libraries a contract manufacturer can greatly reduce programming
time and improve optimization quality (this is a really big deal!).

Understand SMT line capacity

The capacity of SMT lines is expressed in component placements per hour (CPH).
CPH ratings can be taken from manufacturer max rating, from an IPC standard
rating, or from actual boards. The rating from actual boards is the only one worth
paying attention to, and is derived from programming simulations of actual
boards and verified with actual results down the line. Most industry SMT lines run
two pick & place machines and have an actual CPH of about 25,000. Advanced
lines deploy two or three high speed SMT placement machines and reach line
capacity of 100K-125K CPH actual. Put another way, a modern line can have the
capacity of a four-line SMT operation with half the overhead... more cost savings
that can be passed to you.

The secret sauce: Printing & Oven...

The manufacturing sequence on a SMT line are solder paste printing, SMT
placement, solder reflow oven, and wash. Of defects induced on a SMT
manufacturing line, substantially all of them are related to either solder paste or
the reflow oven. Exactly how each EMS develops its printing processes and oven
profiles is proprietary, but there are a few best practices we can share...

DigiSource EMS Handbook 22

Manufacturing

Solder paste printing best practices.

60-70% of SMT manufacturing defects can be traced back to paste printing. Keys
to successful printing are selecting the most optimal paste and the best tools
(stencil and squeegee blade). Solder paste consists of solder powder and liquid
flux. The solder powder is comprised of metal alloys chosen for the specific
application. The particle size of the solder powder varies, and the needle that
dispenses the paste must be sized accordingly. The table below is best practice
starting point for selection of solder paste/needle size combinations:

Dispensing Needle Size Selection Guide

F o r typ i cal p ro j e c t s t hat c ont ai n fi ne pi t c h

co mp o n en ts, we c ons i der l as er- c u t
s tenc i ls with micro-etching best practice.

Laser cut stencils are made directly from CAD data which improves
process control and can produce aperture widths as small as
0.004" with an accuracy of 0.0005". When appropriate, laser
cutting can produce tapered apertures, an angle of about 2° is best
practice for optimal solder paste release.

DigiSource EMS Handbook 23

Manufacturing

...and oven profile best practices.

There are two approaches to oven profiles, ramp-to-spike profiles (also called
ramp-to-peak or tent profile) and the soak profile. Most common is soak profiles
on 9 zone ovens. There are four basic stages: preheat, pre-reflow, reflow, and
cooling. During pre-heat the assembly’s temperature is raised from ambient to a
target temperature at a rate that can vary from 0.5 to 2.0°C per second. About
0.78°C per second is a good baseline best practice for average board sizes and
densities. As the board moves between zones the goal is for each area of the
board to heat evenly, temp differences between areas is called delta T, a delta T of
≤40°C is best practice. At pre-reflow, also called the “soak” phase, the goal is to
bring the entire board to exactly the same temperature everywhere across the
assembly. During this phase the component leads are prepared for bonding with
solder by the flux activator, which removes surface oxide. The soak phase is critical
to preventing voiding in all it’s forms, and is especially critical for hidden lead
packages (BGA, LGA, QFN, etc.). At the reflow phase, the temperature of the
assembly is raised just high enough to cause the solder to liquify (the "liquidus")
and form a metallic bond with the component leads. Best practices are to raise the
assembly’s peak temperature to 20-30°C above liquidus and hold it there for a TAL
(time-above-liquidus) of 30-90 seconds. During the cooling phase the objective is
rapid cooling, because rapid cooling produces the most reliable long term solder
joint by inducing a fine grain structure in the solidifying solder. However, if the
cooling is too rapid solder joints will crack from thermal stress caused by different
coefficients of thermal expansion between the component leads and the solder.
Best practice is a cooling rate of 4°C per second.

Post reflow first article inspection.

Once the first assembly completes reflow, the line shouild be stopped while
independent quality auditors verify the process. The assembly is first visually
inspected, then should undergoe automated optical inspection When needed
the board should be inspected with automated x-ray. When these steps are
complete, the board should undergoes a final visual inspection, then the line
can resumes production.

DigiSource EMS Handbook 24

Conclusion
As this overview demonstrates, the DigiSource methods are not
about tips & tricks; it’s about consistent processes that cover a
range of disciplines and are designed to lower cost while
improving quality.

What to do next...

We make next steps a breeze.

You can easily review our suggested cost model to check EMS
competitiveness. You can get most of the Early Process Prep
benefits with our Production Readiness Report. And if you need
help finding an EMS that meets our pricing and quality standards
you can contact us and we will introduce you to some (it's free).

Get our Supplier Survey Template

Our Supplier Survey Template incorporates the practices we've

recommended in this EMS Handbook into a comprehensive
Excel template incorporating IPC-1720A. With 300 questions,
you can easily customize the survey to your needs.

DigiSource EMS Handbook 25