Siemens Digital Industries Software

Lowering PCB costs with

material utilization
Valor NPI optimizes panelization, speeding
time-to-market

Executive summary
In recent years, we’ve seen many tools introduced to reduce the cost of
designing and manufacturing a printed circuit board (PCB). This has
become critical as PCB complexity increases while the surface areas are
getting smaller. So how do you drive your PCB costs down while meeting
the technology demands? One way for doing this is to pay attention to the
material utilization of your panels.
In this white paper you’ll find real-world examples that show how taking
control of your panels, not just the PCB design, can reap solid rewards
even at quantities lower than you might think.

Patrick McGoff Bill Ji

Market Development Manager Technical Marketing Engineer
Siemens Digital Industries Software

siemens.com/mentor

Abstract
To avoid confusion, let’s define what a “panel” is. In
fact, there are two panels that are used in the manufac-
turing process. The first panel in the process is the
fabrication panel. In almost every instance, it contains
several PCBs stepped and repeated onto a panel size the
fabricators use. It also contains other features such as
nomenclature, cou¬pons, venting and thieving pat-
terns, as well as their own tooling holes. Figure 1 illus-
trates a fabrication panel.
Figure 1. A fabrication panel has multiple assembly panels stepped onto it.
Siemens Digital Industries Software
White paper | Lowering PCB costs with material utilization
The second panel is the assembly panel, and the fabri-
cation panel contains these assembly panels rather than
simple blank PCBs. This is the deliverable you expect
back from the fabricator (figure 2). The assembly panel
includes the PCB, tooling holes, fiducials and frequently
at least one rail for the surface mount technology (SMT)
line to use for transporting as well as other features. As
the name implies, this panel moves through the assem-
bly line and soldering. The assembly panel can encom-
pass one or more PCBs depending on its size.
Figure 2. An assembly panel is used on the assembly line and the panel is
removed from the PCB after being fully assembled.
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 White paper | Lowering PCB costs with material utilization

How do panels impact your cost?

No matter how many assembly panels are contained in
the fabrication panel, the cost of the material is the cost
of that panel. It’s important to consider the material
utilization when looking at panels and cost. How is that
calculated?
Material utilization of a panel = (area of a single design
x number of designs)/area of the panel
As you can see in figure 3, you could place one row of
three or two rows of two on the same size panel, but it’s
quite obvious which has the greater material utilization.
The greater the material utilization, the fewer panels
required and the lower the cost.

Figure 3. Material utilization and cost varies depending on the array

configuration.

Who designs the panels?

Commonly, many companies leave the panel design to problem is that different PCB suppliers have different
external suppliers, as figure 4 illustrates. Obviously, in sizes of panels in stock and also different process capa-
this way you lose the opportunity to optimize the panel bilities. This may lead to suppliers providing different
and also lose control of the cost of the panel. Another size panel designs, which is not what you want.

OEM Leave panel design PCB fabricator

to suppliers

Assembly Fabrication PCB

PCB design
panel panel fabrication

Figure 4. Both fabrication and assembly panels are controlled by external suppliers.

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Another commonly seen scenario is when the original
equipment manufacturer (OEM) only designs the
assembly panel drawing, but leaves the subsequent
process to suppliers. Even companies that design their
own assembly panel can run into problems. In figure 5
the OEM has designed the assembly panel using a com-
puter-aided design (CAD) tool and handed off a drawing
of the panel to the fabricator. The fabricator, in turn,
takes that drawing and creates an assembly panel
model using their computer-aided manufacturing (CAM)
tools. This is sent back to the OEM for approval and may
take more than one iteration. When the assembly panel
Assembly panel
guideline and AutoCAD
OEM
Assembly
Assembly
PCB design panel
drawing
Figure 5. Even if the OEM designs the assembly panel, the drawing is interpreted by the fabricator and it may take more than one iteration before an
approved panel is finished.
Reduce cost while improving efficiency
Since most new product introductions begin with a
small number of PCBs for prototyping, the savings due
to material costs is often overlooked because the point
at this stage is to get and test a small number of func-
tioning boards. Prototyping costs are most affected by
1) the required delivery time, 2) if there are constrained
nets and 3) material and finish that are required. The
cost problem arises once the prototypes are successful,
and the same PCB and assembly panels are assumed to
be acceptable for production. However, acceptable and
optimized are not equivalent.
Instead, consider incorporating the assembly and fabri-
cation suppliers’ panel guidelines into a software tool,
which removes the risk of interpretation and the
Siemens Digital Industries Software
White paper | Lowering PCB costs with material utilization
is approved, the fabricator designs the fabrication panel
with little or no input from the OEM, thus losing out on
cost saving optimization.
Using these traditional ways, OEMs lose insight into the
reason for cost savings. Only when the OEM has the
ability to design both the assembly and fabrication
panels can cost implications be seen early enough to
have an impact. In addition, significant time saving can
be realized by not having to iterate with the fabricator
to get an approved assembly panel.
PCB
Interpret and re-design
in CAM system
fabricator
Fabrication PCB
panel panel fabrication
Send back for approval
redundancies of recreating a panel each time. In addi-
tion, you will also be able to determine the cost effects
of the material for the fabrication and assembly panel.
With that information, you can explore alternative
layouts of the assembly panel to bring the material
costs down.
Knowing the cost implications early in the design pro-
cess can even allow you to evaluate changes to the PCB
profile to further optimize material utilization in produc-
tion. In a real-world case, a mobile communications PCB
designer raised the panel material utilization from 52
percent to 88 percent by redefining a board feature that
allowed interlocking the PCBs in a panel, which repre-
sented found money.
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 White paper | Lowering PCB costs with material utilization

Avoid issues that require lengthy fixes

The full benefit of in-house panel design can only be
attained if the software can perform all the required
tasks. Without that, you do not have full visibility into
the true cost-saving opportunities.
As with any tool in the design process, we don’t want
optimization to introduce its own manufacturing issues.
Assembly panel design and optimization can create
possible issues without the designer being aware of it,
only to have the fabricator report back they cannot
build it as designed. Worse yet, some of these issues
might not manifest until the assembly panels reach the
assembly operation, multiplying the cost of the mistake.
These types of assembly panel issues can be discovered
when they can be easily resolved during the PCB design
process by using design-for-manufacturability (DFM)
software. Several types of issues that often occur during
assembly panel design are illustrated in figures 6A
through 6D.
Another benefit of in-house panel design is you can
view the suppliers’ requirements and be sure the output
sent to them is not just acceptable but optimized for
your objectives. This eliminates a great deal of time
spent communicating and resolving the same topics
with each supplier.

A B C D
Figure 6. Common assembly panel issues that affect manufacturing. In A, an LED obstructs access to a fiducial, which prevents proper registration. With
B, the breakaway tab is too close to the SMD pad, which causes stress on the pad when separating. For C, the component is too close to the conveyed
edge and risks damage during assembly. Illustration D shows that placement of components on adjacent PCBs cannot be done with this assembly panel
design.

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 White paper | Lowering PCB costs with material utilization

Cost savings examples

Let’s look at material utilization as a percent of the When the panel assembly was optimized, they were
entire panel. Fabricators will often quote a value that is able to get 31.5 percent material utilization, providing
impressively high, say above 60 percent. Is that valid? 10 arrays of two PCBs per fabrication panel, as figure 8
The percentage the fabricator states is how much of the illustrates. Valor™ NPI soft¬ware, which is part of the
fabrication panel is being used based on the assembly Xcelerator™ portfolio, the comprehensive and inte-
panel provided to them. Since the assembly panel is grated portfolio of software and services from Siemens
always a rectangular box, it fits onto rectangular panels Digital Industries Software, automatically nested circuits
quite nicely. into a tighter assembly panel in spite of the PCB’s
unusual shape.
But what you most care about is the material area used
for the PCBs, not the assembly panel, because that is
the determining factor as to the number of panels
needed for the order. Figure 7 depicts how the fabrica-
tor reported this material utilization at 58.9 percent, but
because of the non-rectangular shape of the PCB, the
true material utilization is only 18.7 percent.

Figure 8. An optimized assembly panel within an optimized fabrication

panel.

Next, we constructed a cost spreadsheet accounting for:

• Quantity of PCBs ordered
• Fabrication panel area
Figure 7. A fabricator would say this is 58.9 percent utilization, whereas
an OEM sees this as 18.7 percent material utilization based on the PCB.
• Fabrication panel cost per square inch
• Additional fabrication panels to accommodate scrap
The scrap number is a variable because lower
We studied this design to measure the potential mate-
percent¬ages are required with higher volume. The
rial savings. We defined its production volume in lot
remaining variables were considered constant between
sizes of up to 2,000. Before optimization, material
the two scenarios.
usage was 18.7 percent on an 18 x 24-inch fabrication
panel, with two PCBs per each of six arrays on the panel.

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 White paper | Lowering PCB costs with material utilization

For this example, we calculated the costs before and Finally, we studied four designs to measure the poten-
after panel optimization for order sizes between 100 tial material savings. Each defined its own production
and 2,000, in increments of 100. volume. All of them brought impressive savings, despite
only a small number of PCBs being designed each year
Figure 9 shows that any volume of the optimized panel
(table 1).
showed significant costs savings. In addition, the quan-
tity with the overall lowest cost per PCB was identified.
That brings up an interesting question: Would you alter PCB 1 PCB 2 PCB 3 PCB 4
your order quantity if you knew in advance what the Maximum savings per PCB $ 4.35 $ 1.02 $ 8.29 $ 2.56
lowest per PCB price is? Quantity of PCBs/Qtr. 100 1,500 50 450

Savings per PCB/Qtr. $ 435.00 $ 1,530.00 $ 414.50 $ 1,152.00

Cost per PCB
Savings per PCB/Yr. $ 1,740.00 $ 6,120.00 $ 1,658.00 $ 4,608.00

Number of PCB designs/Yr. 24 48 36 24

Total material savings/Yr. $ 41,760.00 $ 296,760.00 $ 59,688.00 $ 110,592.00

Lowest cost
per PCB
Table 1. Cost savings for the four PCB panel examples.

In addition to saving material, when you consider the

labor costs involved to define, create and communicate
Original cost per PCB Optimized cost per PCB
all the panelization instructions, it’s easy to see that a
Figure 9. At any volume level, the optimized panels showed significant
systematic panelization tool also can have measurable
cost savings. labor savings.

In Figure 10, you can compare the number of fabrica-

tion panels needed, nonoptimized and optimized.
Perhaps surprising is these lines are not entirely
straight – they account for the combination of variables
mentioned earlier. Perhaps even more surprising is
using panel optimization on this design enables you to
realize cost savings in as few as four panels.

Actual number of fabrication panels needed

Panel optimization
can show savings
with as few as 4
panels Non-optimized

Optimized

PCB quantity ordered

Figure 10. The number of fabrication panels required is shown;

optimization reduced the quantity by a large margin.

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 White paper | Lowering PCB costs with material utilization

Valor NPI has the complete toolset

Valor NPI Panel Optimization software provides the

tools to execute the complete set of tasks needed to
bring design in-house. Valor NPI:
• Calculates exact material utilization to identify cost
impact
• Quickly and easily creates panels optimized for both
assembly and fabrication
• Considers panel size, rail widths, margins, moat
width, number of boards and component overhang
• Stores the panel guidelines of all your fabrication and
assembly partners
• Performs actions including pattern filling, addition
of tooling holes, fiducials, bad board marks, targets,
text, barcode, breaktabs, v-score lines and rout Figure 11. The panel assistant shows every possible optimization method.

• Creates and places breaktabs while automatically

avoiding the placement of a breaktab under a Valor NPI has all the features required for both the
component assembly and fabrication processes. As figure 12 illus-
• Analyzes the assembly panel for DFM issues at the trates, the features include fiducial marks, conveyor
panel level edge, tooling holes, breaktabs, moats, pattern fills,
impedance bars, etc. With these features, the panels
Valor NPI has placement model selection assistance to designed in Valor NPI can be delivered to PCB fabrica-
get you started. The panel assistant (figure 11) shows tors for direct manufacturing without extra editing by
the available methods for designing panels. When you suppliers.
select a method, you will see the specific required infor-
mation and the panel design will be created. When
optimizing assembly panels, the ideal size is dependent
on the size of the targeted fabrica¬tion panel. This
optimization solution takes a minimum and maximum
number of requested arrays with the targeted panel
size(s), then creates and shows you all the assembly
panel design alternatives prioritized by material usage
percentage.

Figure 12. Panel design with all the features required in assembly and
fabrication process.

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 White paper | Lowering PCB costs with material utilization

Conclusion

Product cost, including the PCB, is ultimately your com-

pany’s responsibility. Although PCB fabricators certainly
optimize the fabrication panel based on the constraints
of the assembly panel, you aren’t always aware of the
cost implications of their PCB or assembly array until it
is too late. Controlling the panel design and optimiza-
tion in-house during the PCB design process lets you
reap considerable cost savings on material, and reduces
process time, thereby accelerating your time-to-market.
The panel is what you are being charged for so make
sure your panels are cost optimized and DFM validated
to minimize the number of panels required for your
order.

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Siemens Digital Industries Software About Siemens Digital Industries Software
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