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MANUFACTURING ANALYTICS AS A

COMPETITIVE STRATEGY

W H I T E P A P E R

BY FARID ANANI AND JAY GORAJIA

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Manufacturing Analytics as a Competitive Strategy

What if a manufacturing company could provide information to enable its customers who are looking to
improve their component selection process, ideally choosing parts with the lowest defect rates and
counterfeit rating? What if a manufacturer could provide design-for-excellence (DFx) information about every
revision of a product, how it compared to the previous revisions (not only the last revision) to ensure
violations and waivers were monitored and ensure corrective actions were truly done, and old violations were
not re-introduced in a future revision? How much would design customers value a dashboard with production
status, roll throughput yield, and running defect correlation to design best practices for their products? What
if a manufacturer could provide a service to monitor quality metrics per product or program, further
strengthening collaboration with the design customers and allowing them key insight as to how designs can
improve over time, which would also lead to improved customer service and customer retention? All this
could be done by leveraging manufacturing analytics information, perhaps providing opportunity for
additional revenue.
This paper defines a manufacturing analytics strategy blueprint and explores how a successfully designed and
executed manufacturing analytics strategy may be leveraged to improve competitiveness and dramatically
improve the ability to provide collaborative services to customers.

WHAT IS ANALYTICS?
Some industry experts assert that we are in the early stages of our 4th industrial revolution (or Industry 4.0)
[1]. This is largely characterized by very smart and well-interconnected production equipment that is expected
to be able to govern the production process on its own. There is no shortage in the amount of available data
coming from each individual piece of equipment to let the factory know every relevant piece of information
about what it is doing, what product it is building, how fast, and what
its materials utilization is, just to name a few. This data is made
Analytics is the discovery
available to the other machines in the factory so that decisions can be
made based on its contents. Unfortunately, technology has not fully
and communication
caught up to the massive amounts of data available yet. Bala
Deshpande said [2], The role of data in manufacturing has traditionally
of meaningful
been understated.

patterns of data.

He also said, Manufacturing generates about a third of all data today,


and this is certainly going to increase significantly in the future. Some
WIKIPEDIA
of it gets collected and stored for future needs, while other data is
simply ignored because of the lack of knowledge regarding what to do
with it or the lack of tools to effectively access that data. However, we
are not only interested in the meaningful patterns; more importantly, we also want to know to leverage those
patterns to create new growth and improve business. In this case, analytics is a means to an objective.
In a recent article [3], Jim Kilmer (Group Vice President at Verizon Enterprise Solution) said Companies that
make large products or systemslike aircraft or locomotive manufacturershave a lot of data, but in the past
theyve just used it internally or talked to their clients about it. Now they are looking to monetize that data.
The ability to create systems to become revenue streams has really changed the way some CIOs do business.
He added by the same token, that tsunami of data is really overwhelming their ability to gain analytics and
insights. Theyre going to need a good strategic plan for how to capitalize and monetize this emerging trend.

RESISTANCE TO CHANGE
The idea of using the data collected in a new way, for a new purpose, and investing in new analytic strategies
requires manufacturers to change how they think. Human natures natural resistance to change is the obvious
risk of discussing relatively new technologies and topics such as manufacturing analytics in the context of
competitive strategies. According to Everett M. Rogers in Diffusion of Innovations, the landmark 1962
textbook that popularized the study of how new ideas and technologies spread through societies and peer

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Manufacturing Analytics as a Competitive Strategy

groups, this is what we know today as the adoption curve, as seen in Figure 1 [4]. Early adopters make up
13.5% of the group who will adopt an innovation relatively quickly.
As with many technologists and entrepreneurs, the
early adopters are viewed as the thought-leaders. In
business, they drive customer demand by being ahead
of their competitors and provide new types of value to
their customers as few others can. It is also those that
can demand higher rates for these new services and
values. As they say the early bird catches the worm. To
create new services is first to define what those services
should be, and then set the bar and standard for the
rest of the peer group.
Change is inevitable. Forty years ago, bare-board
manufacturers used bomb-sighting machines to
create drill programs, and designers around the world
were using light tables and tape to lay out tracks. As
technologies became more complex and competition
grew, manufacturers had to be able to handle those
Figure 1: The adoption curve [4]. complexities, be faster, more accurate, and still make
money. This pushed them to invest in computer-aided
design and manufacturing (CAD and CAM) systems.
Fifteen years ago, a standalone design-for-manufacturing (DFM) system was incredibly difficult to justify
within manufacturing. Few invested in it. Then, the early adopters brought in a DFM solution and built
services around them. They benefited from becoming partners and increased the value they could provide to
their customers, while adding another revenue stream or solidifying future revenue. A 2010 Aberdeen Group
benchmark study said that best-in-class companies are 53% more likely to leverage design-formanufacturing tools [5].
In todays competitive marketplace, companies are constantly looking for new ways to differentiate. Again,
change is needed, and it is inevitable.

WHY IS ANALYTICS IMPORTANT?


All manufacturers agree on the need to collect and analyze data to extract actionable intelligence.
Improvement initiatives such as Six Sigma and Lean Six Sigma rely on data collection, analyzing, and reporting
collected data to further define and improve processes. Quality management systems are put in place to
ensure the quality of products and to monitor production.
Some of the reasons why data is collected, and hopefully analyzed, today are:
1. Internal KPIs: The manufacturer has a need to measure and display key metrics that are deemed
important to the situation. Several KPIs typically collected and reported include line utilization, machine
performance, feeder performance, overall equipment effectiveness (OEE), first pass yield, rolled
throughput yield (RTY), performance to schedule (on-time shipments vs. all shipments), and the rate of
successful new product introduction (NPI).
2. Customer Retention: Todays customers are not only interested in getting quality products and on time,
but they also want to know that the supplier has a sustainable quality management system (QMS).
Having access to the manufacturers quality and other metrics is a QMS requirement.
3. Compliance: Major technology segments, such as automotive, medical, military, aerospace, and others,
have stringent compliance requirements. Traceability and build records for their products must be
maintained. In the case of aerospace and military, those records must be maintained and reportable
many years after their production. Many suppliers find themselves struggling to provide this evidence
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Manufacturing Analytics as a Competitive Strategy

without the right infrastructure. In many cases, they have data collection, but because of their disparate
systems or sometimes manual systems, they are challenged to provide accurate data in a timely
manner.
Looking forward, there is another reason to collect datato drive business. Although not obvious, the
tremendous amount of data collected today is ripe with information. Extracting knowledge from that
information is key to defining value, as any data scientist would say. Knowledge about customers data and
buying patterns while correlating manufacturing information would have immense value that could be
monetized. Going through the process of data analytics, including problem formulation, method choice,
solution evaluation, and general strategy formulation should lead to new business models and opportunities
for growth.

PREREQUISITES
This creating value that can be monetized is at the core of manufacturing analytics. Analytics is still a product
of good data collection, but with the end value in mind. Deciding which data should be correlated and what
analytic models to use should be done carefully, because as Figure 2 describes below, garbage in, garbage
out, in both the quality of the data and the analytic model.

REMOVING TECHNOLOGY CONFUSION


When discussing analytics today, there is a natural tendency to
associate this topic with just the infrastructure of Big Data. Bigdata infrastructure is used by retailers to track user web clicks to
identify behavioral trends that improve campaigns, pricing, and
inventory. Utility companies use it to capture household energyusage levels to predict outages and to invent more efficient energy
consumption. Governments are using it to try to detect and track
the emergence of disease outbreaks via social-media signals. Big
data is new and unique in collecting large amounts of data to be
processed quickly with complex correlations.

Figure 2: Garbage in, garbage out.

Databases such as Apache Hadoop or other NoSQL databases


with analytics infrastructure such as MicroStrategy and others are big-data technologies. After the volume of
data is reviewed, there are many options. Traditional databases such as Microsofts SQL Server, Oracle, and
others may still be just as effective in leveraging manufacturing analytics for competitive strategies. Lets not
confuse the technology with the goals.

DATA SOURCES
Several different, and currently disparate, systems have to come together into an analytics engine to achieve
the level of analytics needed. Those systems typically would include:



Enterprise resource planning (ERP)


Design for manufacturing
Manufacturing execution system (MES) and/or quality management system (QMS)
Supply-chain integration software

Most ERP systems include the accounting and purchasing of materials and, in many cases, also maintain the
inventory and high-level scheduling. From ERP, information about purchasing trends of components,
availability, lead-time plans vs. actuals, obsolescence, and, most importantly, cost would be available.
A DFM solution would provide risks, cost avoidance opportunities, and constraints adherence. Issues that may
affect the manufacturability of a design would be identified early, as shown in Figure 3. Manufacturers are
able to price their services more accurately and can show cost-drivers in a more granular way. For example, if

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Manufacturing Analytics as a Competitive Strategy

DFM analytics show that a certain design issue is likely to


decrease yields by 2%, then price can be adjusted
accordingly.
For the purpose of putting manufacturing analytics in
place, running DFM on a design-by-design basis is not
enough. That information must be parameterized so that,
for every design analyzed, information is stored to run
reports and correlations against. Typical DFM reporting
outputs, such as the one shown in Figure 4, should be
further extracted so that meta-data regarding the origins
of the design and customer are associated with the
components information and board information to
connect the issues found.
Another important system that should be ideally
integrated into the analytics infrastructure are MES and/or
QMS system.
Figure 3: Compliance to manufacturing guidelines.

Figure 4: Typical DFM report output.

Line utilization, machine performance, feeder performance, OEE, first pass yield, RTY information tied to the
stages in manufacturing, then to design information, components, materials, customers, and revision should
be accessed and fed into the manufacturing analytics engine (Figure 5). Powerful correlation data is available
when integrated, for the use of building new business models by manufacturers. This is the most complex
integration, but it also provides the highest potential value.
Finally, integrating supply-chain sources into the manufacturing analytics would be ideal. Several data
aggregators in the industry provide this information through Web-based connectivity tools for automatic
query and retrieve capabilities. IHS CAPS Universe and Silicon Expert Technologies are a couple of
component data providers, although there are several more.

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They provide a lot of detailed data, including:








Electrical part parametric data


Part obsolescence
Part change notification (PCN)
RoHS/compliance
Market part availability
Lead time (from vendor partners)
Inventory information (from vendor
partners)
Cost
Also, the Electronic Components Industry
Association (ECIA) maintains a list of partner
companies [6].

STEPS FOR LEVERAGING


MANUFACTURING ANALYTICS

Figure 5: Manufacturing data collection.

1. UNDERSTANDING VALUE AREAS AT CUSTOMERS SITES


One of the key success criterion to using manufacturing analytics to build new business models requires an
understanding of the customers flow. Where in the OEMs design flow can factories add value?
In a typical PCB design flow, as shown in Figure 6, several stages would benefit from information that would
be provided by a manufacturer.

Figure 6: Typical PCB design flow stages.

2. LIBRARY AND PART MANAGEMENT


Early in the product development flow, engineers select components and other hardware that will most likely
be used in the final product. This is normally a selection based on electrical parameters that meet the design
functional requirements. In an interface, shown in Figure 7, the engineer selects from multiple options that
may have similar function and form.
At this stage, however, vital component information may not be available, and the selection of the component
will then lead to using outdated components, costly components, or components that have a history of
counterfeit or quality issues. The following information would be ideal at this stage:





RoHS status compliance


Cost
Defect rating based on manufacturing actuals
Obsolescence before end of life
Counterfeit ratings
Compliance to manufacturing constraints and design guidelines

If a factory puts the manufacturing analytics infrastructure in place to collect, organize, and build analytics
around component-related defects, coded to the vendor, vendor part number, distributor, and related form
factor and functional capabilities, this would provide valuable insight into component usage data and related
yield-related risks. Again, as the various systems become integrated into the manufacturing analytics engine,
adding supply-chain information, the correlation information can be organized and presented to customers,

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Manufacturing Analytics as a Competitive Strategy

as additional value-add services. This correlation package


would be a powerful way to get closer to customers, further
solidifying customer retention, and adding value far beyond
manufacturing products for them. Manufacturers could reach
a new level of partnership, for which OEM designers would
see great value.

3. DESIGN CREATION AND LAYOUT


Leveraging DFM solution integration in a manufacturing
analytics engine can be a powerful business driver for
customer value. As mentioned above, the role of the DFM
Figure 7: Typical designers schematic interface.
solution is to review each design revision for manufacturing
risks to yield, design compliance, and cost avoidance.
However, if a manufacturer would have a way to create a DFx scorecard of the previous revision into the new
revision project to track DFx board-by-board within a product development project, this would be vital
information for a design organizations ability to improve their designs, not to mention improve their internal
capabilities.
In our discussions with OEMs and manufacturers, recurring issues are evident. The DFM solution may have
identified a violation, and it was asked to be fixed. In revision 2, it is truly fixed. However, in revision 3, the
violation recurs, perhaps because of a change in the design engineer or a flaw in the design process; either
way, knowing this information would dramatically assist the design organization and add business value.
In addition, extraction of design properties and characteristics such as the ones listed below, would further
improve the intelligence of the data and add value to the correlation of the analytics. The more design
parameters extracted and saved as meta-data, the more correlation data can be created. There should be over
100 design parameters available, such as:
Minimum finish-hole size

Layer count

Drill-layer count

PCB thickness

Micro-via size

Buried-via size

Blind-via size

Number of via drills

Number of Pth drills

Number of NPth drills

Board-size width

Board-size length

Component-count top

Component-count bottom

Component count

Pin-count top

Pin-count bottom

Pin count

Combining design parameter extraction with DFx-result score-carding would further allow an analytics engine
to provide correlations on the problem areas to help predict future issues. Hypothetically, if violation X occurs
when a certain combination of design properties are present, we can model that correlation in the analytics
engine. This is the basis of predictive analytics.

4. ADDING VALUE TO ASSEMBLY, TEST, AND INSPECTION


Todays assembly, test, and inspection equipment can provide large amount of varying data at high speeds
regarding performance, quality, and traceability. Being able to mine this data in real time to obtain actionable
intelligence will reduce defects and rework costs as yields and throughput rates are improved.
How can manufacturers use this data to build additional business value with their customers?

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Manufacturing Analytics as a Competitive Strategy

The answer is in the correlation provided by an analytics engine. Figure 8 shows an example of how this can
be done. When an initial revision of a design is sent to a manufacturer, data correlated from the DFM solution
and QMS can be graphically depicted into a hotspot map for the customer, identifying areas of highest
defects, before a revision spin (ECO/ECN) is sent.
Designers recognize the value in
knowing where quality issues are, and
having that information at their fingertips would be highly valuable, to improve
the quality of their designs, and to
manage target costs.
Computrol is a US-based contract
manufacturer focused on low-to-mid
volume production. The companys
president, Charlie Scott, Sr., commented
about how analytics provides value
added to their business.
Computrol uses an analytics strategy
Figure 8: Hot spot map.
engine or business intelligence (BI) for
several different things. The BI dashboard
gives real-time feedback on products that are in WIP. We use BI for weekly SPC data (FPY, % rework and DPM
levels) to spot trends on products that we are currently running in each area of assembly, he said. We track
and trend our top defects over the last 90 days so that we can focus engineering efforts on the biggest issues
first. Operators/inspectors view defect and SPC data from previous runs to know what defects and locations
were problem areas in the past. BI allows us to generate custom reports for anything that we have collected
data on. We have the ability to generate defect and SPC reports that we can send to our customers so that
they can see data specific to their products. BI also tracks specific serial number history. It allows us to see
what has been done to each board, by whom, and when it was done.
Leveraging this data to partner with customers would create higher demand for manufacturing services,
greater customer retention, and most importantly new avenues for business value.

5. ANALYTICS DURING POST-PRODUCTION


Post-production analytics does not get too much attention typically. It is often overlooked unless a
catastrophic event happens resulting in a major recall of products. Most companies are investing their
resources in engineering and designing the next product, and spend less time on extracting value and lessons
learned from existing products already released to the market. This can represent missed opportunities for
enhancing existing and future designs.
Post-production is probably one of the more complex and challenging areas because field returns and repairs
are not handled the same way production is. There is no data being automatically generated and ready for
capturing. However, companies that do not invest in thoroughly analyzing repair data can put themselves at
risk. These results could point to a common latent failure that was not detected or expected early enough.
This is an opportunity to:
1. Influence the design, layout, and component selection of the next product generation.
2. Influence designs of other product lines that may be managed by different groups, or worse yet, in
different global regions.
3. Improve the manufacturing process.
4. Improve the test coverage and strategy.

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Trends on a particular model, or a certain lot of a specific component can be easily identified. Data analytics
for field repairs and returns can aid in a comprehensive and accurate root-cause analysis regarding why
products are failing in the field. Its an easy way to see if a unit has been previously returned and why. The
analytics engine can help determine the true mean-time-between-failures (MTBF) for each product so the
stakeholders can see if the MTBF is within acceptable limits and provide this vital information to program
groups within OEMs. Partnering services in this area is not new, but with the right manufacturing analytics in
place, it would add further business value to the type of dashboards and knowledge about products.

CONCLUSION
The intention of this paper was to define and quantitatively confirm how a manufacturing analytics strategy,
when successfully designed and executed, may be leveraged to improve a manufacturers competitiveness
and dramatically improve their collaborative services to their customers. Although more than 20 OEM design
groups and contract manufacturers were contacted, many of whom provided ample qualitative information,
the topic of analytics to this degree may be too new to be confirmed quantitatively.
While many companies have implemented a DFM solution, and have deployed various factory systems such as
MES and QMS systems to collect data on the factory floor for the most part, electronics manufacturers have
not yet figured out how to fully leverage the massive amount of production data, which is readily available, to
gain significant improvement in productivity (cost-efficiency) and to leverage this data to drive new business
growth.
Jaakko Paavola, MES Manager at Salcomp, a Finnish-based contract manufacturer with several plants around
the world, stated that they have collected and stored terabytes of production and quality data from their
production floor over the years. He further
mentioned that due to the lack of an analytics
engine, which is powerful enough and intelligent
Companies that capitalize on
enough, much of the data just sits there in memory
spaces. In other words, not providing any added
predictive analytics are achieving
value or competitive edge.
Paavola added that Salcomp does recognize the
need for analytics and is considering several
options for this purpose in order to improve
visibility and gain a better insight about their
factorys performance.

new breakthroughs in business


process improvements and cost
efficiency. These organizations are
using insight and innovation to
strategically position themselves
to capture marketshare. [7]

Manufacturers not only can use analytics internally


to boost business performance. The tremendous
amount of data collected today may be ripe with
information. Extracting knowledge from that
information is key to defining value. Knowledge
about customers data, and buying patterns while correlating manufacturing information would have
immense value that can be monetized. Going through the process of data analytics, including problem
formulation, method choice, solution evaluation, and general strategy formulation should lead to new
business models and opportunities for growth.
Computrols marketing director, Jon Hanson said, A good analytics strategy engine is vital for a world class
electronics contract manufacturer like Computrol. Not only does the tool help us understand what our driving
factors are in production (good and bad), it helps us share that information with potential and existing
customers. Being able to gather, evaluate and share data easily, helps us to talk the talk, and more importantly,
walk the walk that our customers expect from us.
Many contract manufacturers confirmed that manufacturing analytics strategy when defined, designed, and
deployed at a manufacturing organization, with the right integration with data-collection systems,
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supply-chain integration systems, and a DFx solution, may be leveraged to create predictive analytics, fortify
partnerships with customers by providing never-before seen correlations of customer data, and develop new
business offering to further improve a manufacturers competitiveness, while dramatically improving their
collaborative services to their customers. This paper outlines many of these high-level approaches, ideas, and
strategies. Furthermore, during our research, OEM design organizations confirmed that such services would
dramatically improve their partnership with suppliers, and improve overall design quality, cost, and design-tomarket timeframes [8].
For more information on how the Valor Manufacturing Solutions Suite of tools can help to use analytics
effectively and improve competitiveness, visit us at https://www.mentor.com/pcb-manufacturing-assembly/.

REFERENCES
1. John Donovan, Mouser Electronics, The 4th Industrial Revolution Is Upon Us, ECN, October 29, 2013.
2. Bala Deshpande, Simaphore, How predictive analytics can shape manufacturing of the future, Proceedings of
Predictive Analytics World Manufacturing, October 1, 2013.
3. Maria Montenegro, Verizon, Why Manufacturing CIOs Must Harness Data Analytics, Verizon Enterprise News, June
24, 2015.
4. Rogers, Everett M., Diffusion of Innovations (first edition). Glencoe: Free Press, ISBN 0-612-62843-4, 1962, p. 150.
5. Michelle Boucher, Aberdeen Group, PCB Design: A Guide to Optimizing Design Engineers, 2010.
6. ECIA, http://www.ecianow.org/membership/member-directory/
7. IBM, Business Analytics for Banking: 3 Ways to Win, September 2010, p. 3.
8. This paper was originally published at SMTA International, September 2529, 2016, Rosemont, Illinois, USA.

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