Quality Risks in Outsourcing

Contributing Authors: Bob MacLevey and Mike Silverman

Today, more and more companies are outsourcing their designs to Original Design Manufacturers (ODMs) and outsourcing their manufacturing to Contract Manufacturers (CMs). Whether we are going to China, India, Mexico, or Eastern Europe, the fact remains that as we outsource our design and manufacturing, we are outsourcing the quality of our product.

But this does not mean that we have to lose our ability to control our quality. It just means we have to use new and innovative methods to assure good quality. And we need to stay on top of the situation.

Here are some of the risks and how we can control them:

1. Lack of Control over Design Process
2. Lack of Control over Manufacturing Process
3. Lack of Visibility into the Manufacturing Testing Process
4. Correlation of Field Failures to Production Failures
5. Driving Changes in Production to Improve Quality

2. Lack of Control over Manufacturing Process

2.1 Identifying the Process Capabilities

2.1.1 What is the inherent failure rate of the production line?

Every production line has an inherent failure rate, often referred to as the process capabilities. It is important to understand exactly what is contributing to the yield loss. Pick and place equipment, test equipment and even the operators affect the yield. Since you do not own the process or equipment, it is very difficult to characterize it and identify the contributing factors to yield loss.

2.1.2 Are failures induced by the production line?

Failures can be generated by the production equipment and/or personnel. Electrical Overstress or Electro Static Discharge is created by many sources, such as poorly grounded equipment or people not properly wearing grounding straps.

2.2 Quick and timely identification of inferior material

Since the production line is typically offshore there is a time lag between when failures are detected and when the data is reported. At best it is hours but more often than days.

This means when yield problems occur, typically you find out about it only after the product has shipped.

2.2.1 Inventory control

Inventory control is a problem with outsourcing. Obtaining information on inventory levels is difficult, especially if you need to determine inventory levels by Date Codes.

2.2.2 Ability to quarantine suspect material

When problems are identified with a material, it is difficult to quarantine the material. When parts are suspected as causing a problem and further investigation is needed it is difficult to quarantine the material while the investigation is being performed. Often the suspect parts or boards have to be returned to the engineering group for the evaluation. Since it takes days to get faulty material in the hands of the engineer, valuable time is lost. Often there are problems with communication channel with the offshore facility.

This happened with a CM in Asia where the line yield went from 92% down to around 82%. When the OEM learned this, they wanted to quarantine the material for further testing, but the CM misunderstood. When the material arrived at the OEM, they discovered that only the failing material had been shipped to them. When they inquired about the entire lot, they learned that it had been shipped to customers.

3. Lack of Visibility into the Manufacturing Testing Process

3.1 Quick and accurate data reporting & analysis

This can be a real issue. Often the data is spread across different databases and reports are lacking in complete and real information, which makes it difficult to analyze. Data can be duplicated inadvertently, which results in a lot of data but not much information, making it difficult to take proper corrective action. It can also be difficult to determine if previous actions taken were effective.

3.2 First pass yields

By the time you get first pass yield data the material has most likely been shipped to customers.

3.3 Analysis performed on failures

3.3.1 Depth of analysis performed

Accurate and complete failure analysis on line failures is impossible. The production people do not have the skills or knowledge of your product to be able to analyze failures. Therefore, failures must be shipped back to the engineering group or failure analysis group for analysis. This can take weeks and determining if the material from this production run should be shipped or quarantined is impossible.

3.3.2 Rework

In order to determine if rework should be done, how many times a board can be reworked, or which parts can be reworked, can be difficult when outsourcing. How do you assessing the quality of the rework?

3.3.3 No Fault Found

No fault founds or false failures can be issues difficult to resolve. There have been reports of intermittent failures being shipped to customers because the boards passed the second time or in some cases the third time they were tested.

3.3.4 Bone pile

Without the proper test verification and failure analysis the boards that end up in the bonepile can accumulate quickly. Most contract manufacturers get paid for the boards out the door and this is where they put most of their efforts. Who is responsible for line failures?

3.4 Feedback on Manufacturing Screening/HASS

3.4.1 Setting up the Screen

Setting up a manufacturing screening process can be tricky and if not done properly, can induce failures. Good communication is required between you and your CM for this to be implemented successfully.

3.4.2 What failures is HASS finding

Closely monitoring the HASS process is essential because the failures from HASS will be a sign of the process shifts that are occurring.

3.4.3 When and how to tweak the screening profiles

Frequently we want to tweak a profile to optimize it especially early in the manufacturing process. After a design change is made, we will usually have to re-prove a screen and make changes if necessary.

4 Correlation of Field Failures to Production Failures

One great method of continual process improvement is to closely monitor the field results and then to change the process accordingly.

4.1 Test escapes?

This may require changing the testing process if we determine that the cause of the escape was due to lack of test coverage.

4.2 Production generated failures?

The mistake may have been something that testing cannot find but inspection is the answer.

4.3 Intermittent failures?

Correlation of field failures is an important part of process improvements. Are the failures something that should have been screened out during production testing (Test Escapes) or are the failures being generated by the production line? Having the ability to run the failing material through the production testing again to see if it now fails is extremely important, but difficult to manage. If the field failure still passes production testing do you have the ability to improve the test program? Are the proper people in the proper place to manage this?

5. Driving Changes in Production to Improve Quality

5.1 Do you have control to do this?

Quality improvements come in various ways. In some cases it's personnel related and in other cases it is equipment related. Improvement can come from changes in process flow and the handling of the material, as well as how material is stored and inventoried. CMs can make changes on the fly without notifying you, and often what they say is not exactly how it is being performed. You need to walk the process often to ensure changes are carried out and to ensure other changes are not being made without your knowledge.

5.2 Correlating the effects of change

This is important but difficult with a CM. Obtaining the data necessary to properly access the effects of change is often delayed and does not contain the data needed.

CONCLUSION

Managing your outsourcing means you must take an active role with your suppliers and build a trust relationship. It does NOT mean jumping around to find the lowest price. It may be more expensive at first but it will pay off once you establish the process.

SOLUTIONS PROVIDED

Frequently companies do not have the technical expertise or the bandwidth to manage the quality of an overseas supplier. That is where Ops A La Carte can help! We have consultants in Asia and Europe that can travel to your ODM or CM and either audit the facility and/or work with them to improve their reliability through training and consulting.

We also have a new service called EXPERT REVIEW in which we can review work performed by your overseas division, your ODM or your CM and provide guidance on how to improve.

Mention this article and receive $1K off your next EXPERT REVIEW service.

SigmaQuest enables you to automatically upload & analyze your product, supplier, manufacturing test, RMA/Warranty & repair data using any web-browser. Collapse time to quality by interrogating product yields & marginal measurements, at multiple sites or product lines, all in real-time. SigmaQuest works with all test programs including ICT, X-ray, AOI, Flying Probe, NI LabVIEW, TestStand, LabWindows/CVI, Agilent/HP VEE & others.

SigmaQuest, Inc. | www.sigmaquest.com | info@sigmaquest.com | +1.408.524.3180

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