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Manufacturing costs are under continuous pressure. One can claim, that manufacturing costs have risen year after year. The increase in cost is due to many things such as the price of component costs, labor costs and quality costs. Quality is affected by many factors one of them being production testing. However, testing does not have to be a mandatory evil but can be translated into efficiency and benefits for the company.

Many companies have seen that the similarity in test equipment and test methods on production lines can improve overall efficiency. Standardization of testing is one essential part of achieving efficiency. Standardization requires ownership of testing and continuous work which then minimizes the total cost of ownership.

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It is a bold but justified statement to say: without the ownership of production testing, companies won’t poses a transparent view of the manufacturing cost structure and can lose power in manufacturing cost negotiations as they will lose control of total cost as well.

1. Insight into testing leads to better quality for products

By taking strong ownership of production testing, companies can better control their production quality and understand the costs caused by quality issues during the manufacturing. The analysis is based on test data that enables the control of total cost of Production.

By taking strong ownership of production testing, companies can also see the overall test coverage better. Having a comprehensive understanding of the test coverage will help different departments and functionalities in companies to gain valuable knowledge of production quality.

During the ramp-up phase of a new product, it is important to analyze test results and gain understanding of statistical behavior of various parameters. During R&D it could be challenging to analyze the effect of real-world variations in component tolerances and the manufacturing process to the performance of a product. Having ownership of testing and full visibility to test data, will speed up the flow of quality feedback to the design team and responsible people. With this information, companies can design and produce better products for the markets.

Without test data, it is difficult to distribute critical and valuable test and production quality results to R&D and production departments. By standardizing the format of test results and owning the actual test results, it becomes easier to communicate within your company, and manage the factors that affect the production quality. Moreover, common testing practices allow for comparisons between products and drive towards continuous improvements and increased efficiency.

2. Understanding the lifecycle cost

Testing costs could have a significant effect on the unit price of a certain product. It is important to understand the total lifecycle cost of testing. The effect of standardization on the optimization of the total lifecycle cost are often underrated or even misunderstood.

There is no easy way to measure the business impact of higher quality or shortened time to market without having an understanding of the total cost of design, commissioning and operating the test systems as a part of product lifecycle investment.

In reality, the cost of an automated test is far more complex than just the investment cost of a test rack and the operator’s hourly rate.

Graph_Total cost of ownership.jpg

Total cost of ownership consists of several factors in test system design, commissioning and operative phases as shown in Figure 1 above.

By investing in designing, commissioning and operating costs can be reduced. In some cases, the design costs associated with building an automated test system are equal to the commissioning, operating and maintenance costs. Typically this is misunderstood by product companies that put a lot of effort in reducing cost in the design phase.

Modular and standardized test system can be used for several products by changing the product specific adapter. When making a first test application to such a system, the investment is higher, since it contains the base system with instrumentation (often build into test rack). The same base system can be then utilized in upcoming projects, without the need for investment to instrumentation. However, the utilization of the same base system requires some standardization in testing methods. Over the time, the cost of new test applications shall decrease if the same instrumentation and common testing methods can be applied.

Mature test organizations who work in close cooperation with R&D teams can influence the design of products so that standardized test methods can be applied. Design for testing (DFT) should be included into the R&D process in order to promote standardization in testing and optimization of total cost ownership of testing. Ready-made hardware platforms and software components decrease the original investment costs. Standardized testing methods leads to reusable SW libraries and HW components not only in the test system but also in the product itself.

3. Efficiency in the operational and maintenance phases

Commissioning costs are typically rather low but the lack of standardized procedures and tools in transportation and in the introduction of a test system into factories may cause unnecessary delays and costs for the production owner. Unprofessional ways of working during the commissioning can also reflect bad habits in the operational phase.

The operational and maintenance costs of a test system are often overlooked or underappreciated. These cost aren’t typically a write-off by the R&D team that originally designed the product but for the manufacturing and product engineering organization who is responsible of manufacturing and taking care of the operational tasks.

This separation of cost centers makes cross-organizational cooperation a common pain-point and will obscure the impact of real ownership to total cost. Operational costs can be reduced significantly with standardized methods like documentation and guidelines, standardized test data formats and test data analysis. Standardization of test systems promotes common methods for maintenance, which enables efficiency; for example a shared spare part inventory for all test machines. The maintenance should be instructed in a way that personnel dependencies can be minimized.

It is common that production is organized globally. Local maintenance personnel of each factory should be able to do the daily maintenance tasks of the test system without support from the product owner or the test system provider. Operational costs in a long product lifecycle, which can be over ten years for an industrial product, could be the biggest driver in total cost. This is something that is commonly forgotten or greatly misunderstood.

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