This section reviews an actual project which began with expectations for building a test system for one product with highest production volume and ended with utilizing a test system designed to handle multiple product models.
This outcome is not uncommon. Companies have a market niche and many of their products within a single line all have the same basic functionality: the products have a range of specifications and yet all look similar to the ATS.
The particular product line analyzed in this example had multiple versions, each with different output ranges. When a test system expands its testing capability to encompass a product line rather than just one product, the incremental cost of adding a few additional features to the ATS can be spread across a higher production volume. Any NRE design and development time is then at a reduced per unit cost.
The numbers used in this example are actual but the company name is withheld for privacy reasons.
Analysis for One Product
Initially, only a single product – Product A – was considered for testing and was chosen because it was the highest volume product.
The company had detailed work instructions for testing Product A via manual testing. The model in Eq. 1 was analyzed for this manual testing and parameter values were determined by the manufacturer to be as follows.
h = 12.5,
t = 25 (includes time for operator to run test and engineering to review results),
d = 0 (test results directly indicated required repairs),
r = 120,
S = 0 (all parts are reworked),
D = 0,
W = 800,
F = 0,
pt = 0.2 (actually 20% due to manual tuning steps rather than poor manufacturing),
pf = 0,
pw = 0.
Then, C = $69 per unit. Note that costs associated with field repair, warranty handling, and database management were neglected.
ATS Cost Estimate
Based on the requirements for testing this product, the cost of designing and building the ATS was estimated to be:
- $6200 for the test station, including the material cost of the hardware and software components and the labor cost to build the test rack.
- $31000 for NRE (non-recurring engineering) to design the test rack, develop the software, test and debug the system, train the operators and engineers, and provide documentation.
Note that this system was deployed with a test executive application which allowed the manufacturing engineers to create new test steps and edit existing ones. The engineers requested training on the test executive tool, and that cost is bundled into the NRE.
Analysis for One Product Using ATS
With this ATS in place, we estimated the following parameter changes.
t = 2.5.
Then, C = $42 per unit.
The cost savings of having a test station were estimated to be $27 per unit. With an annual unit volume for Product A of 180, the savings are $4860 per year. The cost of the ATS was estimated at $37200. Thus, payback on the test automation was about 7.7 years, an unacceptably long time.
Certainly, there are intangibles in having a test system that are hard to quantify financially, such as improved test reporting to help analyze most prominent failure modes leading to a better design or manufacturing procedure. However, management thought this payback time was unsatisfactory.
Analysis for Multiple Products
Since the manufacturing company made several similar product models, we reviewed the cost increment of supporting additional product models. Since these additional models could be tested with the same test hardware as needed for Product A, the modifications to the ATS were limited to additional test procedures, easily accommodated by developing new test steps. The additional cost was estimated to be $10000 to develop the new step types and $2000 per product model to create a model-specific test sequence and association test limits. These appended products were then analyzed by using Eq. 1. Cost savings across the various product models were determined to range from around $27 to $35 per unit with product volumes ranging from 180/year (for Product A which was originally thought to have a sufficient payback) to 36/year on the low end.
Averaging all the costs associated with the extra product models produced an annual savings when using the ATS of $27000/year while increasing the ATS development cost by $34000 to $71200. The payback was then 2.6 years, which was deemed acceptable by management.
- This approach worked because the ATS was not fully utilized with the one “high-volume” Product A so that the additional product models could be tested with one ATS. If an additional ATS were needed to accommodate all the product test time, then the cost for an additional ATS would have been roughly $10200, which includes $6200 for the ATS equipment (see above) plus a setup time and effort of about $4000. Including this nominal amount, the payback time would have increased only about 0.5 years for double the manufacturing test volume.
- This manufacturing company was fortunate to have many product models that used very similar test steps. Each product model had different test procedures, but every procedure repeatedly used about 10 unique test step types. This reuse provided great leverage in development costs.
- The test engineers were willing and able to learn how to develop new test sequences to match their well-documented test procedures. Thus, the costs associated with developing new test sequences were minimized.