THE APPLICATION OF PRODUCT PLATFORM DESIGN TO THE REUSE OF ELECTRONIC COMPONENTS SUBJECT TO LONG-TERM SUPPLY CHAIN DISRUPTIONS

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1 Proceedngs of the ASME 2008 Internatonal Desgn Engneerng Techncal onferences & omputers and Informaton n Engneerng onference IDET/IE 2008 August 3-6, 2008, New York, New York, USA DET THE APPLIATION OF PRODUT PLATFORM DESIGN TO THE REUSE OF ELETRONI OMPONENTS SUBJET TO LONG-TERM SUPPLY HAIN DISRUPTIONS Peter Sandborn, Varun Prabhakar ALE enter for Advanced Lfe ycle Engneerng Department of Mechancal Engneerng Unversty of Maryland ollege Park, MD ABSTRAT omponent reuse n multple products has become a popular way to take advantage of the economes of scale across a famly of products. Amongst electronc system developers there s a desre to use common electronc parts (chps, passve components, and other parts) n multple products for all the economy of scale reasons generally attrbuted to platform desgn. However, the parts n electronc systems (especally those manufactured and supported over sgnfcant perods of tme), are subject to an array of longterm lfecycle supply chan dsruptons that can offset savngs due to part commonalty dependng on the avalablty of fnte resources to resolve problems on multple products concurrently. In ths paper we address the applcaton of product platform desgn concepts to determne the best reuse of electronc components n products that are subject to longterm supply chan dsruptons such as relablty and obsolescence ssues. A detaled total cost of ownershp model for electronc parts s coupled wth a fnte resource model to demonstrate that, from a lfecycle cost vewpont, there s an optmum quantty of products that can use the same part beyond whch costs ncrease. The analyss ndcates that the optmum part usage s not volume dependent, but s dependent on the tmng of the supply chan dsruptons. Ths work ndcates that the rsk and tmng of supply chan dsruptons should be consdered n product platform desgn. Keywords: Platform desgn, desgn reuse, electroncs, total cost of ownershp, lfecycle cost, supply chan 1 INTRODUTION onventonal wsdom dctates that the reuse of desgn components across a famly of products generally leads to cost reductons and should be encouraged. Platform desgn (desgn reuse) means that a common platform s reused across a product famly, where a platform s a set of common components, modules, or parts, whch are shared wthn a product famly, [1]. The concept of platforms s commonly Bo Erksson Ercsson AB SE , Stockholm, Sweden used n the automotve, computer, arcraft and other ndustres. The potental advantages of multple products usng a common platform nclude reductons n [2]: nventory, part prolferaton, desgn lead-tme, and the number of dfferent manufacturng (assembly) es requred. Platforms are n essence a polcy of component reuse that attempts to take advantage of the economes of scale across a famly of products, [3]. Many aspects of platform desgn have been addressed n the lterature, [4-8]. Exstng work on platform desgn can be dvded nto three general categores: 1) Platform Specfcaton - for a gven set of products, fnd the optmum platform [3]. Products wthn a product famly may share common features and can be dvded nto sub-categores called varants. The commonalty shared between products across a class or market segment s referred to as leveragng [3]. The leveragng strategy mplemented depends on balancng performance crtera wth a desred level of standardzaton. 2) Product Famly Optmzaton Ths method s dvded nto two categores, top-down and bottom-up approaches [9]. For a gven platform, one may desgn a product famly or estmate an optmum set of products that should be used for a gven platform. Ths s referred to as a top-down approach [9]. The bottom-up approach nvolves fndng the optmum platform for a gven set of products where product archtectures and components are extracted from exstng products for reuse n subsequent products [9],.e., optmzng the platform content (common components and archtectures). 3) Number of Platforms - For a wde market segment, what s the optmum number of platforms to use [3]? The partcular problem addressed n ths paper s the followng: We have a large database of parts, a subset of whch could be used to fulfll a desgn requrement that s common to multple products. We wsh to beneft from the advantages offered by reusng the same part (.e., common component as defned n [10]) n multple products as opposed to usng dfferent parts to fulfll the same desgn requrement. We essentally have a platform consstng of one opyrght 2008 by ASME

2 part and we want to determne, what the optmum product famly for ths platform s. For the context addressed n ths paper, the potental drawbacks to usng the same part n multple products are fnte resource lmtatons caused by the rsk and tmng of long-term supply chan dsruptons for the common part. Long-term supply chan dsruptons refers to problems that make t mpossble for an organzaton to contnue usng the part, e.g., relablty ssues, changes made to the part by the part manufacturer, and unforeseen obsolescence of the part that make t un-procurable. 1 Unlke many non-electronc parts, electronc parts are generally not custom produced for customers and they are quckly obsoleted (see Secton 2). Therefore t s not uncommon for parts and supply chans to change outsde the control of all but the largest customers. Because the type of supply chan constrants we are focused on are part-specfc, not productspecfc, and because we are nterested n optmzng the breadth of use of the part, the cost that s mnmzed s the total ownershp cost of the part as used across multple products. Ths dffers from prevous platform desgn approaches that have sought to mnmze the cost of a famly of products. In our case, product-specfc data s ncluded (e.g., manufacturng volumes as a functon of tme, end of product support, etc.), but t s the cost of ownershp of the part that s mnmzed. Unlke most prevous platform desgn work, we are also dealng n detal wth a lfecycle cost, as opposed to a manufacturng cost. The lfecycle cost s composed of non-recurrng desgn and part selecton/qualfcaton actvtes, product manufacturng actvtes, product feld support actvtes, and long-term supply chan dsruptons. The model proposed by Huang, et al. [11] quantfes platform desgn benefts by comparng supply chan cost at varyng levels of product platform commonalty. Ths s done by assessng the supply chan n ts entrety; a supply chan cost and nventory level s calculated at each stage of the supply chan to obtan a total supply chan cost. Su, et al. [12] propose a method for calculatng the total supply chan cost and customer watng tmes n order to study the performance of mass customzaton postponement structures (tme postponement and form postponement). Huang et al. and Su et al. provde a complete vew of the supply chan from a manufacturng organzaton s vewpont, however, t s nsuffcent for assessng long-term dsruptons durng the part s lfecycle snce t does not account for feld falures, mantenance, and manufacturng defects that play a role n warranty returns and product relablty decsons (postmanufacturng problems). Rather than consderng a partcular supply chan confguraton, ths paper wll dscuss the use of a 1 Shorter-term supply chan ssues encountered by product manufacturng organzatons such as lead-tme, nventory, bad lot problems are not the focus of ths paper. Ths paper focuses on optmal part management for part selecton and management organzatons wthn electronc systems OEMs (Orgnal Equpment Manufacturers). Electronc systems OEMs such as Ercsson, Motorola, Honeywell, etc., have part selecton and management groups who s prmary focus s dentfyng and selectng parts, qualfyng the manufacturers and dstrbutors of those parts, qualfyng the parts for specfc products, determnng the procurement status of the parts, creatng and managng purchase orders for the parts, dealng wth part relablty ssues f and when they occur, mantanng the parts n databases, and resolvng longterm avalablty problems wth the parts. Indvdual product manufacturng s generally performed by other organzatons (external or nternal) that are outsde the control or role of the part selecton and management groups. total ownershp cost model from a part rather than a product vew to mnmze the lfecycle cost assocated wth part reuse. The approach used by the total ownershp cost model s to consder all expenses ncurred by an OEM organzaton n addressng long-term supply chan problems over the lfe of an electronc part. In the next secton, we wll descrbe the problem addressed n ths paper n more detal. In subsequent sectons, the part total ownershp cost model wll be descrbed and example results for dfferent part usage scenaros provded. 2 THE ELETRONI PART SELETION AND REUSE PROBLEM Electronc systems OEMs (Orgnal Equpment Manufacturers) mantan databases that consst of hundreds of thousands of electronc parts, [13]. There s a desre to reuse parts n multple products for all the economy of scale reasons generally attrbuted to platform desgn. In addton, there are several other advantages of commonzng electronc parts that nclude: reducton n the number of Product hange Notces (PNs) that must be managed, reductons n part-specfc qualfcaton testng, and consoldaton of obsolescence resoluton and n some cases subsequent lfetme buys. PNs are ssued by electronc part manufacturers to ndcate that ther part, or the for fabrcatng ther part, has changed. In 2006, over 340,000 PNs were ssued for actve and passve electronc parts [14] where the changes ranged from modfcatons to the part markng and delvery packagng, to parametrc changes and lead fnshes. Over 18% of all the procurable electronc parts wll have PNs ssued on them n any gven year, [14]. The change ndcated by a PN on a part used n a partcular product may or may not be relevant, but every PN must be evaluated to determne f acton s needed. Electronc parts are also subject to hghfrequency nvoluntary procurement obsolescence, [15]. Many electronc parts are only procurable from ther orgnal manufacturer for a few years, then they are dscontnued n favor of newer, hgher performng parts approxmately 3% of the global pool of electronc parts become obsolete every month, [16]. When parts become obsolete, consderable resources must be expended to resolve the problem. A potental drawback of reusng the same component n multple products that has been artculated by electroncs system manufactures s descrbed by the followng scenaro: All of your products use (depend on) a common part. An unexpected problem develops wth the part. Instead of fghtng a fre for one product, you are smultaneously n trouble on every product,.e., you may have effectvely created a sngle pont of falure scenaro by reusng the part. Ths stuaton occurs, for example, when the part becomes obsolete and an acceptable resoluton must be found for each of the products that use the part note, a resoluton that s acceptable for one product may not always be acceptable to another. Ths scenaro becomes an ssue when there are a specfc fnte set of resources avalable to resolve problems across all products, whch s often the case after a product enters manufacturng. Those resources cannot address every product smultaneously and as a result manufacturng or support delays occur. It s not the fact that problems wth parts occur they always wll, t s not that there are nsuffcent resources to solve all the problems, t s the tmng opyrght 2008 by ASME

3 of the problems there are not suffcent resources to solve all the problems smultaneously. Fnte resources (people, equpment, etc.) to address problems becomes an ssue when multple problems or the same problem n multple products occur concurrently and the resoluton to one or more problems or products has to be delayed due to a lack of resources. Several types of supply chan problems can occur. Shortterm (temporary) problems that usually only affect a lmted number of products that share the part for a short perod of tme, e.g., you receve a bad batch or lot of parts. Lead-tme ssues and nventory management are consdered to be temporary supply chan dsruptons that mpact a manufacturng or product-specfc organzaton, and are therefore not the focus of ths paper. Long-term problems such as a fundamental supply chan or wear out problem that affects all products that share the part and for whch a permanent soluton (often a replacement part) must be found. Examples of long-term problems are dscontnuance of the part (obsolescence), a functonal desgn error n the part, and a relablty problem wth the part. For long-term problems, under some condtons, the fnancal penaltes assocated wth the delays may offset savngs due to part commonalty. 3 PART TOTAL OWNERSHIP OST MODEL Total ownershp cost modelng requres an understandng of the product s lfecycle costs. 2 Lfecycle cost represents the total cost of acquston and ownershp of a product over ts full lfe, ncludng the cost of plannng, development, acquston, operaton, support, and dsposal. General lfecycle cost analyss of products has been treated by many authors, e.g., [17] and [18]. The context of ths paper s electronc parts for whch lfecycle costs (besdes procurement) nclude the assessment of part manufactures and dstrbutors [19], qualfyng and screenng parts [20], the mpacts of part relablty [21], warranty [22], sparng and avalablty, obsolescence management [23], and mantenance [24]. The new cost model descrbed n ths paper was developed from the part management organzaton perspectve (as opposed to the product management or manufacturer perspectve) and s ntended to enable fundamental productndependent part management decsons such as retrement of parts from databases, organzatonal adopton of new parts, management of part-specfc long-term supply chan dsruptons, etc. Therefore, the model requres an understandng of the total ownershp cost of a part. Exstng models are manufacturng or product specfc. The new model must comprehend long-term supply chan constrants that are assocated wth specfc parts and flow down to products through ther parts, therefore the cost that we wsh to mnmze s the effectve total ownershp cost of the part as used across multple products. The new part total ownershp cost model s composed of the followng three sub-models: mantenance model, manufacturng model, and a feld use model. Ths model 2 In ths paper the effectve total ownershp cost refers to the lfecycle cost of the part from the part customer s pont of vew, whch should not be confused wth ost Of Ownershp (OO), whch s a manufacturng cost modelng methodology that focuses on the fracton of the lfetme cost of a faclty consumed by an nstance of a product. contans both manufacturng/procurement costs and lfecycle costs assocated wth usng the part n products. The complete formulatons of the models are too volumnous for ncluson n ths paper; however, the followng subsectons descrbe the basc content and features of each of these sub-models. 3.1 MAINTENANE MODEL The mantenance model captures all non-recurrng costs assocated wth selectng, qualfyng and purchasng the part (these costs may recur annually, but do not recur for each part nstance). The total mantenance cost n year (n year 0 dollars) s gven by, ( ) a pa as ps ap mant = (1+ or nonpsl desgn d) (1) where a = ntal part approval and adopton cost. All costs assocated wth qualfyng and approvng a part for use (.e., settng up the ntal part approval). Ths could nclude relablty and qualty analyses, suppler qualfcaton, database regstraton, added NRE for part approval, etc. The approval cost occurs only n year 1 ( = 1) for each new part. = product-specfc approval and adopton. All costs pa as ps ap or assocated wth qualfyng and approvng a part for use n a partcular product. Ths approval cost would occur exactly one tme for each product that the part s used n and s a functon of the type of part and the approval level of the part wthn the organzaton when the product s selectng the part. Ths cost depends on the number of products ntroduced n year that use the part. = annual cost of supportng the part wthn the organzaton. All costs assocated wth part mantenance actvtes that occur for every year that the part must be mantaned n the organzaton's part database such as database mantenance, PN (product change notce) management, reclassfcaton of parts, and servces provded to the product sustanment organzaton. Ths cost depends on the part s qualfcaton level, whch can change over tme. = all costs assocated wth producton support and part mantenance actvtes that occur every year that the part s n a manufacturng (assembly) for one or more products such as volume purchase agreements, servces provded to the manufacturng organzaton, relablty and qualty montorng, and avalablty (suppler addton or subtracton). = purchase order generaton cost, whch depends on the number of purchase orders n year. = obsolescence case resoluton costs - only charged n the year that a part becomes obsolete. opyrght 2008 by ASME

4 nonpsl = setup and mantenance for all non-psl (Preferred Suppler Lst) part supplers depends on the number of non-psl sources used. desgn = non-recurrng desgn-n costs assocated wth the part only charged n years of new product ntroducton usng the part; ncludes: cost of new AD footprnt and symbol generaton f needed. d = dscount rate on money. = year startng at year 0. a, pa, as, and ps are determned from an actvty based cost model n whch cost actvty rates can be entered or calculated by part type. 3 cost per part ste. Ths model assumes that all functonal and assembly ntroduced part-level defects are resolved n a sngle rework attempt,.e., Y rew = 1 (whch mples only a sngle rework attempt s needed), that there are no defects ntroduced n, Y n, N n Reworked N rout Defects (Y beforetest ) Rework (f r, rew,y rew ) N gout Test ( test, f c, f p ) To be dagnosed (N d ) Reparable (N r ) Defects (Y aftertest ) No Fault Found N d1 Dagnoss (f d, dag ) out, Y out, N out 3.2 MANUFATURING MODEL Scrap (N s2 ) Scrap (N s1 ) The manufacturng model captures all the recurrng costs assocated wth the part: purchase prce, assembly cost (assembly nto the system), and recurrng functonal test/dagnoss/rework costs. The total manufacturng cost (for all products) n year s gven by, N = (2) out manuf (1+ d) where N = total number of products manufactured n year out = output cost/part from the model shown n Fgure 1. out s a functon of n = ncomng cost/part = P + n a P = purchase prce of one nstance of the part n year = assembly cost of one nstance of the part n year. a Ths model uses a prevously developed test/dagnoss/rework model for electronc systems assembly modelng descrbed n Fgure 1 and Table 1, [25]. The approach ncludes a model of functonal test operatons characterzed by fault coverage, false postves, and defects ntroduced n test, n addton to rework and dagnoss (dagnostc test) operatons that have varable success rates and ther own defect ntroducton mechansms. The model accommodates multple rework attempts on any gven product and enables optmzaton of the fault coverage and rework nvestment durng manufacturng tradeoff analyses. The model dscussed n ths paper contans nputs to the test/dagnoss/rework model that are specfc to the part type and how the part s assembled (automatc, sem-automatc, manual, pre-mount, after mountng, after mountng SA, extra vsual nspecton, specal ESD handlng see [26]). The output of the model s the effectve procurement and assembly 3 Part type defnton are: Type 1 resstors, capactors, nductors, and mechancal parts; Type 2 ntegrated crcuts, oscllators, flters, board connectors; Type 3 ASIs, RF connectors, RF ntegrated crcuts, D/D, syntheszers, opto TRX; and Type 4 RF transstors, crculators, solators. Fgure 1. Test/dagnoss/rework model. Table 1 descrbes the notaton appearng n ths fgure. Table 1. Nomenclature used n Fgure 1 n ost of a product enterng the test/dagnoss/rework N n Number of products enterng the test/dagnoss/rework test ost of test/product N d Total number of products to be dagnosed dag ost of dagnoss/product N gout Number of no fault found products rew ost of N d1 N d N gout out rework/product Effectve cost of a product extng the test/dagnoss/rework N r Number of products to be reworked f c Fault coverage N rout Number of products actually reworked f p False postves fracton, the probablty of testng a good product as bad N s1 Number of products scrapped by dagnoss f d f r Y n Y beforetest Y rew Fracton of products determned to be reworkable Fracton of products actually reworked Yeld of a product enterng the test/dagnoss/rework Yeld of es that occur enterng the test Yeld of the rework N s2 N out Y aftertest Y out Number of products scrapped durng rework Number of a products extng the test/dagnoss/rework, ncludes good products and test escapes Yeld of es that occur extng the test Effectve yeld of a product extng the test/dagnoss/rework opyrght 2008 by ASME

5 by the testng,.e., Y beforetest = Y aftertest = 1, and that there are no false postves n testng,.e., f p = 0. These yeld assumptons guarantee that Y out wll always be FIELD USE MODEL The feld use model captures the costs of warranty repar and replacement due to product falures assocated wth the part. Equaton (3) gves the feld use cost n year assumng that no product nstance fals more than once durng ts feld lfe. ( N ( 1 f ) + N f + N ) f repar f feld use = (1+ replace f proc d) (3) where N = number of falures under warranty n year. Ths s f = f calculated from 0-6, 6-12 and > 12 month FIT rates for the part, the warranty perod length (an ordnary free replacement warranty s assumed), and the number of parts stes that exst durng the year. fracton of falures requrng replacement (as opposed to repar) of the product. repar = cost of repar per product nstance replace = cost of replacng the product per product nstance = cost of ng the warranty returns n year. proc 3.4 LIFETIME BUYS As dscussed n Secton 2, electronc parts become obsolete quckly and are no longer procurable for manufacturng n as lttle as 18 months from ther ntroducton. When an electronc part n a hgh-volume product becomes obsolete, there are two vable resoluton actons that can be taken: 1) replace the part wth a newer part, or 2) buy enough parts to satsfy your future needs and store them untl they are needed (lfetme buy), [27]. Replacement of the part carres wth t potentally sgnfcant costs assocated wth fndng a new part, approvng the part for use possbly qualfyng the suppler of the part, and product-specfc qualfcaton tests. When the obsolescence events are resolved usng lfetme buys, n order to nclude the costs of lfetme buys, the number of years to obsolescence (YTO) must be determned, L YTO= 1 TPL (4) 6 where, L = lfecode for the part n year 0, L =1 (ntroducton), 2 (growth), 3 (maturty), 4 (declne), 5 (phase out), and 6 (obsolete), [28,29]. ommercally avalable databases provde lfecodes for electronc parts. T PL = total procurement lfespan of a partcular part type n years. When the year of obsolescence occurs, a procurement of all remanng part (plus a buffer quantty, usually ~10% of expected need) happens n that year at that year s part prce. In subsequent years the cost of procurng parts becomes zero, but the cost of nventory for the lfetme buy of parts s ncluded. Note, the type of obsolescence modeled n ths secton assumes that suffcent warnng s receved pror to the obsolescence event to enable a lfetme buy of the part. Ths s not always the case, some obsolescence events occur as unexpected long-term supply chan dsruptons for whch no warnng s provded. 3.5 MODEL INPUTS A part usage profle s provded as an nput to the models. The profle descrbes the number of products usng the part n each year and the total quantty of parts consumed by manufacturng each year. In all cases, nflaton or deflaton n cost nput parameters can be defned (electronc part prces generally decrease as a functon of tme). Fgure 2 shows a summary of nputs to the model that correspond to the example analyss presented n Secton 5. 4 FINITE RESOURE MODEL A fnte resource model has been developed to allow the assessment of the cost mpacts of a part-specfc problem occurrng at a future pont n tme (at a user defned date). The effectve fnte resource lmted cost of resolvng a problem j quarters after the problem s ntroduced at date D s, j N R res + N j RT k= 1 FRM = j + D j/4 ( 1+ d) N R k unres where N = number of problems (products) resolved n quarter j R j (determned from the resoluton rate dctated by the avalable resources) res = cost of resolvng the problem for one product N RT = effectve total number of full resolutons that have to be done = 1+(1-ommonalty)(N c -1) ommonalty = commonalty n resolutons (0 = no commonalty, 1 = all actvtes common) N c = number of products usng the part on the problem date unres = cost of unresolved problems/product/quarter D = problem date (n years measured from 0). The cost n (5) s ncluded untl the problem has been resolved n all products. The model uses the ommonalty to determne the effectve number of full resolutons that have to be done and then performs them as quckly as the fnte resources wll allow, chargng for the resolutons and penaltes for unresolved problems as t goes. The model assumes that the problem resoluton resources are busy 100% of the tme dong somethng,.e., no dle tme s pad for. 5 MODELING RESULTS The followng results are presented n terms of the annual effectve cost per part ste gven n (6) for year, (5) opyrght 2008 by ASME

6 Part-Specfc Inputs: Parameter Value Part name SMT apactor Test ase Exstng part or new part? Exstng Part type Type 1 Approval/Support Level PPL Maturty Level of Part (lfecode) 2 Number of supplers of part 7 How many of the supplers are not PSL but approved? 5 How many of the supplers are not PSL AND not approved? 0 Part-specfc NRE costs 0 Expected obsolescence resoluton LTB Number of I/O 2 Procurement lfespan (years) Item part prce (n base year money) Are order handlng, storage and ncomng nspecton ncluded n the part prce? Yes Handlng, storage and ncomng nspecton (% of part prce) 10.00% Defect rate per part (pre electrcal test) 5 Surface mountng detals Automatc Odd shape? No Part FIT rate n months 0-6 (falures/bllon hours) 0.05 Part FIT rate n months 7-18 (falures/bllon hours) 0.04 Part FIT rate after month 18 (falures/bllon hours) 0.03 heck all that apply: omponent dentfcaton (ncludng parameter revew) Desgn adopton needed Specal relablty/qualfcaton testng New volume and/or prcng negotatons New AD footprnt and symbol needed Part never becomes obsolete New suppler Include fnte resource effects General Inputs: Part prce change profle (change wth tme) Monotonc Part prce change per year -2.00% Part prce change nflecton pont (year) 5 Manuf. (assembly) cost change per year -3.00% Manuf. (test, dagnoss, rework) cost change per year -3.00% Admn. cost change per year 0.00% Effectve after-tax dscount rate (%) 10.00% Base year for money 1 Addtonal materal burden (% of prce) 0.00% LTB storage/nventory cost (per part per year) LTB overbuy sze (buffer) 10% Warranty length (months) 18 Felded product retrement rate (%/year) 5.00% Operatonal hours per year 8760 % of suppler setup cost charged to non-psl, approved supple0.00% Part and Product Usage Profle Inputs: Quantty of Parts onsumed 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 Total volume of parts = 12,910, Year Fgure 2. Example part total cost of ownershp cost model nputs. ( + + ) mant manuf = j= 0 N j feld use where N j s the number of products manufactured n year j. We focus on the effectve cost per part ste, rather than the cost per part because when product repar and part replacement are consdered there s effectvely more than one part consumed per part ste. All computed costs n the model are ndexed to year BASE MODEL As an example of the part total ownershp cost model (wthout the fnte resource constrants ncluded) consder the part data shown n Fgure 2. For ths part used n a sngle product (wth the annual part usage profle shown n Fgure 2), the results shown n Fgure 3 are obtaned. The plots on the left sde of Fgure 3 show that ntally, all the costs for the part are mantenance costs,.e., ntal selecton and approval of the part. Manufacturng and procurement costs approxmately follow the producton schedule shown n Fgure 2. Ths example part becomes obsolete n year 17 and a lfetme buy of 4000 parts s made at that tme ndcated by the small ncrease n procurement and nventory costs n year 17 (a lfetme buy). Year 18 s the last year of manufacturng after whch feld use costs domnate. A senstvty analyss was conducted to observe the effects of nput parameters on the total effectve cost per part (6) ste for the baselne case. In Fgure 4 a varablty of 10% for each nput parameter was ntroduced to study the response of the model results for the base case wth no part problems. SMT (Surface Mount Technology) cost per part, dscount rate, mantenance fee for non-approved parts, and part prce were the prmary parameters contrbutng to changes n total effectve cost per part ste. The cost senstvty due to part usage quantty, year of the supply-chan dsrupton, and the costs assocated wth the supply chan dsrupton are dscussed n Secton PART REUSE MODELING We now consder the use of the example part descrbed n Fgure 2 n multple products (the results n Secton 5.1 are for ts use n a sngle product). For smplcty, we have assumed that all the products have the same producton schedule gven n Fgure 2). If we frst consder the case where no problems (that would be fnte resource lmted) are ntroduced, the results n Fgure 5 are obtaned. As products are added that use the part, the effectve cost per part ste drops. The rght sde of Fgure 5 shows a comparson of the annual cost per part ste for the 1 and 20 product cases. Nearly all of the dfference between the annual costs s mantenance cost (economes of scale are kckng n). Now consder the ntroducton of a dsruptve problem whose soluton could be lmted by fnte resources. In ths case we wll assume that the problem s not an obsolescence problem snce the example part we are consderng s forecasted to become obsolete n year 17 and a lfetme buy at opyrght 2008 by ASME

7 . Annual Total ost (year 1 0 currency). 1,000, ,000 10,000 1, Mantenance Procurement and Inventory Manufacturng Feld Use Total Year Manufacturng ost (less parts) 58% Feld Use ost 0% Mantenance ost 38% Annual ost/part Ste (year 1 0 currency) 1.00E+02 Mantenance Procurement and Inventory 1.00E+01 Manufacturng 1.00E+00 Feld Use Total 1.00E E E E E E E Year Procurment and Inventory ost 4% Procurement cost = $0.015/part Effectve total cost of ownershp = $0.225/part Fgure 3. Base case modelng results (no fnte resource lmted problems ncluded). SMT cost per part Dscount Rate Mantanence Fee (non-approved parts) Prce -10% Input +10% Input ost Impact [Total Eff. ost/part ste] Fgure 4. Tornado hart of cost mpact due to 10% varablty n nput values. that tme s already fgured nto the base model. If a problem s ntroduced n year 5, 4 the costs as a functon of the number of products the part s n are gven n Fgure 6 for a range of soluton ommonalty. For one product, the cost s smlar (slghtly hgher because the year 5 problem has to be resolved) than the results n Fgure 5. If there s no commonalty between products n the solutons to the problem, Fgure 6 ndcates that for ths example, there s a 6 product optmum usage. As the commonalty of problem solutons ncreases, the sze of the optmum product usage ncreases untl 100% commonalty results n approxmately the soluton n Fgure 5. Fgure 7 shows the breakdown of costs wth year 5 problems results for 1 product and 6 products. The fracton of the part cost due to mantenance s much larger when one product uses the part than when 6 products use the part 4 For the analyss results gven here, we have assumed that the cost of the problem resoluton n a sngle product s res = $100,000, that we have resources to perform a maxmum of one full resoluton every 6 months (resoluton rate = 0.5 resolutons/quarter), and the cost of unresolved problems s unres = $50,000/product/quarter. (economy of scale shared qualfcaton and approval costs). However, the problem resoluton cost makes up a sgnfcantly larger porton of the cost of ownershp of the part when 6 products are nvolved the balance between the lower mantenance costs and the part resoluton costs s key to fndng the optmum number of products to share a part. The results seen n Fgure 8 are a varaton of the case shown n Fgure 6 (problem ntroduced at year 5), wheren the cost assocated wth unsolved problems and problem resoluton s reduced by 25%. The results show an optmum breadth of use at 7 products for no commonalty and 15 products for 50% commonalty,.e., the optmum number of products has shfted to the rght (larger number) as the costs assocated wth the problem resoluton decreased. The date of the ntroduced problem and the senstvty of the results to total volume of part usage have been explored. The rght sde of Fgure 6 shows that the optmum number of products to use the part n ncreases as the date of the problem s later (year 10). For the results n Fgures 3-8, the total volume of parts s 12,910,500 parts/product. If ths volume s decreased to 1,290 parts/product, the effectve cost per part ste ncreases substantally (the varous non-recurrng mantenance costs and the cost of problem resoluton at year 5 ncrease t dramatcally), but the optmum number of products to use the part n s the same as the hgh volume case, Fgure 9. Note, n the example case used here (a capactor), the prce varaton due to volume above a few thousand parts s neglgble, but the relatonshp may be mportant n more expensve parts. 6 DISUSSION AND ONLUSIONS The goal of the model developed n ths paper s to enable the assessment of the optmum number of part uses wthn a large sea of products when the part s effectve cost to a product s opyrght 2008 by ASME

8 Effectve Part ost/ste Number of Products Usng Part Annual ost/part Ste (Year 0 1 urrency) product 20 products Years Fgure 5. 1 to 20 products concurrently usng the example part descrbed n Fgure 2. No fnte resource lmted problems. Year 5 Problem Year 10 Problem Effectve Part ost/ste No ommonalty 50% ommonalty 100% ommonalty 6 product optmum 13 product optmum Effectve Part ost/ste No ommonalty 50% ommonalty 100% ommonalty 8 product optmum 16 product optmum Number of Products Usng Part Number of Products Usng Part Fgure 6. 1 to 20 products concurrently usng the example part descrbed n Fgure 2. Problem ntroducted n year 5 (left) and year 10 (rght). 6 products, $0.182/part ste 1 product, $0.231/part ste Problem Resoluton 9% Mantenance ost 14% Feld Use ost 0% Problem Resoluton 3% Feld Use ost 0% Procurment and Inventory ost 5% Mantenance ost 37% Manufacturng ost (less parts) 56% Manufacturng ost (less parts) 72% Procurment and Inventory ost 4% Fgure 7. Year 5 problem cost breakdowns (0 commonalty). hghly dependent on non-procurement, non-manufacturng lfecycle contrbutons and s subject to long-term supply chan dsruptons (.e., dsruptons that make t mpossble for an organzaton to contnue usng the part, such as relablty ssues, changes made to the part by the part manufacturer, and unforeseen obsolescence of the part that make t nonprocurable). The study s based on a part total ownershp cost that ncludes cost models for manufacturng, mantenance, and feld use of parts. Most product platform desgn analyses focus on manufacturng costs, wth less attenton pad to ndrect costs and almost no attenton pad to postmanufacturng lfecycle costs. A few authors have ncluded ndrect costs, such as non-recurrng desgn, setup, and qualfcaton costs, e.g., [30], but because they take a product vew nstead of a part vew, effectve part lfecycle costs are dffcult to assess quanttatvely (e.g., commonalty ndces and other such scales are used rather than actual costs). The product vew also tends to lead to an ncomplete pcture of the effectve lfecycle cost of parts because part-specfc (as opposed to product-specfc) supply chan effects are not easy to nclude. In fact, a recent complaton of ndustry needs and trends, [31], does not specfcally dentfy ether lfecycle costs opyrght 2008 by ASME

9 Effectve Part ost/ste No ommonalty 50% ommonalty 100% ommonalty 7 product optmum 15 product optmum Number of Products Usng Part Fgure 8. 1 to 20 products concurrently usng the example part descrbed n Fgure 2. Problem ntroducted n year 5, ost of problem resoluton ( res ) = $75,000, ost of unresolved problems ( unres ) = $37,500. Effectve Part ost/ste product optmum No ommonalty 50% ommonalty 100% ommonalty 13 product optmum Number of Products Usng Part Fgure 9. 1 to 20 products concurrently usng the example part descrbed n Fgure 2. Problem ntroduced n year 5, total quantty of each product = 1,290. (post-manufacturng costs) or long-term supply chan dsruptons as contrbutors to product famly development decson makng. In ths analyss we have taken a part cost of ownershp vewpont as opposed to a product or product famly optmzaton vewpont, e.g., we are not usng commonalty ndces, rather, the actual total ownershp cost for parts s assessed, whch unlke prevous studes, accounts for avalable resources to address post-manufacturng lfecycle and longterm supply chan dsruptons that are sgnfcant contrbutors to the cost of some types of products, e.g., electronc products. Example results from our model demonstrate that, from a lfecycle cost vewpont, there s an optmum quantty of products that can use the same part beyond whch costs ncrease. The analyss ndcates that the optmum part usage s not volume dependent, but s dependent on the tmng of the supply chan dsruptons. Ths work suggests that the rsk and tmng of supply chan dsruptons should be consdered as a crtera n product platform desgn. 7 AKNOWLEDGEMENTS Ths work was funded n part by the ALE Electronc Products and System onsortum at the Unversty of Maryland. 8 REFERENES [1] M.H. Meyer and A.P. Lehnerd, The Power of Product Platforms: Buldng Value and ost Leadershp, Free Press, New York, NY, [2] S.A. Nelson II, M.B. Parknson, and P.Y. Papalambros, Multcrtera Optmzaton n Product Platform Desgn, Proceedngs of DET Desgn Automaton onference, September 1999, Las Vegas, NV, pp [3] O.L. de Weck, E.S. Suh, and D. hang, Product Famly and Platform Portfolo Optmzaton, Proceedngs of DET Desgn Automaton onference, September 2003, hcago, IL, pp [4] T.W. Smpson, Z. Sddque, and J. Jao, ed., Product Platform and Product Famly Desgn: Methods and Applcatons, Klewer Academc Publshers, New York, [5] M.P. Martnez, A. Messac, and T.W. Smpson, Effectve Product Famly Desgn Usng Physcal Programmng and the Product Platform oncept Exploraton Method, Proceedngs of the ASME Desgn Engneerng Techncal onference, Baltmore, MD, September [6] K. Hölttä-Otto, M. Kokkolaras, T. Maron, S. B. Shooter, T. W. Smpson, and O. De Weck, Platform-Based Desgn and Development: urrent Trends and Needs n Industry, Proceedngs of the ASME InternatonalDesgn Engneerng Techncal onference, Phladelpha, PA, September [7] J. Nanda, H. Thevenot, and T.W. Smpson, Product Famly Respresentaton and Redesgn: Increasng ommonalty usng Formal oncept Analyss, presented at the ASME Internatonal Desgn Engneerng Techncal onference & omputers and Informaton n Engneerng onference, Long Beach, A, USA, Paper No. DET2005/DA-84818, [8] K.N. Otto and J.P. Gonzalez-Zugast, Modular Platform- Based Product Famly Desgn, Proceedng of the ASME Desgn Engneerng Techncal onference & omputer and Informaton n Engneerng onference, Baltmore, MD, September [9] T. Smpson, J. Maer, and F. Mstree, Product Platform Desgn: Method and Applcaton, Research n Engneerng Desgn, Vol. 13, No. 1, pp 2-22, [10] J. Nanda, H.J. Thevenot, and T.W. Smpson, Product Famly Desgn Knowledge Representaton, Integraton, and Reuse, Proceedngs of the IEEE Internatonal onference on Informaton Reuse and Integraton, pp , August [11] G.Q. Huang, X.Y. Zhang, and L. Lang, Towards Integrated Optmal onfguraton of Platform Products, Manufacturng Processes, and Supply hans, Journal of Operatons Management, Vol. 23, pp , [12] J..P. Su, Y. hang, and M. Ferguson, Evaluaton of Postponement Structures to Accommodate Mass ustomzaton, Journal of Operatons Management, Vol. 23, pp , opyrght 2008 by ASME

10 [13] Parts Selecton and Management, ed. M.G. Pecht, Wley- Interscence, Hoboken, NJ, [14] M. Baca, The State of the Semconductor Industry (DMSMS Trendng), Proc. DMSMS onference, Nov [15] K. Feldman and P. Sandborn, "Integratng Technology Obsolescence onsderatons nto Product Desgn Plannng," Proceedngs of the ASME 2007 Internatonal Desgn Engneerng onferences & omputers and Informaton n Engneerng onference, Las Vegas, NV, Sept [16] QTE, 2006, [17] W.J. Fabrycky and B.S. Blanchard, Lfe-ycle ost and Economc Analyss, Prentce Hall, Upper Saddle Rver, NJ, [18] Y. Asedu and P. Gu, Product Lfe ycle ost Analyss: State of the Art Revew, Internatonal Journal of Producton Research, Vol. 36, No. 4, pp , [19] M. Jackson, A. Mathur, M. Pecht, and R. Kendall, Part Manufacturer Assessment Process, Qualty and Relablty Engneerng Internatonal, vol. 15, pp , [20] K.N. Km, Optmal burn-n for mnmzng cost and multobjectves, Mcroelectroncs Relablty, Vol. 38, 1998, pp [21] D.J. Alcoe, K.J. Backwell, and R. Ra, Hgh Relablty BGA Package Improvements on Module Total ost of Ownershp, Proceedngs of Int. Electroncs Manufacturng Technology Symposum, pp , [22] A. Kleyner and P. Sandborn, "Mnmzng Lfe ycle ost by Managng Product Dependablty va Valdaton Plan and Warranty Return ost." Internatonal Journal of Producton Economcs, vol. 112, no. 2, pp , Aprl [23] P. Sngh and P. Sandborn, "Obsolescence Drven Desgn Refresh Plannng for Sustanment-Domnated Systems," The Engneerng Economst, vol. 51, no. 2, pp , Aprl- June [24] P.A. Sandborn and. Wlknson, "A Mantenance Plannng and Busness ase Development Model for the Applcaton of Prognostcs and Health Management (PHM) to Electronc Systems," Mcroelectroncs Relablty, Vol. 47, No. 12, pp , December [25] T. Trchy, P. Sandborn, R. Raghavan, and S. Sahasrabudhe, A New Test/Dagnoss/Rework Model for Use n Techncal ost Modelng of Electronc Systems Assembly, Proceedngs of the Internatonal Test onference, pp , November [26] R.P. Prasad, Surface Mount Technology: Prncples and Practce, 2nd Edton, Klewer Academc Publshers, [27] D. Feng, P. Sngh, and P. Sandborn, "Optmzng Lfetme Buys to Mnmze Lfecycle ost," Proceedngs of the 2007 Agng Arcraft onference, Palm Sprngs, A, Aprl [28] Product Lfe ycle Data Model, Amercan Standard ANSI/EIA-724, September 19, [29] E. Sherwood, Proposal to EIA, Product Lfe ycle (PL) ode Defntons and Applcatons, Motorola, Inc. February 7, [30] M. Martn, and K. Ish, Desgn for Varety: A Methodology for Understandng the osts of Product Prolferaton, Proceedngs of the ASME Desgn Theory and Methodology onference, Irvne, A, August [31] T.W. Smpson, T. Maron, O. de Weck, K. Holtta-Otto, M. Kokkolaras, and S.B. Shooter, Platform-Based Desgn and Development: urrent Trends and Needs n Industry, Proceedngs of DET Desgn Automaton onference, September 2006, Phladelpha, PA. opyrght 2008 by ASME

11 opyrght 2008 by ASME