Throughput Analysis:
How Static Impacts the Bottom Line, Part II
Detecting a static-control
problem can be only half the battle; you still have to define the problem
and sell its solution to management.
Stephen Halperin
President, Stephen Halperin & Associates
Elmhurst, Illinois
Editor's note: This month, Steve Halperin tells
us how to determine a static problem's magnitude and location, and even
how to present findings to management with a maximum likelihood that
your presentation will result in support for static control.
The raw data obtained in the initial phases of throughput
analysis is summarized in the device Utilization Data spreadsheets.
This collection of information forms the foundation for any detailed
analysis of static problems. Further processing of this data is now
required before it can be put to effective use.
The analytical portion of our plant study is based on data sorts of
all items listed in Table 3. The first sort is based on the material
value of the suspected ESD-sensitive device losses and is shown in Table
4.
This is an optional step since the true value of any ESD loss includes
burden costs. As an indicator, it's better suited to showing that a
problem exists than determining how to attack it. Still, while a single
data sort based on material costs isn't recommended as a sole criteria
for decision making, it provides an important view of estimated static
impact. Some organizations use material costs as an initial indicator
when these costs are high compared to related burden costs.
| Table 3 |
|
DEVICE DEVIATION WITH BURDEN-LOSS
ESTIMATE
|
|
Item
#
|
ESDS*
(V)
|
Deviation
|
Estimated Lost Burden
|
|
Units
Each
|
Cost x
Units
|
@$14.50
Each
|
Material &
Burden
|
|
1
|
60
|
-2,500
|
($26,500)
|
($36,250)
|
($62,750)
|
|
2
|
500
|
-2,800
|
($10,640)
|
($40,600)
|
($51,240)
|
|
3
|
2,000
|
-1,400
|
($3,150)
|
($20,300)
|
($23,450)
|
|
4
|
5,000
|
-1,000
|
($700)
|
($14,500)
|
($15,200)
|
|
5
|
2,500
|
-300
|
($330)
|
($4,350)
|
($4,680)
|
|
6
|
200
|
-2,400
|
($2,160)
|
($34,800)
|
($36,960)
|
|
7
|
1,100
|
-1,900
|
($2,660)
|
($27,550)
|
($30,210)
|
|
8
|
1,500
|
-2,200
|
($1,760)
|
($31,900)
|
($33,660)
|
|
9
|
4,200
|
-400
|
($160)
|
($5,800)
|
($5,960)
|
|
10
|
6,000
|
-100
|
($180)
|
($1,450)
|
($1,630)
|
|
Totals:
|
|
-15,000
|
($48,240)
|
($217,500)
|
($265,740)
|
|
*ESDS: ESD-sensitivity
|
Sort the list in Table 3 from highest to lowest item-cost deviation
using column four, "Deviations: Cost X Units," as the primary
sort key. Once sorted, classify the results in an "ABC analysis"
this way:
Class A: Top 10% of listed items
Class B: Next 30% of listed items
Class C: Final 60% of listed items
The result is shown in Table 4.
Generally, the top 10% of the items listed in an ABC analysis--Class-A
losses--accounts for 50 to 80% of dollar losses in ESD-sensitive material.
The next 30%--Class B losses--accounts for some 20 to 40% of deviation-material
costs. The remaining 60% of items usually accounts for less than 10
to 20% of losses. In our example, the analysis by material costs shows
the following percentages.
Class A: top 10% of listed items represents 54.9% of total estimated
material losses. Class B: next 30% of listed items represents 34.1%
of total estimated material losses. Class C: final 60% of listed items
represents 11.0% of total estimated material losses.
A second (and more useful) data sort incorporates both material costs
and the related burden expense. Using the "Total Material &
Burden" cost per item as the primary sorting reference, sort the
entire list from highest to lowest total item cost (burden plus material
costs as shown in Table 5).
Table 5 shows our data sorted in this way and includes percentage calculations
for both the material cost and burden for each item.
| Table 4 |
|
DATA SORT BY DEVIATION COST
|
|
|
Deviations
|
Est. Lost Burden
|
% Material Loss
|
ABC
|
|
Item
#
|
ESDS*
(V)
|
Units
Each
|
Cost x
Units
|
@$14.50
Each
|
Material +
Burden
|
Units
|
Cost
|
Analysis
Segment
|
|
1
|
60
|
-2,500
|
($26,500)
|
($36,250)
|
($62,750)
|
16.7%
|
54.9%
|
Class A
|
|
2
|
500
|
-2,800
|
($10,640)
|
($40,600)
|
($51,240)
|
18.7%
|
22.1%
|
Class B
(31.4%
of loss)
|
|
3
|
2,000
|
-1,400
|
($3,150)
|
($20,300)
|
($23,450)
|
9.3%
|
6.5%
|
|
7
|
1,100
|
-1,900
|
($2,660)
|
($27,550)
|
($30,210)
|
12.7%
|
5.5%
|
|
6
|
200
|
-2,400
|
($2,160)
|
($34,800)
|
($36,960)
|
16.0%
|
4.5%
|
|
|
8
|
1,500
|
-2,200
|
($1,760)
|
($31,900)
|
($33,660)
|
14.7%
|
3.6%
|
|
4
|
5,000
|
-1,000
|
($700)
|
($14,500)
|
($15,200)
|
6.7%
|
1.5%
|
|
5
|
2,500
|
-300
|
($330)
|
($4,350)
|
($4,680)
|
2.0%
|
0.7%
|
|
10
|
6,000
|
-100
|
($180)
|
($1,450)
|
($1,630)
|
0.7%
|
0.4%
|
|
9
|
4,200
|
-400
|
($160)
|
($5,800)
|
($5,960)
|
2.7%
|
0.3%
|
|
Totals:
|
|
-15,000
|
($48,240)
|
($217,500)
|
($265,740)
|
100.0%
|
100.0%
|
| *ESDS: ESD-sensitivity |
The dramatic impact of burden expense is evident when Tables 4 and
5 are compared. If we classify Table 5 using ABC criteria, our loss
distribution now shifts.
Class A: the top 10% of listed items represents 23.6%
of total estimated material & burden losses.
Class B: the next 30% of listed items represents 56.8% of total estimated
material and burden losses.
Class C: the final 60% of listed items represents 30.5% of total estimated
material & burden losses.
The only item in Class A represents the largest single potential loss--$62,750--while
the three Class-B items represent a combined loss of $121,860. These
four items alone account for almost 70% of static's potential impact
on this facility.
We now can gain a concrete idea of static control's potential value
to the facility. We have identified the inventory items that are most
likely to cause static losses, and we also know roughly where the losses
are taking place because we have tracked the items to their requisitioning
departments.
| Table 5 |
|
DATA SORT BY DEVIATION COST
|
|
|
|
Deviations
|
Est. Lost Burden
|
% Material Loss
|
ABC
|
|
Item
#
|
ESDS*
(V)
|
Units
Each
|
Cost x
Units
|
@$14.50
Each
|
Material +
Burden
|
Units
|
Costs
|
Analysis
Segment
|
| 1 |
60 |
-2,500 |
($26,500) |
($36,250) |
($62,750) |
16.7% |
54.9% |
Class A |
| 2 |
500 |
-2,800 |
($10,640) |
($40,600) |
($51,240) |
18.7% |
22.1% |
Class B
(31.4%
of loss) |
| 3 |
2,000 |
-1,400 |
($3,150) |
($20,300) |
($23,450) |
9.3% |
6.5% |
| 7 |
1,100 |
-1,900 |
($2,660) |
($27,550) |
($30,210) |
12.7% |
5.5% |
| 6 |
200 |
-2,400 |
($2,160) |
($34,800) |
($36,960) |
16.0% |
4.5% |
Class C
(11.0%
of loss) |
| 8 |
1,500 |
-2,200 |
($1,760) |
($31,900) |
($33,660) |
14.7% |
3.6% |
| 4 |
5,000 |
-1,000 |
($700) |
($14,500) |
($15,200) |
6.7% |
1.5% |
| 5 |
2,500 |
-300 |
($330) |
($4,350) |
($4,680) |
2.0% |
0.7% |
| 10 |
6,000 |
-100 |
($180) |
($1,450) |
($1,630) |
0.7% |
0.4% |
| 9 |
4,200 |
-400 |
($160) |
($5,800) |
($5,960) |
2.7% |
0.3% |
| Totals: |
|
-15,000 |
($48,240) |
($217,500) |
($265,740) |
100.0% |
100.0% |
|
| *ESDS: ESD-sensitivity |
Reporting to Management
It is always wise to keep management informed, and
in this case, they should have been forewarned of an ongoing analysis
and briefed on its methods. Most companies insist on ongoing project
status reports. The initial analysis findings could form one of these,
to be delivered before beginning the investigation of causes. A useful
report would include the following information:
1. Estimated ESD material loss in dollars
2. Estimated burden loss in dollars
3. Estimated combined burden and material loss.
4. A summary of the Class A, B and C loss estimates, including burden
and material-cost data.
5. Losses as a percent of ESD-senstitive device and assembly purchases.
6. A list of requisitioning departments experiencing the ESDS-sensitive-device
activity and an estimate of the deviation attributable to each.
7. A description of the action to be taken to confirm suspected ESD
losses in terms of general procedures, anticipated time and resources
required.
8. Comments regarding production-volume objectives vs. volume attained,
rework activity and field-service problems that may be reflected in
ABC-analysis data.
9. A request for management support during the ESD casual investigation.
Obviously, almost all of this information is available through manipulating
the device-usage tables. Further information can be obtained by creating
the Purchasing, Inventory, and Deviation Cost Analysis illustrated in
Table 6.
| Table 6 |
|
PURCHASING ANALYSIS
|
|
Item
#
|
Unit
Cost
|
Units
Reqd/
Year
|
Cost
to
Purch
|
Avg
Invent
Each
|
Cost
of
Invent
|
Units
Purch/
Year
|
Value
of Unit Purch
|
Deviations
|
Est % Loss
of Total
ESDS Purch
|
|
Units
Each
|
Cost x
Units
|
|
1
|
$10.60
|
2,000
|
$21,200
|
200
|
$2,120
|
4,700
|
$49,820
|
-2,500
|
($26,500)
|
-20.3%
|
|
2
|
$3.80
|
4,000
|
$15,200
|
400
|
$1,520
|
7,200
|
$27,360
|
-2,800
|
($10,640)
|
-8.2%
|
|
3
|
$2.25
|
6,000
|
$13,500
|
600
|
$1,350
|
8,000
|
$18,000
|
-1,400
|
($3,150)
|
-2.4%
|
|
4
|
$0.70
|
10,000
|
$7,000
|
1,000
|
$700
|
12,000
|
$8,400
|
-1,000
|
($700)
|
-0.5%
|
|
5
|
$1.10
|
1,000
|
$1,100
|
100
|
$110
|
1,400
|
$1,540
|
-300
|
($330)
|
-0.3%
|
|
6
|
$0.90
|
2,000
|
$1,800
|
200
|
$180
|
4,600
|
$4,140
|
-2,400
|
($2,160)
|
-1.7%
|
|
7
|
$1.40
|
4,000
|
$5,600
|
400
|
$560
|
6,300
|
$8,820
|
-1,900
|
($2,660)
|
-2.0%
|
|
8
|
$0.80
|
6,000
|
$4,800
|
600
|
$480
|
8,800
|
$7,040
|
-2,200
|
($1,760)
|
-1.4%
|
|
9
|
$0.40
|
2,000
|
$800
|
200
|
$80
|
2,600
|
$1,040
|
-400
|
($160)
|
-0.1%
|
|
10
|
$1.80
|
2,000
|
$3,600
|
200
|
$360
|
2,300
|
$4,140
|
-100
|
($180)
|
-0.1%
|
|
Totals:
|
|
39,000
|
$74,600
|
3,900
|
$7,460
|
57,900
|
$130,300
|
-15,000
|
($48,240)
|
-37.0%
|
| *Includes percent of estimated
units lost and percent of total dollars lost by item |
The summary of our illustrated data is shown in Table 7 and forms
the basis for the interim management report. The most telling fact displayed
in Table 7 is that 37% of ESD-sensitive items purchased are unaccounted
for, and that of these 1/5 are of a single type of part.
This shows how throughput analysis can help locate trouble spots in
an operation. In this case, a close-up inspection of the usage of items
one should uncover is one of the plant's major sources of deviations.
For presentation to management, the summary of this information should
be objective and concise.
| Table 7 |
|
INTERIM THROUGOUT ANALYSIS REPORT
ESTIMATED ESD-LOSS SUMMARY
|
|
Estimated ESD-sensitive material losses:
|
|
$48,240
|
|
Estimated ESD-sensitive-related burden loss:
|
$217,500
|
|
Estimated Total ESD Impact:
|
$265,740
|
| |
|
ESD Loss Distribution Based on
ESD Unit Deviation by Class
|
EST Material
Costs
|
EST Burden Costs
|
EST Total Costs
|
|
Class A
|
$26,500
|
$36,250
|
$62,750
|
|
Class B
|
$16,450
|
$88,450
|
$104,900
|
|
Class C
|
$5,240
|
$92,800
|
$98,090
|
|
Totals:
|
$48,240
|
$217,500
|
$265,740
|
|
ESD-Sensitive Device Purchasing Data
|
|
|
Required
Purchases
|
Avg
Invent
|
Actual
Purchases
|
Deviation
|
%
Deviation
|
|
Units (ea):
|
39,000
|
3,900
|
57,900
|
-15,000
|
-25.9%
|
|
Cost ($):
|
$74,600
|
$7,400
|
$130,300
|
($48,300)
|
-37.1%
|
|
Notes:
1) Burden calculated as $14.50
per unit
2) Areas requesting ESD-sensitive
devices and assemblies are:
|
|
Area
|
EST % of
Deviation Use
|
|
Manufacturing
Rework Area
Field Service
|
10.0%
70.0%
20.0%
|
Confirming Losses
Class A and B items represent the smallest item quantities
used and yet have the highest potential financial and quality impact
on the company.
Therefore, the actual handling of these devices, in addition to inventory
factors, packaging and other logistical elements should now be reviewed
in detail to confirm the cause of the deviations.
The interim-throughput-analysis report and device-usage spreadsheets
point to several interesting areas, aiding the ESD professional in deducing
causes and planning corrective action. These examples show a few thing
to look for.
Sixty percent of the devices listed in Table 7 have ESD sensitivities
of < 2,000 V. Sixty three percent of estimated ESD losses
are associated with four items having sensitivities < 1,500
V. Given the foregoing, the company's maximum allowed environmental
ESD voltage should probably be reduced significantly.
The rework operation is using 70% of all the ESD-sensitive deviation
items. Thus the area of major concern for loss analysis is in or ahead
of the rework operation (i.e., in manufacturing or the supply chain).
Approximately 20% of deviation utilization is in field-service. This
might support one or more of the following deductions: 1) the product
is unsafe for use in customers' ESD environment; 2) latent defects are
being engineered during production and testing; and 3) finished-goods
packaging doesn't protect the product during shipment or storage.
Obviously a facilities evaluation for static-charge generation is a
wise idea. There are several documents, methods and services available
to define the cause of static loss (Ref 1).
Communication with
Management: The Bottom Line
Management wants the maximum ROI possible at an equal
level of quality. Consequently, it is not enough to estimate ESD losses.
One must be able to project a reasonable return for the time and money
spent solving ESD problems in order to gain management support.
Without knowing the cause of a given problem, nobody can estimate the
cost of solving it. However, this writer has never seen static control
generate less than a five-fold ROI in one year. In most cases, proper
static control yields a much higher ROI, but 5:1 is a minimum. Given
that the problem's cause is accurately defined, relatively inexpensive
solutions almost always exist.
Taking a conservative stance, if we suppose that no more than 80% of
the estimated losses can be eliminated with proper static-control technology,
then this is a reasonable projection:
80% of $265,740 = $212,592.
20% of $212,592 = $42,518.
Using these figures, management can justify at least
$42,000 to deal with this problem, depending on company policy and attitudes
toward quality control. However, astute managers realize that product
quality and efficient production always return more than "even
money."
Reference
1. Halperin, "Facility Evaluation: Isolating Environmental ESD
Problems," EOS/ESD Symposium Proceedings EOS-2, 1980.
|
