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'LONG [OT] Re: Manufacturing 2000 boards a month...'
1999\08\30@011408 by Dennis Plunkett

At 00:35 30/08/99 -0400, you wrote:
>> >The game here is to get the machine running 24 hours.
>> This is the bit, in 24 hours a plant will make 20000 units! (Do you think
>> that they would stop a plant for a run of 10% of a days capacity? (Not I))
>I think their point is that the place is MANNED 24 hours a day, so for the
>machines to be idle at all is a waste of money.
>Idle machines with workers sitting nearby doesn't make anyone money.

That would be a suprise indeed. I think that you have you don't have a full
appreciation of the cost of a manufacturing plant or the nominal operation.
Take this as an example a small plant that produced 2000000 line items per
year will set you back around $5000000 (New equipment etc)

Ok now assume that the interset cost is 5% and the depreciation value is
20%, thus the manufacturer would loose 25% of the equipment value per year
(OK so it can be written off in tax but it is still a considerable loss),
thus just to keep the plant value at $5000000, a further $1250000 must be
gained out of proffit (Before abnormals),  (This assumes that the money is
going to be placed back into the plant for upgrade costs), if this is so,
then each item passed through the plant has an inhrrent $0.62 cents just to
cover the plant (This is often why old equipment is used on long term
production runs, it makes money sense!)

The number of people to run it "4" say at $50000 per year (Very highly paid
z rail loaders :)) = $200000 or 5% of the cost of the equipment alone!,
note that also most equipment will page you if it has a problem so the
number of workers is quite small. So it is not having workers doing
nothing, but having machines doing nothing that is important, maned or not!

It can be seen that equipment costs are $6250000 and workers are $200000 or
3.2% of the plant costs. Now to look at this in a time scale, the plant
cost per second per year is $0.198 (Including all capital). For running
costs only ($1250000) = $0.039 per second. So at this point (Using the
latter figures) you can see that the plant cost is $142 per hour!.

Having the plant idle while a new run is loaded (Including programming of
the machines and testing of the run start) takes around 2 hours (Very short
and assumes that the run has been inprogress before). On the 2000 board per
month as the original poster was looking for this will add $284 each time
(A very generous production plant) or $0.14 per board. Now if the plant
makes 5800 per day, then in this day the plant is down for 4 hours to do
this other run. This corresponds to money that the manufacuturer has to

The other poster was correct in that time is money and production plant
proffits are trimmed to the bone, but that is for constant runs of 100000
items or more. Infact you will find that some manufacturers will not look
at you unless you talk runs of 1000000+++
Not for the people cost, but the plant cost


1999\08\30@075706 by kevin

>That would be a suprise indeed. I think that you have you don't have a full
>appreciation of the cost of a manufacturing plant or the nominal operation.

And i think you don't have a full appreciation of the manufacturing costs in
Asia. I think it has to be stressed that there are all sizes and shapes of
manufacturing operations, from the most expensive high-tech operations (with
huge start-up costs) to the most low-tech (consisting of massive amounts of
low cost labour and *a* wave soldering machine).

Million's of dollars in machinery!! USD50K per month for a loader!! not here
in many cases.. I tend to agree with Tony in that idle workers in *some*
cases is the largest cost for many manufacturers.

Last year i visited a factory in China that was busting out thousands of
circuits boards a week with not much more than a wave soldering machine.. i
admit it was decidedly low tech but it worked and the quality was great
(they were even doing some SMD).

Picture this 60 Chinese labourers (each being paid less than USD60 per
MONTH, USD60 is what the experienced girls were getting) sat in a long line
shoulder to shoulder, each has a single tub containing a single type of
component, next to them is a poorly photocopied PCB with a number of
component positions highlighted with a highlighter pen showing where they
should insert the component..

unpopulated PCB's are slid along a track (manually) the labourer inserts
their component and then slides to the next person, by the time the PCB
reaches the end it is fully populated.. it is then hand dipped into a solder
bath passed to the next labourer who trims the leads with an angle grinder
and neatly modified tile cutter blade.

The boards can now be checked for alignment problems, missing components
etc. if everything is OK it goes through the wave soldering machine. Each
board is then manually inspected with any necessary repair work being done.

In less than a morning they completed 500 sets of circuit boards (each set
consisting of 5 boards and average 80 pieces per board). Then swapped over
to another customer order which consists of issuing each labourer with a new
tub of components and a new photocopied page!! Voila manufacturing ala Asia

If you find the right manufacturing partner Asia (or even Mexico i would
imagine) can fulfil manufacturing needs small, medium or large scale. Highly
integrated manufacturers just like their US counterparts are only interested
in volume manufacture, but manufacturers with much lower level of
integration are looking to employ their capacity no matter what volume.

Having your plant sat idle just because you are waiting for that elusive
customer with a production run of over 100000 items makes no business sense.


Kevin Darch. )} )z +[!C Senior Technical Advisor.
Aldare Investments.

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