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Cost Optimization in Electronics

Shorten time, improve quality, and optimize costs of product development

Cost Optimization is a key factor of competitiveness in the Electronics Industry. Manufacturers are increasingly requested to deliver faster, improve quality and, of course, reduce costs. The need to hold these three requirements together results in the fact that it is not possible to simply cut costs. It is necessary to optimize them.

Cost Optimization is made mainly of two components:

  • Cost Optimization in Development
  • Cost Optimization in Production

For any of them, you need to use the best methodologies and tools. Methodologies and tools are strictly connected. The use of a certain methodology implies the use of a certain tool and vice versa.

A third component is Cost Optimization in Procurement. We invite you to read more about Quotations in Electronics Manufacturing, which plays an important role from this point of view.

Cost Optimization in Development

Let’s consider a typical product development process from incubation (where the product development effort is focused) through growth, maturity, decline, and finally end of life.

Taking a typical product lifecycle, the product is launched in the market at the end of the incubation phase, it reaches a breakeven point where the investment in development has been recouped through sales, then eventually sales start to decline and the product is finally retired.

To optimize this process, our goals are to minimize the area under the breakeven point line and maximize the area above it.

Exploring that further, if we can reduce the time taken and costs incurred during product development, we can enter the market sooner, potentially capturing a higher market share. Similarly, if we can extend the life of the product, we can also positively affect the lifetime value.

In the graph below possible improvements are indicated by the green arrows.

cost optimization

How can you get these improvements? It is clear that time is the most influential factor. If you manage to shorten Time to Market, your costs decrease, and your margin increases. Shortening Time to Market in the Development process requires to anticipate as soon as possible any kind of simulation. In this way, you can find and correct issues early, avoiding multiple design iterations and physical prototypes.

We call this methodology "Simulation-Driven Design”. At any stage of the Development process, you can take under control the future performances of your product, by simulating any aspect digitally . We call this methodology Digital Twin. All the solutions proposed by Cadlog and Siemens are based on Simulation-Driven Design and the Digital Twin. They allow you to reach Cost Optimization, because the further you go in the product development process, the fewer cost opportunities you have.

cost reduction opportunities in product development

Cost Optimization in Production

The production of electronics is strongly affected by consumer behaviors. For instance, for the next years, we expect trends like:

  • Customized shopping experience
  • Further increase of online shopping
  • Many new small companies through Additive Manufacturing
  • VR/Digitalization changes shop experience

These new customer behaviors are changing manufacturing paradigms:

“I want it unique”

High mix

Low volume

“I want it perfect”

First time right

First time best
Premium quality

“I want it now”

Fast New Product Introduction

To adopt these paradigms, we propose the most advanced solutions both in the Engineering and Execution stages.

In the Engineering stage, the New Product Introduction process must be able to manage the High Mix Low Volume trend, by digitizing the entire electronics assembly workflow in the operations of the SMT process. Using a single tool for all engineering activities, in a machine-agnostic way, is the perfect solution for this purpose.

In the Execution stage, Cost Optimization requires a mix of different actions:

  • Implementation of the Digital Twin in the real production
  • Orchestration and planning of manufacturing and quality operations
  • Enabling continuous closed-loop improvement through as-planned and as-is data
  • Bridging the gap between enterprise systems and automation
  • Transforming big data into loT actionable information (smart data)
  • Data integration, data analytics, and reporting for operational and Enterprise Intelligence

All of them are allowed by a suite of tools like Opcenter Execution Electronics, which synthesizes all the experience and the ability of Siemens to meet the needs of the contemporary electronics industry.

mes software, pcb assembly

Why to choose Cadlog?

Siemens Ecosystem

The technologies already used by best-in-class organizations and Siemens' Digital Twin-based method made accessible for any small and medium business thanks to a set of scalable solutions.

360-Degree Digitization

You will be part of a large industrial system where many different companies cooperate to provide you with the best solutions for Digitization, whatever the field of application.

Experts in Electronics

We have been working in Electronics for more than 30 years. We have built a portfolio of solutions and own an expertise that allow us to face any aspect related to the design and manufacturing of electronics.

Customer at the Center

Listening to you, deeply understanding your company and requirements. Taking into consideration your budget and the goals you want to achieve. Supporting you daily to grow faster,  together.

Software for Cost Optimization

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