Graduate Thesis Or Dissertation
 

A methodology for the economic evaluation of centralized versus decentralized automated component insertion

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  • Productivity gains in the manufacturing sector have generally been credited to investments in production facilities that supplemented or replaced manual labor. Insertion of circuit boards is a key activity in the electronics industry. Improvements in productivity of circuit board manufacture may be achieved by replacing manual component insertion with automatic machine insertion. However, automatic insertion requires high capital expenditure; the capital must be invested in production alternatives that will result in the largest productivity improvement for every dollar invested. A critical decision regarding capital investment in component insertion is centralized versus decentralized insertion. This study is primarily concerned with the problem of evaluating the economic feasibility of three production alternatives for circuit board manufacture--centralized production, in which all manufacturing operations are performed at one location; decentralized production, in which each business unit has an independent production cell; and satellite production, which uses a mixed production strategy whereby machine insertion is centralized but all other operations involved are decentralized. The approach used in this study is to examine the different cost parameters involved in circuit board manufacture and identify those factors which will differ significantly for the three production alternatives. Procedures are developed to estimate these cost parameters. The dollar values so obtained are then reduced to an annual worth basis for comparison purposes. The methodology developed is then applied to analyze this problem at Tektronix, Incorporated. Based on the cost factors quantified in this study, the analysis showed that centralized circuit board manufacture results in the least capital expenditure, smaller operating and maintenance costs, and higher machine and manpower utilization.
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