Electronic Product Cost Estimation

November 19, 2020 Cadence PCB Solutions

Key Takeaways

  • Integrated PCB design software tools facilitate electronic product cost estimation.

  • Risks can complicate electronic product cost estimation. 

  • Modern circuit and product designs add complexity to electronic product cost estimation.

People gathering for a business meeting

Project managers must look at all the direct and indirect costs associated with a potential project.

The management of any type of technology project requires a fundamental approach. Project management occurs in stages, stage gate reviews, and interactions between project leads and project teams. In addition, project management must include an analysis of costs and benefits. Project managers can use flowcharts or process maps to show inputs, outputs, processes, and key milestones. As they look at all the direct, indirect, financial, and social costs and benefits associated with each milestone, they begin to compare the sum of the costs with the sum of the benefits. From there, project managers can also begin calculating the impact on success or failure of the project as they consider the amount of risk carried by each cost and each benefit.

Electronic Product Cost Estimation Requires a Big Picture View

Project managers working together to estimate cost.

Project managers must look at the big picture when estimating electronic production costs.

When we take a big picture look at a project, all types of costs become apparent. Those costs include electronic and mechanical parts, accessories, and product assembly. The costs for electronic parts cover PCB materials, PCB assembly, components, and any peripherals that provide an interface between electronics and humans. Mechanical parts costs include the materials and processes for constructing casings, brackets, and fasteners.

Product assembly brings everything together. As we use EDA software, we often utilize 3D CAD and depend on the capability of the software to combine electronic design and mechanical design. Moving the product towards assembly may require the sub-processes involved with surface mount technologies, multi-board designs, or rigid-flex PCBs. In addition, product assembly may involve 3D printing, CNC tooling, injection molding, or some other process for completing the assembly of the product. Each option carries different costs.

Progressing from decisions about electronic and mechanical parts to product assembly requires decisions based on the type of use, the operating environment, the desired audience for the product, consumer preferences, and the competition. Risk affects those decisions. Design teams may feel pressure to reduce time-to-market or cut costs and may make wrong decisions about electronic component specifications or mechanical assemblies.

Risks Can Muddy Electronic Product Cost Estimation

Saying that the complexity of electronic design has increased is certainly an understatement. Forty-five years ago, the majority of consumer devices relied on single-sided PCBs with through-hole components. Surface-mount technologies and integrated devices had just begun to gain presence. Today, it is common to find fewer components on multi-layer, multi-board, and rigid-flex designs, which increases the functionality of small-form factor designs. Product designs succeed because of the ability of the electronics industry to compress functionality within system-on-a-chip devices.

With this complexity in mind, breaking electronic product cost estimation down into the simple terms of costs and benefits becomes much more difficult. When considering electronic product costs, consider the cost drivers. The size of the PCB, the number and type of boards required for a product, the number of components, the number of vias, the plating type, copper weight, substrate material, and the trace design all impact cost. Each of those factors influence tooling costs as well. Assembly costs may increase or decrease because of decisions about surface-mount versus through-hole components, the use of arrays, or the need for unique components. Compliance issues, such as IPC and ITAR requirements, may also drive costs. 

With so many influencing factors, cost estimation becomes a matter of analyzing production costs and estimating the costs of components that may appear the same but may have different levels of quality. Some of the different quality levels occur because of sourcing or the manufacturing location, and may introduce additional risk elements into the cost/benefit analysis.

Risk also exists because of assumptions. Design teams can use third-party cost estimation solutions, yet, an assumption exists that those solutions utilize the right information, perform the correct calculations, and offer the precision needed for cost modeling. In some instances, the solutions may not connect designers or engineers to real-time component inventories or prices. Incorrect cost estimation data can introduce project delays that ruin the ability to meet schedule milestones and time-to-market goals.

PCB Design Software Eases the Burden of Electronic Product Cost Estimation

PCB engineers working with PCB design software

PCB design software helps alleviate the risks involved with electronic product cost estimations.

PCB design software mitigates the risks involved with electronic product cost estimation through component libraries that connect design teams with verified vendors, real-time costs, and component inventories. The use of verified vendors eliminates concerns about tolerances or the operating life of components. PCB design software also includes tools that allow design teams to compare component performance through metrics such as total power loss, resistance, and capacitance.

In addition, PCB design software allows teams to confirm that critical components operate correctly with other types of components. Sensitivity and Monte Carlo analysis tools included in the software allow design teams to correctly identify critical components and predict component failure rates. Each of these tools allows design teams to maximize manufacturing yield. The yield rate equals the ratio of usable boards to the number of built boards. In addition to those tools, PCB design software includes simulation tools that cover an in-design cost/benefit analysis.

Along with those tools, PCB design software includes the tools needed to achieve Design for Assembly (DfA) and Design for Manufacturability (DfM). The software produces a Bill-of-Materials, along with other reports, that align the PCB design with the cost estimation given by PCB production firms. While DfM focuses on reducing product assembly costs, DfM emphasizes reducing part production costs.

Although differences exist between DfA and DfM, achieving both can reduce material, overhead, and labor costs while shortening time-to-market. In addition to the impact on costs, both DfA and DfM encourage collaboration across design, engineering, and vendor teams, and seek to minimize part counts, rely on standardized parts, and apply practices that reduce costs when performing a functional analysis. 

For quality PCB design software that assists with electronic product cost estimation, visit the PCB Design and Analysis overview page. Allegro PCB Editor offers cutting edge products that can take your project to the next level.

If you’re looking to learn more about how Cadence has the solution for you, talk to us and our team of experts


About the Author

Cadence PCB solutions is a complete front to back design tool to enable fast and efficient product creation. Cadence enables users accurately shorten design cycles to hand off to manufacturing through modern, IPC-2581 industry standard.

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