Quantifying Component Substitution Costs in Power Converters
Component substitution savings are net negative unless production volumes amortize engineering re-spins and agency recertification expenses.
Printed Circuit Board Re-Spin
Meaning
Redesigning and manufacturing a new iteration of an electronic circuit board becomes necessary when errors or performance issues are discovered during testing. A printed circuit board re-spin involves modifying the routing, component placement or layer stackup to correct design flaws before mass production begins. This process adds substantial time and expense to the overall product development cycle.
Financial Consequences
Prototype runs and testing cycles must be repeated for each new revision of the board. The expenses of a printed circuit board re-spin include new tooling, stencil fabrication and assembly setup fees. These costs directly reduce the initial profit margin of the electronic product.
Market Window
Delays in releasing a product to market can cause a company to miss seasonal sales windows or lose market share to competitors. Many distribution contracts include firm launch dates, and failing to deliver the product on time due to a printed circuit board re-spin can result in financial penalties or the cancellation of the agreement. Retailers may reduce their initial order volumes or demand price concessions to offset their own lost marketing expenses.
In extreme cases, a lengthy redesign process can render a product obsolete before it even reaches the shelves.
Contractual Obligation
Supply agreements between design houses and manufacturing partners often define who bears the cost of design revisions. If the re-spin is caused by a manufacturer’s assembly error, they must cover the fees. When the issue stems from a design mistake, the developer takes the financial responsibility.