Hybrid Electronics is a medium-sized business located in Bayswater, Melbourne. It is a specialist manufacturer of custom-made thick film hybrid microelectronic circuits (hybrids) that are an alternative to Printed Circuit Boards (PCBs).
Hybrids are made by printing resistors onto ceramic or titanium substrates. They are smaller in size, more rugged and more reliable than PCBs. Hybrids are used in temperature sensors, pressure sensors, flow sensors, baggage x-ray machines, scientific instruments, data loggers and electrical safety devices just to name a few.
Hybrid Electronics material input costs are high because it uses expensive raw materials such as titanium, gold, stainless steel and specialty inks. With a materials spend that is 47% of operating costs Hybrid Electronics realised that resource efficiency was an essential way for the business to improve its overall performance and profitability. By undertaking a materials assessment the business hoped to save 10% by improving its materials efficiency.
In 2013 Sustainability Victoria funded 75% of the cost for materials assessment which looked at Hybrid Electronics' key materials: ceramic substrates and associated components, specialty inks, consumables and plastic.
While the assessment found that the business had a low volume of waste and low waste disposal costs, due to the high value of the raw materials, the purchase price of the waste was found to be 1,920 times the disposal costs (i.e. the purchase to disposal ratio). When related energy, labour, processing and other costs were factored in, the true cost of the disposed waste was calculated to be 3,132 times the disposal cost.
While the identified opportunities for site wide annual material savings through measures such as improved measuring and monitoring of high value inputs, was only expected to be about 2.5%, the assessment identified a number of additional efficiencies in energy, labour practices and waste management amounting to further savings of about 10% per year.
Hybrid Electronics' General Manager, Samantha Bray observed: 'The assessment had immediate and real benefits for our business, because of things that the assessor pointed out to us and helped us to implement while he was undertaking the assessment. We are already seeing significant improvement since the project started.'
Hybrid Electronics has acted on many of the assessment's recommendations, and is already achieving significant annual savings. Some of these actions include:
- a number of process improvements including replacement of tank seals, solder screens and improved calibrations
- the introduction of segregation and collection for recycling of the plastic component reels used on the surface mount machines
- the renegotiation of its waste management service contract which will result in a 28% reduction in site waste management fees
- shift rosters have been changed from five 8-hour shifts to four 10-hour shifts, resulting in increased energy and productivity yields
- the cost of consumables has been reduced by finding alternative suppliers at lower prices e.g. labels for printouts on testing equipment, finger cots and gloves.
'While the savings are more productivity related than material savings because our products are so small, we didn't realise that our lack of focus on material efficiency and first pass rates was leading to additional costs and that we could take steps to improve both material and productivity losses at the same time,' said General Manager, Samantha Bray.
Hybrid Electronics is working with its customers to investigate other opportunities to improve materials efficiency including asking customers for order forecast to see if larger print job batching can occur to avoid the inefficiency of small printing runs. Discussions with one customer regarding product changes or redesigns after analysis showed that two products contributed most to the total cost of non-conformance.
The assessor has shown us how to measure the "hidden" waste in our processes and which we are now putting into practice and monitoring. This will really help our business, especially now as volumes are increasing and we have some new customers coming on line.
Samantha Bray – General Manager, Hybrid Electronics
Assessment conducted by Ian Young (Manufacturing Best Practice Program).