How One-to-Many Application Flexibility is Disrupting the Electronics Industry: TTI MarketEye

Can using more of something be innovative?

It is when an entirely new application adopts a commercially-available technology or component. The need to expand applications is due to upfront capital and first-gen development costs being a—if not the most—significant barrier to new technology adoption.

SOURCE: TTI MarketEye’s Adam Kimmel

Given the volume of data around consumer preference and choice, electric vehicles (EVs) are a good case study to support this point. Consumer Reports conducted a recent survey of over 8,000 U.S. adults and confirmed over half (52 percent) viewed the costs of buying, owning and maintaining an EV as a barrier to ownership. These reasons came after commonly-cited hurdles of charging logistics (61 percent) and driving range (55 percent).

However, drilling deeper, respondents cited cost-related items as the top three attributes that would encourage them to buy an EV—less than gas-powered, lower overall lifetime costs vs. gas and lower maintenance. In summary: it is about the money.

The challenge to EV manufacturers is finding creative ways to get the first cost down as soon as possible. A practical approach is to leverage basic economic principles for early-gen products while advanced R&D cycle times address medium- and longer-term costs.

Multi-Application Component Selection Basics

Among these basic cost-down principles are the economy of scale and an approach to forecasting cost declines as a function of cumulative production when technology matures. Theodore Wright, an aeronautical engineer, found that production cost reduces by 10-15 percent for every doubling of per-unit production. Wright’s Law has shown to accurately represent cost-downs as a function of production volume in many industries, from aerospace to EVs and beyond.

Cost reduction is most impactful (and available) early in a product’s lifecycle, so applying commercial off-the-shelf (COTS) components brings the cost down the fastest. Once it reaches a critical threshold, manufacturers achieve volume manufacturing cost and the production takes off. And given the breadth and adoption of electronic components, whose demand is continually pulled by the Internet of Things, this industry is well-suited for multi-application component design.

Enablers

There are some enabling factors to help design engineers, who would logically seek guardrails or a “shopping list” of relevant components they can consider for a new application. Two enablers are product standards and regulatory bodies.

Standards set the rules of play for an application, with size, shape or power guidance (among other unique factors). These parameters accelerate design by reducing some degrees of freedom for designers. While standard-compliant parts can increase the per-piece component cost at volume, the overall economics are likely better by avoiding significant development time and capital cost.

And as standards help govern the components, regulations can frame the product performance or outputs to help control the design can influence.

Where the Value Comes From

With the component type and guardrails set, where will the value come from?

The first layer is capital utilization. Simply increasing/maximizing the asset utilization rate squeezes more juice from the same orange, reducing scrap, downtime and the piece-part cost of all production components from that machine. Cost-effectiveness (production and design both, economies of scale through standardized manufacturing and reduced tooling costs/increased asset utilization).

The next layer is flexibility and adaptability. Starting with existing, mature parts can absorb rapid market demand shifts and future-proof a product by leveraging existing building blocks. These advantages also expedite R&D and time to market by not designing each component from scratch.

Finally, there are operational efficiency gains in supply chain and inventory management. Ordering more of an existing part number simplifies sourcing. It reduces item setup cost (a very under-appreciated headache for operations) and enables flexibility in demand forecast swings by shifting inventory where needed seamlessly.

Component Example – Connectors

Electrical connectors improve production, repair, upgrades and design flexibility by linking device communication pathways. Leveraging the benefits of connectors can couple electronics together. An example of COTS parts is this microTPA connector from Molex.

These devices offer durability and rugged performance to withstand harsh environments. Their design accepts wire sizes from 22-28 AWG and offers wide tooling installation bases to apply to diverse severe applications easily. Wire-to-board and wire-to-wire systems come in 2- to 15-circuits to simplify application extensions.

The connectors are used in automotive applications ranging from steering switches to mirror lights. They can extend to consumer applications like HVAC, household appliances (washing machines and vacuums) and laser printers. The diverse applicability range applies the connectors to B2B and B2C customer bases, leveraging production volumes from both to take advantage of the scale economies.

Challenges and Barriers to Widescale Industry Shift

There are barriers to applying components to new markets. The first challenge is confirming that the part will perform as intended for the new application. This requirement is core to the NPD process but must be considered.

In addition, a piece applied in a new application may change how the user interfaces with the product, looks or performs. All these differences must be aligned with internal stakeholders to ensure no showstoppers crop up before launch. Any change to use a new component should not negatively affect the final product’s fit, form or function.

Takeaways

Given the rapid cost-reduction potential of using COTS components in product development, it is worth the effort of subsystem designers to consider potential market extensions when selecting the part. In addition to the defined primary application, it can be helpful to ask questions like these:

• Could the designers envision a logical application extension?
• What are similar COTS components (to the model being considered) that could extend to the other application(s)?
• What is the impact on the primary product’s economics if the team selects a more robust, multi-application component?

Considering these points when selecting components can deliver quality, cost reduction and speed in new product designs.