Posted to News on 12th May 2016, 17:52
Benefits of tape-and-reel delivery of non-electronic components
Tape-and-reel packing of surface-mount electronic components is now well established and widely used by circuit board assemblers and electronic device manufacturers. The technique is now also becoming rapidly taken-up by mechanical assemblers and manufacturers of electro-mechanical devices to help automate assembly. But have you ever stopped to remember what life used to be like in the days before this simple idea hit the factory floor? It is actually a really important question as we look towards the EU referendum, because the best way to summarise the answer is 'We moved production to Asia to save money.'
Back in the 1980s, not long after the last EU referendum, electronic products were complicated and labour-intensive to assemble, and therefore expensive. The price of labour throughout Europe was rising rapidly and, in the search for cost savings, someone realised that Asia had a large and untapped reserve of cheap labour. Japanese companies were making huge strides to simplify the design of electronic products (making them more reliable and just 'better'), but European brands simply had to do something to keep pace.
The answer then was to follow the service industry example (which had already started moving software development and customer service to India) and 'make in Asia.' Taiwan and Hong Kong were the first destination for many manufacturers, who manufactured there and shipped finished products back to Europe. Once China started to open its doors to international trade during the 1990s, 'offshoring' was all the rage.
Now, however, 30 or so years later, things are swinging back. China is now the second biggest economy in the world, with a huge demand of its own for products, and labour prices across Asia (though still lower than Europe) are rising rapidly. The financial savings of labour on the other side of the world are rapidly eroding. Added to that, the placing of more and more function onto integrated chips has increased product capability and reduced (relatively) the number of components on each board. So how to make savings now?
The answer now is increased automation, which has actually been quietly going on in parallel to offshoring since the mid-1980s.
Automation of surface-mounted component assemblies levels the playing field. Essentially, everyone can use the same automation technologies wherever they are in the world. But that also means they pay roughly the same price to use those technologies, which, in turn, means that as labour is now a smaller part of the overall assembly cost, so it plays a smaller part in the equation of where and how to make things.
Mass customisation
Another trend that has grown more recently is mass customisation and, again, this has a big influence on where manufacturers make their products. Essentially, mass customisation is all about making products more responsive to the market. That can take many forms; from creating an 'own label' version for a big retailer to making 'limited editions' to celebrate a significant event, or short runs of highly specialised but high-value or mission-critical equipment. These can, of course, be made anywhere, but making them nearer means a more effective design and specification process, simplified import procedures, shorter lead times and significantly reduced transport costs.
Even here, tape-and-reel creates another twist in the geo-economics of electronic products. Manufacturers are now using the technique to package small sub-assemblies that are common to many finished products, particularly where fitting mechanical components involves some level of manual assembly. These can then be packed in tapes and shipped to Europe for automated assembly in short-run and customised products, taking advantage of both relatively cheap labour and automation in the same process.
Tape-and-reel component packaging, first patented in the mid-1980s, has been a key part of the infrastructure needed to make all this possible. By ensuring the safe, predictable delivery of components to the automated point of assembly, tapes have increased product quality and production-line throughput. And they have changed the cost model upon which Europe is taking back control of its own manufacturing and allowing businesses in Germany, the UK and in all the other nations of the EU to once again make high-quality, innovative electronic products in our own continent.
As labour costs and transport prices around the world continue to climb, tape-and-reel packing systems are playing their part towards recreating the manufacturing optimism that existed throughout Europe after the last EU referendum. Does that mean they will influence the outcome of this referendum? Probably not. But in or out of the EU, Britain's electronics industry (and that of Germany or any other EU country) would not be able to compete on the world stage without tape-and-reel. For further information please visit www.adaptsys.com.
