The True Cost of Test.

800x300_True cost of Test

One would think that as the complexity of technology grows, the budget for test grows with it. Sadly, that’s rarely the case. It is understandable that products need to remain competitively priced so investing in test is not always the priority. Of course, the irony is that if a product isn’t tested properly, the cost of damage control far exceeds the initial investment.

What to do? What to do?

Know What You Have

Look at your existing equipment (if any) and assess the situation. Does it do the job and deliver the required output? Perhaps some equipment can be upgraded or reused if a new solution is required. On the flip side, are any of the components obsolete? If that is the case today, managing it in 2 years from now will cost a whole lot more.

It’s also important to note what it takes for the current system to run and if it’s running well. If there is a lot of manual labour involved and takes up a lot of time, it may not deliver the required output. It is also possible that bad parts are being missed or good parts are getting rejected. The older a system becomes, the more important it becomes to verify its reliability regularly.

Know What You Need

It’s impossible to go the right way if you don’t know where you’re going. When evaluating (or re-evaluating) your test strategy, it’s important to outline the requirements and the timelines that matter. Define how many Units Under Test (UUTs) need to be tested over the course of a year. If it’s 100 units compared to 100,000; this can’t be looked at the same way. The same applies for the lifetime of a program. Will these stations still be running in 10 years time or replaced long before then? Armed with this information, it becomes simpler to narrow down the test options that will work for your application and meet production deadlines.

Understand ALL the Costs

When assessing any investment, it is important to be clear on the full cost or the Total Cost of Ownership (TCO). The TCO not only considers the purchase price, but also what it costs to use the asset. In the case of test, this needs to be separated into 3 categories: Non-Recurring Engineering (NRE) costs, Recurring costs and Operational costs.

NRE Cost Overview:

This cost will be known in advance and will only show up once. NRE will include all the development time required to design a new test station. This also factors in the time to design the right strategy, get the tools that will be re-used for repeats, training, etc.

Recurring Cost Overview:

This will also be known in advance and will need to be spent on the material, labour & logistics for each station.

Operational Cost Overview:

Lastly, operational costs are the amount to pay once the machine is up and running. This amount is generally affected by the amount of labour required to run the station, the amount of floor space it takes up, power consumption, etc.

By breaking down the TCO it becomes easier to:

  1. Determine where costs can be cut;
  2. Decide what kind of investment needs to be made to get the highest ROI.

Put it All Together and Do the Math

Imagine a manual test station that can test 5,000 UUTs per year and requires a lot of operator assistance. It will certainly have a lower NRE and recurring cost than a fully automated station testing 20 times that amount. It will also cost a lot more to operate and produce a whole lot less. But that may be OK! It all depends on what the output requirements are. Using these numbers as an example:

→ Company Requirement = 100,000 UUTs/year:


→ Company Requirement = 20,000 UUTs/year:


Note: Estimations exclude cost of floor space, power user and operator training.

At the end of the day, what matters most is knowing what you have, what you need and the real cost of what it will take. Some quick tips before reassessing your test process:

  1. It is important to understand the hardware on hand. It may be reusable. Get down in that system and make sure no parts (hardware or software) are obsolete or going down that road. Address it early to avoid bigger problems (costs) later.
  2. Focus on the facts. Outline the numbers to determine what makes the most sense for your company. When you do that, make sure you have included everything. Look behind the couch if you have to. This can be your business case later.
  3. Think ahead. Technology changes fast and flexibility pays off more than any other investment. Design with simplicity in mind so that an initial design can be reused and tweaked to accommodate newer products down the road. (This is also a great tool to cut down on training requirements.)
  4. Keep planning. By staying stagnant in a world that keeps moving, things fall behind. Keep reassessing your setup. It may not be as great tomorrow as it is today. Smart data management tools are the simplest way to keep an eye on how products and factories are performing.

Most importantly, always remember that the initial cost of test is nothing compared to the cost of releasing poor quality.


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