About SigmaTron

International

SigmaTron International (NASDAQ:SGMA) is a full service EMS provider with a network of manufacturing facilities in the United States, Mexico, China and Vietnam. We focus on companies who want highly customized service plus a scalable global manufacturing footprint. We serve a diversified set of markets which include: aero-space/defense, appliance, consumer electronics, gaming, fitness, industrial electronics, med-ical/life sciences, semiconductor, telecommunications and automo-tive. Our quality certifications include ISO 9001:2015, ISO 13485:2016, IATF 16949:2016 and AS9100D. We are also International Traffic in Arms Regu-lations (ITAR) registered.

Inside this issue:

Equipment Added 2

New Inspection System 3

Volume Second Quarter 2019

New X-Ray System Improves Inventory Counts

One of the key advantages of

SigmaTron International’s busi-

ness model is the ease with

which support infrastructure in

one region can be extended to

other regions on an as needed

basis. For example, one cus-

tomer is currently building a

consumer product in Sig-

maTron’s Suzhou, PRC facility,

but wanted to launch a sepa-

rate product line in Vietnam. A

program manager in Suzhou is

managing both projects and

working with SigmaTron’s purchasing team in

Taiwan for material management. Additional-

ly, she is coordinating efforts with SigmaTron’s

engineering team in Mexico who is supporting

box build line and test fixture setup in order

One challenge facing contract manufacturers

who do high mix, low-to-medium volume pro-

duction runs is accurately tracking partial com-

ponent count. This is because in addition to the

actual demand scheduled to be consumed by

production, there are also parts used in line

setup activities or discarded due to placement

errors in the course of a production run. Pro-

duction status systems are good at tracking

parts used based on the work order, but they

don’t track parts lost to attrition or scrap, ex-

cept as an assumed percentage. While full

reels of components are easy to count, partial

reels are not. A best guess on the quantity of

components in a partial reel could mean that

the next time the reel is used, it gets consumed

before a production run is finished, creating

wasted activity and unplanned downtime.

Flexible Support Infrastructure Enhances Customer Options

The team at SigmaTron’s Elk Grove Village

(EGV), IL facility has found a solution to this

issue. The Sciencescope AXC-800 can count a

reel of parts four times faster than an individual

with a manual hand reel counter. And studies

over the last three months indicate that this sys-

tem’s count is nearly 100 percent accurate. The

system is also easy to learn. An operator can

be taught to count any type of component in

less than 30 minutes.

“An operator just needs to put a reel of parts in

the machine, close the door and push start. The

system uses an algorithm to count up to four

small diameter reels or one large diameter

reel. It can also count trays. In the three months

we’ve used it, we’ve seen questionable counts

(Continued on page 2)

to move the project successfully from Mexico to

Vietnam.

“At SigmaTron, our goal is to place our support

resources in the facilities where we have the

(Continued on page 4)

SigmaTron’s flexible support model can share program management,

purchasing and engineering expertise across multiple production facilities

on an as needed basis.

“any mix, any volume.”

“We are changing our line configuration

to two chip shooters and one

pick & place machine per line.

This is increasing efficiency,”

said Hom-Ming Chang, Vice

President China Operations.

The TRI 7750 SIII 3D AOI deliv-

ers one of the industry’s fastest

multi-angle PCB inspection cou-

pled with blue-laser-based true

3D profile measurement for the

greatest automated optical de-

fect symptoms coverage possi-

ble. It can provide high speed

(Continued on page 3)

Page 2

SigmaTron’s Suzhou Facility Adds SMT Equipment

SigmaTron International’s facility Suzhou,

PRC has added another SMT chip shooter

and an automated optical

inspection (AOI) system.

The chip shooter is a Panason-

ic NPM-W2 which features a

30 percent throughput boost

and improved accuracy over

previous models. The chip

shooter is capable of placing

120x90mm components up to

40mm tall and nearly 6” long

(150mm) connectors. Quick-

change feeder carts, auto

board support setup, and

expanded nozzle capacity,

along with 120 feeder inputs

X-Ray System

go down by 50 percent,” said Anita Tuck-

er, General Manager, EGV.

Another advantage is that there is no need

to take components out of protective pack-

aging. Not only does this eliminate the

need to unseal and often vacuum reseal

packaging, it also preserves the moisture

barrier the packaging is designed to pro-

vide, helping to ensure component integri-

ty.

“At the individual reel level, this may not

seem like much, but when you multiply the

counting effort across our inventory and

look at that benefit in terms of reduced

time, reduced handling, and improved

visibility on component attrition and scrap

trends, it is a very powerful tool. Access to

real-time scrap data tells us immediately if

we have an out of control process,” Anita

(Continued from page 1) added.

Longer term, the accuracy achievable by use

of this system to count parts as they are kitted

and released to the production floor and,

again, when they are returned to stock may

enable simplified physical inventory count.

“I would like to

see our cycle

count inventory

accuracy jump

to a point where

physical inven-

tory could be-

come an annual

audit. This ma-

chine moves us

in the direction

of that inventory

control gold

standard. For

the time being

we are taking the first step of setting up

a system that enables us to know exactly

what we are sending to the production

floor and returning to stock after the

production run,” said Anita.

Operators can be trained to use the system in less than 30 minutes.

and Panasonic’s Intelligent Feeder Anywhere

position the NPM-W2 as an ideal solution for

The SMT line now has a Panasonic NPM-W 2+1 with KY8030 SPI and an

inline TRI 7710 AOI system.

gauge R&R validation tests indicated it is

inspecting with 100 percent accuracy. It

is also about five percent of the cost of

third-party systems which makes it cost

effective to use at multiple points in this

type of production process,” added

Marytherese.

The Chihuahua engineering team supplies

programming and a fixture for each

board type. The EGV team currently uses

it for 100 percent post-wave inspection.

Longer term, they plan to add another

unit in process inspection and one unit in

final assembly. SigmaTron’s corporate IT

department is also studying the feasibil-

ity of adding an integration with its Tan-

go software that would support enforced

routing and more efficient test data col-

lection and production status reporting.

“Longer term, our vision is to continue to

better automate this process thanks to the

ability of our team to reduce the cost of

automation,” said Marytherese.

Page 3

New Vision System Saves Time and Money While there is great debate in the quality

community as to who first made the ob-

servation that visual inspection by humans

is not 100 percent effective, (both W.

Edwards Deming and Dr. Joseph M. Juran

have been given credit), and even some

debate as to whether the effectiveness

rate is 75, 80 or 85 percent, there is no

debate over the fact that it is inefficient

and error-prone. Yet, automated optical

inspection is often deemed not cost effec-

tive for relatively simple processes in

many factories. Such was the case for

odd-form part insertion in SigmaTron

International’s Elk Grove Village (EGV, IL)

facility.

“We found that our inspectors in through-

hole odd-form part insertion were not

catching 100 percent of defects such as

misaligned parts, missing parts or wrong

parts. However, when we looked at com-

mercially available vision systems we

found the pricing was not cost justifiable

given the simplicity of this type of inspec-

New Equipment

color multi-angle inspection of up to

01005 components. It

provides options for

both hybrid 2D and

3D inspection, and

true 3D profile meas-

urement, supporting a

range of inspection

requirements. Its Auto

Library and offline

editing capability

provide a user-

friendly interface that

maximizes production

(Continued from page 2) eral million Bluetooth modules.

“We continue to invest in equipment we

feel helps us a better support our cus-

tomer base. While we do

see a few business shifts

that move work out of the

facility, our focus on effi-

ciency and superior quality

has helped us also take

advantage of business

shifts that move work into

our facility.,” added Hom-

Ming.

Above, the consolidated SMT lines on Suzhou’s newly renovated production floor.

tion process,” said Marytherese Walk, Direc-

tor of Quality at SigmaTron’s EGV facility.

Fortunately, the engineering team at Sig-

maTron’s Chihuahua, Mexico facility has also

been looking at this issue. Through-hole odd-

form parts continue to be used in electronic

product design when a part’s weight or need

for a more robust solder joint makes that level

of interconnection more reliable. Transformers,

connectors and pressure sensors are few ex-

amples of parts that are often still packaged

as through-hole. The Chihuahua facility had

many high volume products that utilized these

odd-form parts and they also saw a need for

an automated vision solution. Their engineer-

ing team developed a system which utilized

an off-the-shelf camera system and mechani-

cal components combined with internally-

developed software and fixturing for each

board type. The system launched successfully

in their facility and is now being deployed to

the EGV facility, as well.

“The new system takes less than half the time

of a human inspector to inspect the part. Our

uptime.

The additions are being driven by the need to

support a customer with requirements for sev-

Copyright © 2019 SigmaTron International, Inc. All Rights Reserved.

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Contact Curtis Campbell, VP Sales, West Coast Operations

Phone: 510-477-5004

Email: curtis.campbell@sigmatronintl.com

Flexible Support

greatest demand for their expertise.

That said, commonality in systems and

processes, plus our ability to see project

status real-time, makes it easy to assign

resources among multiple facilities,”

said Hom-Ming Chang, Vice President

China Operations.

The Suzhou facility is also seeing impact

from changing trade policies.

“We have seen a few business shifts

elsewhere. However, we are also see-

ing increased opportunities for quoting

product to build in China for the do-

mestic market. Uncertainty in trade

policy makes customers building for

export analyze their build site choices

in tariff mitigation. In some cases, that

opens the door to production shift with-

in China,” added Hom-Ming.

For example, an industrial customer

initially looked at moving production to

Mexico to eliminate the China tariffs.

SigmaTron was building their printed

circuit board assemblies (PCBAs) and

they were doing a large portion of the

final assembly at their own factory in

(Continued from page 1) realigned and fewer tooling changes

are necessary,” said Hom-Ming.

Another benefit of the example above

was no negative impact to quality after

project transfer. The supply chain

stayed the same and the assembly pro-

cesses were optimized to reduce touch

labor. Personnel from both facilities

were able to interact easily in develop-

ing the optimized processes.

“Given the temporary nature of many

trade policies it is important to look at

cost drivers very carefully. Shifting

more value-add to a contract manufac-

turer and looking at ways to enhance

productivity may represent the lowest

cost way to mitigate tariffs, particularly

with costs of transferring product out of

a region and the associated learning

curve are considered. However, every

situation is unique and the best supply

chain solution requires careful analysis

of all relevant factors,” said Hom-Ming.

China. As a result, the declared value of

their exported product was fairly high

since it reflected the customer’s internal

cost structure. However, the non-

recurring costs of transferring work to

Mexico were also high, particularly if

the tariffs turned out to be a short-term

policy. SigmaTron worked with customer

to transfer a significant portion of the

value-add done in China to the Suzhou

facility and optimized processes to re-

duce labor. The end result reduced the

declared value of the product which also

reduced the tariff cost.

“The recent discussion of tariffs in Mexi-

co illustrates how quickly trade policies

can shift. The cost to move production

from one region of the world to another

is significant and may take six months to

a year to recoup. Conversely, rethinking

the way production is done in its current

region may drive enough cost reduction

to eliminate or significantly reduce tariff

impact without incurring significant pro-

ject transfer costs. This strategy can of-

ten be implemented much faster than

transferring out of the region because

the supply chain does not need to be