Derating value FMS Reliability

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A short essay on estimating the value of component derating.

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Derating value FMS Reliability

  1. 1. f msreliabilit y.com http://www.fmsreliability.com/education/derating-value/ Derating Value Estimating the Value of Derating This example is based on a real situation. Af ter a class on design f or reliability, a senior manager declared that every component would be f ully derated in every product (electronic test & measurement devices). Within a year the design team redesigned all new and existing products, with strict adherence to the derating guidelines provided in the class. A year af ter the class the product line enjoyed a 50% reduction in warranty claims. They learned about derating and a manager saw the potential value. We of ten do not have a manager with such f oresight, so we need to provide justif ication f or the investment. Here is a case that provides a way to view reliability investments and determine the return. Derating and field failure rate The specialized test and measurement industry creates very complex electronic equipment, expensive tools with total production of maybe 50 per year over a f our year period. And, like other high cost/low volume products the cost of f ailure is very high. Because the unit costs are very high, the ability to test suf f icient numbers of units to f ailure is severely limited. It is not uncommon to have only one or two units f or all qualif ication testing. Furthermore, the complexity of the units provides multiple possible f ailure mechanisms and only rarely does the design provide a clearly dominant f ailure mechanism to f ocus reliability evaluations. Given the barriers to conducting physical testing, the reliability team recommends implementing detailed derating analysis f or the selection of every electronic component. The design team does use some derating concepts, yet only based on a 50% guideline and without detailed analysis. Theref ore, the project manager has requested more inf ormation about the process, costs, and value. Derating and Field Failures Discussion
  2. 2. Derating is the selection of components that have ratings (power, voltage, etc) above the expected stress [1] . Selecting a capacitor that bridges a 5-volt potential that has a voltage rating of 10 volts would be considered a 50% derating. Selecting components that match the expected stress and rating generally lead to premature f ailure of the components. The ratings vendors provide only imply that the component can experience the stress at the rated value f or a very short time. Derating provides a margin to minimize the accumulation of damage or the chance exposure of high enough stress to cause a f ailure. The same concept can be applied f or mechanical designs, using saf ety margins. At Hewlett-Packard, a study of the ef f ects of various design f or reliability tools f ound a very high correlation between well-executed derating programs and low f ield f ailure rates. This contributed to the 50% f ewer f ield f ailures experienced [1]. In one particular division where the design team embarked on a f ull implementation of derating on all products, the project realized a 50% reduction in f ield f ailures in the f irst year, and continued to reduce f ailure rates over subsequent years as more f ully derated product designs shipped. Derating Cost Components that are rated higher cost more and are generally larger in size. Assuming the current bill of material cost is $100k, the implementation of detailed and thorough derating the bill of material costs can rise to $200,000, or double. For a production run of 50 units, the cost increases to $5m. The additional engineering time f or training, circuit analysis, and procurement may add an additional $1m to the project cost. The total cost is an estimated additional $6m to the program. The primary value of component derating is the increase in circuit robustness of the product leads to f ewer f ield f ailures [1]. The cost of a f ield f ailure is expensive, due to the replacement cost, f ailure analysis, and possible redesign and qualif ication costs. Let’s assume that each f ield f ailure has an average cost of $2m, or f our times the sales price. Reducing a 10% annual f ailure rate (a low estimate f or such complex products) to 5% would results in 2.5 f ewer $2m f ailures per year f or an annual savings of $5m. Derating ROI The ROI is the ratio of the expected return over the cost. With a cost of $6 million and return of only $5m, the ROI is less than one at 0.83. If the starting f ailure rate or cost of f ailure is low, then this ROI may not exceed the breakeven point. Also, consider the market and impact on competition. If the high f ailure rate caused a loss of market share, that may f urther increase the cost of f ailure. Still, implementing derating may not make sense in this situation. See also Reliability, HALT and ALT Value articles. 1. Ireson, William Grant, Clyde F Coombs, and Richard Y Moss. Handbook of Reliability Engineering and Management. New York: McGraw Hill, 1995., pg. 16.9. 2. Ireson, William Grant, Clyde F Coombs, and Richard Y Moss. Handbook of Reliability Engineering and Management. New York: McGraw Hill, 1995, pg. 5.4.

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