Risks and rewards of outsourcing opto: why the electronics assembly model does not work for fiber management.

In optoelectronics manufacturing there is often some question as to how outsourcing fits, what roles the original design manufacturer and contract manufacturer play, and what supply chain model is appropriate.

Standardization and commoditization in electronics enable manufacturers to drive costs down and enhance the success of the outsourcing model. But in the optics world, everything is custom. No standard exists, processes are more complex and there are not many economies-of-scale. The tried-and-true model for electronics assembly does not fit fiber management because of the lack of volume and repeatable designs.

There is also more risk in finding an outsourcing partner because components and packages can be more costly due to the labor and infrastructure needed to produce them. This is especially true of receiver optical subassemblies (ROSAs), since a photodiode chip rather than a laser chip is the active element. Labor and infrastructure require higher skill levels to assemble and run equipment to perform precision component attach and fiber alignment, especially with single mode fibers. Substantial optical test and measurement equipment must also be part of the manufacturer's infrastructure.

What are the options and what does the manufacturing supply chain look like for optoelectronics? To outsource optoelectronic products, the OEM and out-sourcing partner need to start in the product's development stage and create a manufacturing transition package. Selecting an optoelectronics specialist located close to the OEM saves time and costs. Indeed, because the products are complex, unique products, the OEM cannot just turn the recipe over and say, Go build it! The outsourcing partner needs a team that has optical design, manufacturing and processing skills working together so they can transition that product to low-cost manufacturing.

Because optoelectronic packages are expensive, yield is important. Unfortunately, yield in manufacturing optoelectronic packages is notoriously low. A good place to start, then, is with prototyping because that is where the product begins to take shape. A prototype has to be built while mimicking the factory so it can be transferred easily to manufacturing. This can be done by a prototyping company, NPI center or contract manufacturer.

The key with prototyping is to work with the design engineer. This becomes a circular process, with the sole purpose of debugging the board or package design. The prototyping company also helps select parts and materials, performs test and readies the product for manufacturing. All interactions are between the design and prototyping engineers before the product moves to manufacturing. This can take two or three rounds before the design meets all requirements for stability and manufacturability.

There are several advantages to outsourcing the design-to-product-launch function. Companies, especially those that specialize in optoelectronic prototyping and pilot production, have engineers who do the debug, and it is often less expensive for an OEM to contract that work than to use their own engineers. It also reserves their own manufacturing lines for volume work, rather than pre-volume manufacturing processes.

Prototyping engineers are accustomed to building just three or four lots. They can tweak the process and know how it will work. Purchasing for engineering is different than purchasing for production. Engineering is looking for strips, 1/2 reel, etc. A prototyping shop or NPI center is better equipped to assist the design engineer in obtaining these parts.

Prototype companies should have optical, electrical, process and manufacturing engineers. This enables the design engineers to focus on debugging designs rather than manufacturing issues. In prototyping, engineers tweak the process to figure out why it is or is not working. Compared to design, manufacturing problems are easier to fix. Thus, it is better to work with the design engineer to perfect the product before it goes to manufacturing.

Michael C. Shores is president of TXP, a design and manufacturing firm (texasprototypes.com); [e-mail].

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