Automotive electronics manufacturing consists of PCB (Printed Circuit Board) Assembly in SMT (Surface Mount Technology) lines followed by assembly of the PCBA (PCB Assembly) in a housing and finally testing of the finished product. The highest value addition happens in the SMT process.

SMT lines are made up of a series of highly automated machines performing at high speed, complex operations (solder paste printing, component placement, optical inspections etc.). SMT lines call for high capital expenditure (2 to 3 million USD). Hence, they must operate at high levels of efficiency. Since SMT lines typically feed multiple final assembly and test lines, the efficiency of the whole plant is determined by the efficiency of SMT lines. The complexity of the SMT line makes them prone to losses caused by breakdowns, changeovers and micro-stops (intermittent short duration stoppages) that often account for a surprisingly high share of total losses.

An OEE (Overall Equipment Effectiveness) of 80 to 85% is considered good. (OEE of 82.5% is roughly TEEP of 70% based on the 24x6 working pattern). However, achieving 80 to 85% OEE is a formidable task.

The other factors impacting OEE are workforce capability and process quality. Plants need to orchestrate multiple aspects of operations such as production planning and scheduling, material planning and logistics, maintenance, process engineering, stability and motivation of human resources etc. Trained workers moving between jobs create severe inefficiencies. Largely, plants adversely impacted by an unstable workforce and weaker business processes, operate between 60 to 70% OEE. This is especially relevant for manufacturing operations in emerging economies where workforce turnover is a natural consequence of the growing demand for skilled labor coupled with high wage inflation.