Common EMS Industry Acronyms & Terms

Bone Pile: Excessive quantity of unfinished products accumulated over time awaiting next process step or repair.

Box-build: Assembly of PCBA and mechanical parts such as plastics, metals and cables to make modules or complete end-products. Box-build “Level” 1 to 5 is commonly used to indicate level of complexity where highest complexity is Level 5. Also known as “system-build” / “mechanical build”.

Corrective Action Request (CAR): Request by the OEM or EMS company for the other party to conduct a root cause analysis and help bring the issue to resolution.

Electronics Manufacturing Services (EMS): An industry that offers PCB assembly, box-build assembly, test and other related services. EMS companies are service companies only. All design and other intellectual property (IP) belongs to their OEM customers. Also known as contract electronics manufacturers (CEM).

Engineering Change Order (ECO): An alteration made to an AVL or BOM, such as the replacement of one component by a substitute component. Changes often vary in complexity and urgency. Usually includes description of change, reason for the change, level of urgency (e.g. 1,2 or 3) and the implementation date.

Excess Inventory (a.k.a. Residual, Surplus, Non-productive, Obsolete): Unneeded inventory i.e., not needed to build customer products ordered or forecasted. Definition can vary somewhat by EMS company.

First-pass Yield (FPY): Percentage of product tested that passed on first attempt i.e., excludes product previously tested, failed and repaired. Calculation example - 200 PCBA’s tested at In-circuit test, 20 of these failed, therefore FPY=90% for this production quantity.

High Mix Low Volume (HMLV): Customer program of many active products manufactured in small monthly quantities. For example, program of 400 printed circuit board assemblies which has an average build quantity of 50 per month.

In-circuit Test (ICT): An electrical test of a board performed after component assembly. Process involves placing board on an in-circuit test machine which lowers uses a custom “bed-of-nails” fixture to electrically test for opens, shorts, etc. Failed boards are repaired and then re-tested.

Inventory Churn (“Churn”): Denotes significant mismatch in what is needed vs. what was forecasted in terms of component parts.

Manufacturing and Supply Agreement (MSA): A multi-year contract between the OEM customer and their EMS company supplier. Describes terms and conditions governing OEM purchase orders and overall relationship. Usually includes pricing, inventory liability, performance and service expectations.

New Product Introduction (NPI): A process used by an EMS site to prepare for production of products not previously manufactured at the site. Usually includes a “first-article” process where samples of products are made for OEM customer review and approval for volume production.

Original Equipment Manufacturer (OEM): A company that designs and markets manufactured products (“product company”) e.g., communications equipment, medical equipment. OEM’s are customers of EMS companies. OEM’s may or may not outsource all manufacturing but most outsource custom PCBA work.

Printed Circuit Board (PCB): A rigid, flat board that holds chips and other electronic components. The board is made of layers, typically two to 10 that interconnect components via copper pathways. Also known as a “raw board” or “bare board”.

Pin-through Hole (PTH): Original technology used to solder electrical components on a printed circuit board. Component leads are placed on boards so that their leads pass through holes in the board to the backside and passed over solder bath. PTH technology is being gradually replaced by SMT.

Printed Circuit Board Assembly (PCBA or “board”): Printed circuit board populated with electronic components.

RoHS: Mandates the removal of six hazardous substances from all electronic products shipped into the European Union effect on July 1, 2006.

Surface mount technology (SMT): Liquid solder paste is screen printed on interconnect pads on surface of the board. Components are placed on board so that their leads are on solder paste. Board is then sent through reflow oven where board is heated then cooled so that solder paste liquefies and solidifies.

Tier: Denotes relative size of an EMS company. “Tier-1” EMS companies are clearly the largest in the industry in terms of revenue (approx. 5), “Tier-2” are the next largest group of companies in the industry (approx. 5). There are several hundred smaller EMS companies referred to as Tier-3 or 4 depending upon size and number of manufacturing sites.

Vendor-Managed Inventory (VMI): A process in which a supplier owns components until they are issued or released to the production line. Usually, VMI is handled by a distributor located onsite in dedicated space at the EMS site.