Acronyms 31 to 40

Introduction

This is our 4th installment of “50 Acronyms Used in Electronic Contract Manufacturing”.  In this article we’ll look at the meaning of 10 more acronyms.  The start of the series can be found here.

 

31. MOQ = Minimum Order Quantity

The MOQ represents the minimum amount of components or material that a supplier will sell to a customer.

An EMS company has to purchase their materials from suppliers.  These suppliers frequently have minimum order quantities.  An EMS company may in turn quote minimum order quantities for circuit boards that they will manufacture for customers.

To learn more about MOQ, check out this article: https://www.abetterlemonadestand.com/what-is-moq-meaning/

 

32. MRP = Material Requirements Planning

When someone refers to their “MRP system”, they are referring to a large software package that helps employees run a successful manufacturing business.  It does so by helping employees perform these job functions:

  • Entering and tracking of customer orders
  • Budgeting
  • Forecasting
  • Resource planning
  • Inventory management
  • Shipping
  • Receiving
  • and numerous others

Over the years MRP software vendors have increased the functionality of their products, resulting in even more features.  The result has been an evolution in the acronym from “MRP” to “ERP”, where the “E” stands for “Enterprise”.

 

33. NRE = Non-recurring Engineering

The term “NRE” usually goes with the word “cost” as in “NRE cost”.  This cost represents a one-time cost (i.e. a “non-recurring cost”) that an EMS company will charge the customer as a result of starting operations for a customer’s product.  You can think of this as a kind of startup cost.

When an EMS company begins operations for a customer’s product, the EMS company will need to obtain things like tooling in order to manufacture a customer’s design.  For example, the EMS most certainly will have a solder paste machine.  This machine requires a stencil.  Normally these stencils are made by an outside machine shop.  The EMS company will need to purchase this stencil.  The cost of this stencil is usually passed on to the customer in the form of an NRE charge.

 

34. PCB = Printed Circuit Board

A printed circuit board is a thin piece of material that electrical components are soldered onto.

 

35. PCBA = Printed Circuit Board Assembly

A printed circuit board assembly is a printed circuit board that has components (such as ICs, capacitors, resistors, connectors, etc.) assembled onto it.

 

36. PFMEA = Process Failure Mode Effects Analysis

PFMEA is used by EMS companies to see where in their manufacturing process they are susceptible to creating manufacturing defects.  When the analysis is complete, they will put measures in place to mitigate the risk of creating defects.

 

37. P/N (or PN) = Part number

An EMS company will have all kinds of documents – such as bill of materials and purchase orders – that will contain part numbers.  It is common for the various part numbers in these documents to be listed in a tabular format with the column heading being “P/N” or “PN”.

 

38. PO = Purchase Order

A purchase order is a document sent by the purchasing company to a supplier that is a request for parts.  The document shows the part numbers (and their prices) as well as the expected delivery date for the parts.

 

39. PPAP = Production Part Approval Process

Customers from the automotive industry typically require their EMS company to have their production process approved before mass production can take place.  This approval process is very detailed, all aspects of the manufacturing process is analyzed because a problem with some seemingly insignificant process could have severe detrimental affects on a finished product – such as a car.

Once PPAP approval is granted, even the slightest change in the process requires customer approval first.

 

40. PPM = Parts Per Million

A good EMS company will keep track of their quality defects in terms of PPM.  When a company has poor quality, it is easier to refer to their defect rates in terms of percentages.  For example, a company with a defect rate of 1% would have 10,000 defects out of 1,000,000 parts.  10,000 out of 1,000,000 equals 10,000 PPM.  So, in this case, it is much easier to refer to this company as having a defect rate of 1% than 10,000PPM.

Conversely, it is much easier to use PPM instead of percentages for companies with good quality.  For example, a company with a defect rate of 4 PPM, in terms of percentages, would have a defect rate of 4 / 1,000,000 = 0.0004%.