Analysis and improvement of PCB manufacturing efficiency using discreate-event simulation: An electrical industry use case

Abstract

The production of Printed Circuit Boards (PCBs) manufacturing is a complex process where companies must constantly balance minimizing costs, ensuring the stringent quality standards demanded by modern electronics, and accelerating production timelines to meet market demands. Discrete Event Simulation (DES) allows manufacturers to create dynamic digital models of their production lines, enabling them to visualize material flows, accurately identify operational bottlenecks, and thoroughly evaluate the potential impact of process changes in a virtual setting. This study improvement project focused on enhancing the lead welding process, likely-through robotic automation-to improve speed and consistency. The comprehensive financial analysis revealed that an initial investment outlay of 1.5 million baht, anticipated over a 5-year operational period, is projected to yield substantial financial returns. Specifically, the project is expected to generate a considerable annual net cash flow, after tax, of 1.98 million baht. Employing a standard corporate discount rate of 10% to appropriately reflect the time value of money and investment risk, the evaluation yielded compelling metrics indicative of strong profitability. The project features a remarkably short discounted payback period of only 10 months, signifying swift recovery of the initial capital invested. Furthermore, it generates a strong positive net present value (NPV) of 1.15 million baht, confirming that the present value of anticipated future earnings significantly outweighs the initial and ongoing costs. The investment's attractiveness is further underscored by an exceptionally high internal rate of return (IRR) of 87% and a robust modified internal rate of return (MIRR) of 61%, which provides a more realistic measure of profitability by accounting for the reinvestment rate of cash flows. This significant outperformance strongly confirms the project's substantial economic value, providing compelling justification for management to confidently proceed with the investment as a strategically sound decision poised to enhance operational efficiency and long-term profitability.