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Enter Footer Page 1 Public October 8, 2019 To: Market Surveillance Administrator, Market Participants and Other Interested Parties Re: Request for Information regarding Market Power Mitigation In a letter dated July 25, 2019, the AESO received direction from the Alberta Minister of Energy (the “Minister”) to provide advice regarding market power and market power mitigation by November 29, 2019. Additionally, the AESO was directed to provide analyses and recommendations on whether any changes to the energy-only market are needed, including changes to the price floor/ceiling and shortage pricing, by July 31, 2020. The AESO recognizes that there is a strong linkage between market power mitigation, the price floor/ceiling and shortage pricing, and will consider this connection as it undertakes its work. In providing its advice to the Minister on this matter, the AESO wishes to ensure that it has considered the perspectives of the Market Surveillance Administrator, market participants and other interested parties (“stakeholders”). The purpose of this request for information is to seek input from stakeholders regarding market power and market power mitigation in the context of Alberta’s energy-only and ancillary services markets. Request for Information The AESO requests that stakeholders provide input to the AESO on the questions set out in the attached Stakeholder Comment Matrix on or before October 29, 2019. Comments should be submitted to [email protected]. The AESO also requests that stakeholders identify a contact person who will be able to respond to questions and provide clarifications or additional information if required. The AESO will consider stakeholder input in developing its advice to the Minister, and plans to include a summary of all input received. In certain cases information shared may be attributed to the party providing it. The AESO will release this summary to stakeholders for information. Please note that the AESO does not intend to publish the input received, nor reply to it. However, the AESO will consult with stakeholders on any changes it determines may be required to the energy only market in advance of implementing such changes. Privacy The AESO is a public body subject to the provisions of the Freedom of Information and Protection of Privacy Act (“FOIP Act”). Access to information rights granted under the FOIP Act are subject to mandatory exceptions to disclosure that prohibit access to certain third party information supplied explicitly or implicitly in confidence, when disclosure could reasonably be expected to, among other things, significantly harm the business interests of a third party or when disclosure would unreasonably invade an individual’s privacy (FOIP Act, Sections 16 and 17 respectively). If third party information is requested under the FOIP Act, the AESO is required to notify each affected party and request representations regarding disclosure.
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Page 1: East West Capabilities | Engineering Support Results in Customer … West Engineering... · 2017-10-05 · Invest in advanced precision equipment. 2. Develop additional test and control

East West Capabilities | Engineering Support Results in Customer

Savings

FREE GUIDE

Page 2: East West Capabilities | Engineering Support Results in Customer … West Engineering... · 2017-10-05 · Invest in advanced precision equipment. 2. Develop additional test and control

© East West Manufacturing, LLC

Increasing Tolerances Can Potentially Drive Production Costs DownWhat is Tolerance: The total amount a specific dimension may vary (+/-)

The Challenge: Sometimes tolerances are drawn very tightly, much more tightly than they need to be. The customer sees higher costs because tighter tolerances:

• Limit the manufacturing process the customer can use.

• Limit the materials a customer can use.

• Make it difficult to get the number of in spec parts needed (if a component).

• Make it difficult to get the number of spec products needed.

• Require more intricate tooling.

• Require more expensive materials.

• Often require post-production processes or testing.

Contract manufacturers have no choice but to pass those costs along to the customer. However, East West Manufacturing provides excellent engineering support, which includes close inspection of a customer’s design drawing package. Our engineers have demonstrated the ability to find places in customer’s design where tolerances can be loosened, bringing about significant decreases in production of the part/product.

East West Capabilities: Engineering Support Results in Customer Savings

Below: Engineers review the tolerances specified for a product.

Page 3: East West Capabilities | Engineering Support Results in Customer … West Engineering... · 2017-10-05 · Invest in advanced precision equipment. 2. Develop additional test and control

© East West Manufacturing, LLC

Increasing Tolerances | ElectronicsSituation: Customer sent a PCBA drawing with extremely tight tolerance of +/- 0.05 mm on hole locations.

The Breakdown: To meet the customer’s requirement, we had three options:

1. Invest in advanced precision equipment.

2. Develop additional test and control procedures to ensure the product met spec, since variations in production (especially for plastic injection molded parts) could put the product out of tolerance.

3. Outsource the project to a supplier with existing precision equipment to make the PCBA.

Unfortunately, all the options would result in increased unit cost.

Resolution: We determined that the part would still fit and function properly if the tolerance were increased from 0.05 mm to 0.076 mm, and this is a tolerance we could easily meet with existing equipment and inspection procedures. Our customer agreed to this revision and ultimately saved $0.08 per board.

Below: A factory employee carefully inspects a PCBA.

Page 4: East West Capabilities | Engineering Support Results in Customer … West Engineering... · 2017-10-05 · Invest in advanced precision equipment. 2. Develop additional test and control

© East West Manufacturing, LLC /EastWestManufacturing

Increasing Tolerances | Product DesignSituation: Customer sent a design with surface finish requirements that were extremely high, requiring additional secondary operations, including polishing. As a result of the secondary operation, the customer was struggling with the cost of the component.

The Breakdown:

1. In this case, the customer provided East West with a drawing that had tolerances and specs similar to a product previously made by the company.

2. The original product had a similar use/application, but was in a division that did not have tight cost demands.

3. The part was over-designed, but the original department did not care — as cost was not an issue to them.

Resolution: Based on the product’s application, and by examining competitive products, East West negotiated with the customer on an appropriate level of finishing. Varying levels of surface finish were sampled, and a lower level of surface finish was selected based on actual performance data — saving the company money. Our customer agreed to this revision and ultimately saved 10% on the cost of the product.

Above: A finished metal product is ready for assembly.

If you are looking to tweak production costs look at your part’s tolerances. You can start by asking these questions:

1. How is the part used?

2. Can I justify these tight tolerances?

3. Is the tolerance critical for fit or function?

4. Is the tolerance passed down as part of a legacy or previous generation design?

5. Which manufacturing process is being used?

Is it time for you to make a call to your contract manufacturer?

Tap into the engineering support offered by East West to see if increasing tolerance on your design can put more money back into growing your business.


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