NREs, or Non-Recurring Engineering fees, refer to one-time charges to design, develop, and produce a new product. NREs can vary widely from company to company, but typical fees in the electronics manufacturing industry can be roughly divided into three categories; tooling fees, programming fees, and documentation fees. In most cases, these costs are passed on to the client or built into labor charges, but some contract manufacturers (CMs) may choose to absorb these fees.
Tooling fees apply when custom tools or fixtures must be created for production to run smoothly. The upside is that you own the tool once you pay for it (much like the assembly itself). Typically, your CM will store it in their facility, unless requested, for future use. Examples of tools or fixtures include:
Overall, tooling is specific to the PCB used in an assembly. If two or more assemblies use identical PCBs, then the same tooling may be used. Similarly, tooling can be used across revisions to an assembly, so long as the PCB has not changed in any way (e.g., board dimensions, component locations).
If manufacturing in large volumes, you may see tooling NRE fees more frequently due to wear and tear on the tool or fixture. Other tooling fees may include molds, test fixtures, programming fixtures, or cable tooling. If you are unsure of what a tooling fee is referring to, don’t hesitate to ask your manufacturing partner.
While there are many benefits to utilizing automated manufacturing equipment, these machines incur additional charges to program. The upside to automated manufacturing equipment is drastically faster build times, higher quality assemblies, and decreased labor costs.