In the electronics manufacturing services environment, product design is “controlled” by 30 or more customers, plus the EMS company, which limits the degree to which Lean manufacturing initiatives can be implemented. In the EMS realm, there is often a need to tailor continuous improvement efforts based on individual customers’ products and objectives. Lean in this environment is more of a toolbox, where different groups of tools are used to support each customer. We’ve discussed many of these tools in our columns over the years. This month we look at how they can best be combined to deliver superior quality and service in a multi-customer environment.
Some disciplines are transparent to the customer and best applied holistically as the foundation for a Lean organization. These include:
• 5S or 5 Pillars philosophy (sorting, set in order, sweeping or shining, standardize and sustain). Setting up a clean factory and keeping it orderly are core concepts that drive efficiency and high quality by making inefficiency very visually obvious.
• Clear design guidelines. While not all customer designs will conform to best practices, every customer should be provided with design guidelines so they are aware of best practices. Guidelines that track closely to industry standards are more likely to be adopted than those that reflect a unique internal recipe.
• Lean practices in supply-chain management. At a holistic level, there should be a clear vision of optimum raw material lot sizes, a standardized forecasting methodology and a supply-chain management strategy that encourages suppliers to support Lean initiatives.
Personnel cross-training. Training personnel in multiple operations so that they can be shifted to various operations as needed helps optimize capacity by providing a fast way to eliminate bottlenecks.
• Continuous improvement training. Training in problem-solving disciplines such as Six Sigma can be done holistically; however, the application of these techniques may be very focused.
• Point of use stocking. Obtaining extra feeders and doing line side stocking to minimize changeover time can be beneficial across the board.
Other disciplines are best used in more focused approaches:
• Standardized equipment platforms. While standardizing on core equipment platforms throughout an organization can create highly efficient factories and reduce capital expenditure requirements, it can be impractical when a diverse mix of customers is present. Focusing on minimizing variation as a holistic goal, while configuring lines and work cells to best meet the needs of each facility’s customer base, can be more practical. Standardization of SMT equipment, rail widths and functional test platforms to the extent practical can increase schedule flexibility and minimize bottlenecks. Standardizing functional test platforms can minimize maintenance costs and reduce both fixturing costs and fixture lead-time.
• Application of Six Sigma techniques. While some companies make the search for kaizen events a mission in itself, in the EMS environment, Six Sigma techniques may be more powerful as a tool for addressing specific customer issues rapidly. For example, when one of our teams applied Six Sigma’s Define, Measure, Analyze, Improve, Control (DMAIC) approach to a quality issue in our facility in Juarez, Mexico, it was determined that the root cause was illumination values that were causing misaligned placement against the pads on certain BGAs and ICs. As a result, the team was able to rapidly correct the problem.
• DfM/DfT recommendations. Development of design guidelines should be done holistically. Specific DfM/DfT recommendations should be made on a customer-by-customer basis. EPIC Technologies uses a 5-point ranking scale to make it easier for customers to understand the level at which noncompliance will impact product quality.
• Lean supply chain management philosophy. The concept of setting material bonds for raw material with the supply base and holding finished goods kanbans for each customer is a good holistic practice, but the reality is that this will also need to be customized and often modified for each customer. Additionally, many customers will have some suppliers on their approved vendor list (AVL) not willing to comply with preferred Lean practices.
• Value Analysis Value Engineering (VAVE). This is perhaps the most powerful technique for applying Lean philosophy on a customer-by-customer basis, because it educates and motivates the customer’s team through a collaborative brain-storming improvement process with defined cost benefits over time.
Taking a customized approach to Lean manufacturing philosophy, and using some tools universally while tailoring others for customers willing to optimize their product design, supply base and product-ordering patterns, provides the best of both worlds. It provides immediate benefits to customers wishing to fully utilize the toolbox, while providing a scalable solution to those who may be willing to integrate Lean principles into their designs over time.
Todd Baggett is EPIC Technologies’ senior vice president, sales and account management; email@example.com.
As discussed in our January 2013 column, Value Analysis Value Engineering is a formal problem-solving process that can help improve productivity and value. While it has benefits as a tactical tool in a Lean manufacturing toolbox, it is even more powerful when used strategically.
VAVE has several benefits from a strategic standpoint. When implemented early in the product development lifecycle, it can become a scheduled part of the product lifecycle roadmap, driving down cost and mitigating obsolescence risk as the product enters each new phase of its lifecycle. A good VAVE strategy creates a series of cost-reduction ladders that unlock value at specific points in time, similar to the way bond ladders spread risk and optimize returns by sequencing redemption at set points in time. Most important, this ensures a proactive focus that minimizes the likelihood or impact of supply-chain interruption.
From a management perspective, it is also a good tool for driving a collaborative process between OEM engineering teams and a contractor’s engineering teams. One of the biggest fears engineering teams have about outsourcing is the potential loss of control or product knowledge as the contractor takes over responsibilities. VAVE opens the door to greater communications between the OEM’s product design and manufacturing engineering teams and the contractor’s engineering and manufacturing teams. This ensures that critical data about the product’s manufacturability and testability issues resident at the contractor are fed back to the engineering team at the OEM and can be used to not only improve the current product, but also enhance future product generations. Similarly, the contractor’s materials expertise may drive improvements in component selection in future products.
Finally, from a marketing standpoint, it provides OEM product managers with a greater range of options in terms of extending the life of mature products that still have viable markets, particularly when a full redesign may not be cost-effective. As an example, a manufacturer of a long-lifecycle product with a large installed user base was facing increased competition from companies offering a lower price. The current market was saturated, making a full redesign or new generation of products unfeasible. Yet, failing to address the cost competition would cause erosion in the existing business base.
A VAVE workshop at EPIC Technologies yielded over $225,000 in savings for one 20-year-old design. The list of proposed changes generated through the workshop included:
Each option was costed so that the customer could evaluate cost savings against tradeoffs. Following a feasibility workshop, the customer provided feasibility assessment of the ideas presented, and an evaluation plan was jointly developed. The Idea Report tracking worksheet was used to track the recommendation, approved plan and cost savings.
The VAVE session drove a brainstorming effort that looked across multiple disciplines for possible cost-reduction opportunities. Instead of cutting profit margins to compete on price, the customer was able to cut manufacturing cost. Plus, existing product life was extended and market position preserved.
A robust VAVE process goes far beyond the benefits of optimizing component sourcing, manufacturability or testability. When implemented as it is done at EPIC Technologies, it drives a much closer relationship among program stakeholders and changes the contractor’s position from that of supplier to that of an equal member of the product team. The result is better product competitiveness, which can lead to increased market share with concomitant benefits for both OEM and contractor. Done strategically, this process ensures a proactive approach to unlocking value at specific points over the product’s lifecycle. It also reduces the potential for production interruptions related to obsolescence issues or unanticipated supply-chain interruptions.
Steve McEuen is director, commodity management at EPIC Technologies. He can be reached at firstname.lastname@example.org.
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