Solectron: From Contract Manufacturer to Global Supply Chain Integrator

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Solectron From Contract Manufacturer to Global
Supply Chain Integrator

• M9821803 Selenge
• D9801001 Sean
• D9601302 Ryan

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Outline
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Solectron corporation

• Solectron Corporation was a global
  electronics manufacturing company for
  original equipment manufacturers (OEMs).
  It pioneered the electronics manufacturing
  services (EMS) industry in 1977 and is a
  leader in the field.
• Solectron first customer designed and provides
  integrated solutions that span the entire product
  cycle-from pre-production planning and design, to
  manufacturing, distribution and end-of-life
  product service support-for the worlds leading
  electronics original equipment manufacturers.

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Solectron corporation

• Electronics Manufacturing Services provider
• Founded in 1977
• Headquartered in Milpitas, Calif.
• Sales of 10.4 billion in fiscal 2005
• More than 50 locations worldwide
• More than 50,000 employees
• Spans five continents, in more than 20 countries
• Serving customers in communications, networking,
  computing and storage, consumer products,
  automotive, medical and industrial markets
• Traded on the NYSE, under the symbol SLR
• Two-time winner of the Malcolm Baldrige Award

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Core Business

• Telecommunications /29/ Cellular infrastructure
  equipment, Voice over Internet Protocol (VoIP)
  equipment, IP PBX, wireless and wire line
  Broadband infrastructure, optical networking
  equipment and DSLAMS.
• Networking /27/ Core and edge routers, core and
  edge Ethernet switches, DSL and cable broadband
  equipment, NICs and optical interconnect.
• Computing and Storage /25/ Mainframe computers,
  PCs and notebooks, point-of-sale systems,
  servers, storage systems and workstations.
• Others /19/
• Markets Automotive ABS and airbag control
  modules, car audio and navigation systems, engine
  and ignition control modules, telemetric, HVAC
  units and body electronics.
• Consumer Handheld devices (MP3 players, mobile
  handsets, GPS), video game systems, PDAs,
  personal video recorders and digital set-top
  boxes.
• Industrial Process automation equipment, test
  and measurement instruments, security systems,
  semiconductor fabrication equipment controls and
  handheld instruments.
• Medical X-ray equipment, ultrasound equipment,
  fetal monitors, MRI scanners, blood analyzers and
  surgical robotic systems.
• Field Services - Solectron also holds direct
  contracts with large companies, providing an end
  user defect exchange solution for electronic
  units in the field.
• Aftermarket services - warranty management, parts
  management and logistics, forward and reverse
  logistics, fast repair and return, asset recovery
  and remarketing.

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Solectron Corporation Business Segments
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Solectron corporations Top Customers
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Solectron Financial Data
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Solectron Corporations Business Units
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Global Materials Business Units
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Culture and Development

• Solectron cultural development started in
  1978, when Dr. Winston Chen joined the company
  as president. He used 2 basic principles
  to run the company
• 1. Superior customer service
• 2. Respect for the individual
• 3. Low cost high quality
• We dont tell people, Youre good, or
  Youre bad. We say, Heres what the customers
  say. Thats very powerful tool.
• Dr. Winston Chen

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Company Vision, Mission, Beliefs
Be the best and continuously improve
Vision
Our mission is to prove worldwide responsiveness
to our customers by offering the highest quality,
lowest total cost, customized, integrated design,
supply chain and manufacturing solutions through
long-term partnerships based on integrity and
ethical business practices
Mission

• Customer first
• Respect for the individual quality
• Supplier partnership
• Business Ethics
• Shareholder Value
• Social Responsibility

Beliefs
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The Five Ss
SEIRI

• Organization
• Distinguish between those things that are needed
  and not needed.
• Keep only needed materials at the job site
• Throw away all unneeded items immediately

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The Five Ss cont
SEITON

• Orderliness
• Put things in the right order in the designed
  area
• Store all materials and information in an
  orderly fashion at all times. tidy, ready to use,
  organized according to frequency of use
• A place for everything and everything in its
  place

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The Five Ss cont
SEISO

• Cleanliness
• Problems are more visible when everything is
  neat and clean
• Find minor defects while sweeping clean

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The Five Ss cont
SEIKETSU

• Standardize
• Clean tools, equipment, and job site immediately
  after use
• Equipment that s kept clean runs better

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The Five Ss cont
SHITSUKE

• Discipline
• Use and follow standard procedures
• Follow company rules and regulations
• Follow safety procedures at all times

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The Five Ss
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Supply Chain Solution
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Baldrige Award
Dr. Koichi Nishimura joined company 1988.
His approach was to never be satisfied,
continually question existing practises, and
strive for the continuous improvement
For his contribution to advancing manufacturing
practices, Nishimura has been recognized by the
American Society of Mechanical Engineers and
Solectron was twice awarded the Federal
Government's Malcom Baldrige Award for
manufacturing quality.
Most people think were a manufacturing company.
Were good at manufacturing, but were really a
service company. Koichi Nishimura, Solectron
CEO
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The Malcolm Baldrige National Quality Award is
an annual award that recognizes U.S.
organizations in the business, health care,
education, and nonprofit sectors for performance
excellence. It is administered by the Baldrige
National Quality Program, which is based at and
managed by the National Institute of Standards
and Technology, an agency of the U.S. Department
of Commerce.
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The Benefits customer satisfaction assurance
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Study Questions

• 1. How has Solectrons value to its customers
  evolved over time?

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Solectron Beliefs

• Customer First strengthen customer partnerships
  by providing products and services of the
  greatest value through innovation and excellence
• Respect for the Individual emphasize associate
  dignity, equality and individual growth
• Quality execute with excellence drive to
  six-sigma capability in all key processes exceed
  customer expectations
• Supplier Partnerships emphasize communication,
  training, measurement and recognition
• Business Ethics conduct business with
  uncompromising integrity
• Shareholder Value optimize business results
  through continuous improvement
• Social Responsibility be an asset to the
  community

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Solectrons Day-to-day practice
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Solectrons Customer Complaint Resolution Process
Process in control
Customer complaint
Weekly CSI
Yes
No
Problem
CCRP 24 hours
QIP 72 hours
Yes
Customer acknowledges closure on next CSI
Complaint log-in
Acknowledge within 24hours
Update log
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Customer Loyalty
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Customer satisfaction management at Solectron
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Study Questions

• 2. How has global expansion contributed to
  Solectrons ability to move from a contract
  manufacturing supplier to a supply chain
  integrator?

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Supply Chain Integrator Dimension
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Web Publishing
Supplier
Supplier /Customer info thru the WEB
Sites
WW Matls Date
Report writer
Fast what if

• Core ERP Applications
• Materials
• Manufacturing
• Finance
• Service
• Multisite Integration Model

PDM
Customer
CRM
Connectivity
Other Financial Apps
Shop floor Control
Financial Consolidation
Ware house Mgmt. system
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Solectron Pull Production System
Complain
Complain
customer
Product
Customer Satisfaction Center
Product
Manufacturing
Assembly test
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Information Distortion and Bullwhip Effect
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Synchronized Planning
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Workflow Coordination
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New Business Model

• Solectron introduced a new Business Model
  purchased manufacturing sites from IBM.
• Model was repeated many times, and Solectron
  rapidly grew.
• It acquired manufacturing facilities from
  customers, and used those to fulfill long-term
  supply contracts.
• It allowed for risk pooling, as fluctuating
  demands from different companies were smoothed,
  and safety stock levels of common component
  inventory could be reduced

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Question

• 3? How has the company been able to successfully
  integrate its acquisitions?

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• Assign An Integration Team (4 to 8 members)
• Consists of Finance, Human resources, operations,
  Materials, IT
• Acquisition Business Integration Checklist
• Work with acquired company for 3 to 6 months
• Until the new employees acting as a Solectron
  resource

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Question

• 4?What was the impact of the companys culture
  on the success of the company on the business
  downturn of 2001, and on its ability to respond
  to the business downturn?

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• On the success stage Quality Awards and
  day-to-day practice make Solectron eager to
  expand its scale
• On the downturn Fulfilling its customers
  forecast( proved wrong), impact Solectrons
  inventory and suppliers.
• On the ability to response business downturn
  Solectron has excellent culture on quality
  diligent practice. The downturn may impact
  Solectrons acquisition culture (strategy)
• P.S. Solectron was acquired by Flextronics in
  2007.

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Question

• What additional products and services should
  Solectron provide to its customers in the future?

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• Technology solutions
• Global manufacturing
• Global services

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Global Service
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Question

• What should the company do in the short term?In
  the long term?

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• In the short term
• a restructuring that included workforce
  reductions and facility closures
• In the long term
• The use of outsourcing as an OEM strategy
  continued to accelerate

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Thank You !

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