Solectron Corp.: IW Best Plants Profile 2005

Sept. 12, 2005
Operating In All Modes: In Columbia, Solectron competes via lean, Six Sigma to the delight -- and sometimes surprise -- of customers.

Solectron Corp., Columbia, S.C.

Employees: 524, non-union

Total square footage: 310,000

Primary products: Systems manufacturing of computing, networking and data storage equipment via a contract manufacturer business model

Start-up: 1998

Achievements: In 2004 Solectron's Columbia plant won key supplier awards from both NCR Corp.'s Teradata Division and Stratus Technologies Inc. In 2003 and 2002, the plant won similar recognition for outstanding performance from Brocade Communications Systems Inc. Applying the principles of lean manufacturing has liberated the equivalent of 29,000 square feet of production floor space.

Imagine a manufacturing plant where the long-term strategy is to constantly strive to competitively leverage the value of production workers; where employees are considered assets deserving of investment; and where worker knowledge of product use is an active means of improving both production and marketing success.

That's the basic operating philosophy at Solectron Corp.'s plant in Columbia, S.C. "It's how we compete," says John Petta, general manager.

IW's 2005 Best Plants

See the other winners of IW's 2005 Best Plants award and find out how they made the top ten.The company's customer value proposition is to focus its global operations of more than 60 plants on contract manufacturing for the electronics industry. To pursue success for customers -- and itself -- the corporate emphasis is on customer collaboration, lean manufacturing and fulfillment and post-manufacturing global services.

In the corporate lineup, the Columbia facility is unique in two ways, explains Petta.

First, in contrast to many of the other Solectron plants -- which tend to concentrate at the printed circuit board level -- Columbia is a level-five integrator of components. That means that fully assembled products leave its production lines and manufacturing cells. (Many of the components arrive from other Solectron plants.)

Second, products from the plant typically are not shipped to Solectron's OEM customers, but to the OEM's customers. The plant's major OEM customers include Brocade Communications Systems, NCR, Cisco Systems, Nortel Networks, Stratus, Teradyne, Lucent Technologies and Eastman Kodak.

The production floor reveals a wide range of products undergoing assembly including such electronic gear as fault tolerant computer systems, enterprise network switches and electro-mechanical robot arms. To meet end-user requirements, the facility's operating mode ranges from build-to-order, configure-to-order, and build-to-stock to demand pull -- all in the same plant!

Ron Bailey cables a system about to be staged for NCR.As a contract manufacturer, Petta notes that customer communication can play a critical role in process optimization. He recalls one incident when an OEM customer came to tour the Columbia plant and discovered that a production space reallocation had reduced the square footage dedicated to that OEM by 50%. Surprised, the customer immediately objected: "But you told me that you had increased the capacity to manufacture my product by 50%."

"What happened," explains Petta, "is that our on-going commitment to process optimization via the principles of lean manufacturing made it possible to suddenly increase the production capacity by 50% while at the same time decreasing the production space requirements by half. Unfortunately the customer executive had not been briefed on our accomplishments prior to his visit."

The changing scope of product diversity is a continuous challenge for the Columbia facility. For each different customer and every distinct product, Columbia faces a new set of manufacturing and distribution/shipping challenges. Within each customer product line, requirements will vary, and the plant manufacturing team has to respond accordingly, explains Petta.

Joanne Taylor installs a motherboard into a computer chassis.To empower its employee strategy, Columbia (and the rest of Solectron) is dedicated to an ongoing journey of Six Sigma and lean manufacturing, says Petta. For example, several times a year it is not unusual to encounter kaizen events on the plant floor mentored by Junichi Nakazawwa, senior consultant of Shingijutsu USA Corp., Portland, Ore. The Japanese parent of Shingijutsu was founded by a close disciple of Taiichi Ohno, the Toyota executive who championed the original version of lean, also known as the Toyota Production System. (James P. Womack, president of the Lean Enterprise Institute and co-author of Lean Thinking (2003, Free Press Div., Simon & Schuster Inc.) describes Ohno as the "most ferocious foe of muda (waste) human history has ever produced.")

The key to Columbia's Six Sigma and lean success is a cadre of staff and production workers with the experience, knowledge and determination characteristic of big time manufacturing consultants, Petta says. "Our business success depends on a skilled production team's ability to deliver quality products via process excellence. Our promise to our customers is to continuously improve process efficiency and product quality when they contract with our plant," he adds. The Solectron policy: "Delight the customer in everything we do."

Petta says staff seniority at Columbia offers a key advantage. For example, manufacturing engineer Donette Kirkland predates Solectron's acquisition of the plant in 1998. "My career at the plant began 12 years ago, in 1993 when the facility was still being operated by NCR Corp." (NCR founded the plant in 1973 and operated it until 1998 when Solectron purchased it.)

Anthony Bookert, employed at the site since 1979, configures a hard disk drive.On the plant floor, high seniority levels also offer an opportunity to enhance customer value. Examples include both Anthony Bookert and Theresa Pedersen at 26 years, Joanne Taylor at 19 years and Sharon Hammond at 24. Average seniority in the plant is more than 10 years.

Petta says Columbia's 524 associates are cross-trained with long experience in Six Sigma and kaizen. He counts on four Six Sigma Black Belts, 25 Six Sigma Green Belts as well as trained, empowered kaizen teams to drive continuous improvement. Petta himself ranks as a Six Sigma Master Black Belt.

The Columbia plant stands out not only in terms of process optimization skills, but also in its ability to adapt to the diverse needs of each customer. Petta says Columbia delivers product yields of up to 96% on a first-pass basis. More importantly, he says, customers are able to receive their shipments by the commit date 98% of the time. Those metrics continue to be improved by the corporate commitment to lean and Six Sigma that was announced in 2003.

Petta says the pursuit of lean manufacturing principles has achieved substantial results. For example, before lean arrived at Columbia, WIP typically was five days. After implementation of lean, WIP has been reduced to a half-day to one day. Lean also has cut employee "touches" as measured by the number of times a unit is picked up or transferred from one station to another. On average, "touches" have been reduced from eight to four, Petta says.

Lead times have been reduced an average of 25% -- though this depends largely on the time required for product testing. Changing that requires collaborating with the customer.

2006 Nominations

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Lean's production efficiencies also have freed up floor space. Petta says Columbia has been successful in reducing production line areas anywhere from 25% to 75%. Production lines have been shortened an average of 50%. Total manufacturing floor space liberated since the introduction of lean is equal to 29,000 square feet, Petta says.

Future competitiveness is the promise beyond the immediate optimization gains via Six Sigma and lean, says Petta. "All of us at Columbia are encouraged by customer reaction to our manufacturing achievements."

His evidence: "Revenue growth at the facility is continuing beyond 11 consecutive calendar quarters."

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