'We wouldn't be here today if it weren't for the colocation of [manufacturing and research & development].' - Mike Koralewski Title: Vice President - Site Operations, Perrysburg Company: First Solar Inc. Prior Position: Vice President, Global Quality - First Solar Degrees / Honors: Bachelor of Science degree, Case Western Reserve University MBA, Bowling Green State University The IndustryWeek Leader of the Week highlights the manufacturing leaders, executives and stars who are driving growth in today's industry and helping to shape the future of manufacturing.

Manufacturing, R&D Colocation Shines at First Solar's Perrysburg Plant

Jan. 8, 2015
Plant Manager Mike Koralewski leads First Solar's Perrsyburg, Ohio facility on a path to improve production efficiency and the efficiency of its solar modules.

If you’re planning to visit First Solar’s Perrysburg, Ohio manufacturing plant and snoop into its dark corners, forget about it. There are no dark corners. It may be the brightest factory you’ve ever visited.

The clean, efficient manufacturing space was recently upgraded with LED lighting and the result would humble any automobile showroom.

But the bright ideas at First Solar, which manufactures solar modules and builds and operates utility-scale solar power plants, don’t stop with its lighting. The company is on a constant quest to improve both the efficiency of its operations and of the solar modules it produces. Those goals help it maintain a major manufacturing presence in the United States and compete in a highly competitive global market. Last November, First Solar, which is headquartered in Tempe, Ariz., reported third quarter 2014 sales of $889 million and expected to finish the year with sales of $3.6 billion to $3.9 billion and operating income of $300 million to $400 million.

First Solar's Perrysburg, Ohio plant has 500 manufacturing employees who work closely with 200 employees involved in research

First Solar’s drive for efficiency is evident in its product offering. The company manufactures a standard 2-foot by 4-foot thin-film glass solar module. It does not build custom products. But within that constraint, the company is constantly innovating to produce more electricity from its panels.

Three things happen when light strikes a solar panel. The light either is reflected off the glass, passes through it or – and this is the Holy Grail of solar power – is converted to electricity. In 2007, the company’s panels converted about 10% of the light to electricity. Today, modules in Perrysburg’s lead production line average 15.5% conversion efficiency, which represents a 35-watt improvement from just 7 years earlier. The company recently set a world record of 21% efficiency in a test module.

“We expect it will be around 18% in the future,” says Mike Koralewski, vice president – Site Operations, at the facility. “Each one-tenth of a percentage point is about a watt per panel. Every watt drives the cost down and makes it more competitive with conventional energy sources.”

First Solar has its roots in a basement of the University of Toledo physics laboratory. Since 1999, the company has been manufacturing in Perrysburg and expanding its presence there. The site has approximately 1 million square feet under roof, with half of that dedicated to its core manufacturing activities. In addition to manufacturing, the Perrysburg campus is the global hub for its research & development group, as well as supply chain, EHS, quality and reliability and IT functions.

The Perrysburg facility gets about 15% of its electric power from solar, primarily to offset peak demand. The facility has a 750-kilowatt array on the grounds and 2.2 megawatts on its roof.

The company is currently adding 200,000-square-feet of manufacturing capacity at the Perrysburg campus and will hire 125 people to man two new lines that will add 200 megawatts of production capacity.

Co-location Key to Plant Success

Each First Solar plant follows the same basic layout. There are two units in each plant and each unit has two solar module production lines.

“Each line has identical pieces of equipment running side by side. They go across a common conveyor and then come back down two common legs,” Koralewski explained, adding that each module is digitally tracked so that manufacturing engineers can “look at the process parameters, see what varied and apply the learnings from that to leapfrog and continue to improve across all the lines around the globe.”

Asked why the Perrysburg facility has thrived when so many other U.S. factories have been shipped to Asia, Koralewski said a key factor was that production and R&D were co-located at the plant, and so innovations and improvements are quickly introduced into the production process while issues on the line are rapidly brought to the attention of engineers. Some 25% of the shop floor area is devoted to R&D.

“By default, our lines get a leg up over any other location around the globe,” he noted.

Count Koralewski among the believers that U.S. manufacturing benefits when research and manufacturing occur in close proximity. “There is a natural conflict between research and development and core production,” Koralewski said. “To get those two sides day-to-day eating lunch in the cafeteria together, standing side-by-side with a tool adds an invaluable communication and implementation strategy. You don’t get to the speed of introduction of processes without those two being co-located.”

Koralewski said Perrysburg also benefits from a high level of automation, as well as low U.S. energy costs, a stable grid, and “a great workforce that we have grown over the years.”

Another U.S. benefit First Solar has taken advantage of, notes Koralewski, is favorable financing from the embattled Export-Import Bank of America. The bank’s low rates have helped First Solar to compete overseas and approximately 60% of its products are exported.

First Solar’s plant uses four shifts with 12-hour days to operate 24 hours a day, 7 days a week. In a 14-day period, employees work 7 days. The plant shuts down briefly twice a year for maintenance and system upgrades. Koralewski said new employees must have a year of experience in a high-volume manufacturing environment and understand that repetition is a factor in consistently producing solar panels to a high quality level. The plant looks for “common levels of competence” for entry workers, and then seeks to grow their skill sets so that they can take on more sophisticated tasks or assume more responsibility.

Advanced manufacturing increasingly runs on an information backbone and that’s the case at First Solar. The company has an MES that it developed in-house and runs a SAP ERP system. Each solar module gets a unique bar code that is etched into the glass at the beginning of the production process. Bar code readers are located throughout the manufacturing process to monitor production progress and quality. Plant officials says they collect 500,000 pieces of data a day.

All that data and research is just part of the plant’s efforts at continuous improvement.

“Over the past 18 to 24 months, we’ve put in close to $40 million of new equipment and technology in this facility,” said Koralewski.

This investment contributes to the company’s overarching need to put its products on a cost-competive basis with other energy sources. Koralewski noted that the reduction in European feed-in tariffs for solar energy had demonstrated to the industry that government support doesn’t provide a sustainable business framework.

“Many solar companies realized that you can’t rely on those government policies. You have to continue on the manufacturing improvement processes to get your costs in line with the conventional power sources and that is what our goal is,” Koralewski said.

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