Solectron looks to reduce supply waste, build trust with Lean program
by Staff -- Manufacturing Business Technology, 1/1/2006 12:00:00 AM
Solectron, a provider of electronic manufacturing services (EMS) to high-tech OEMs, says a lean/Six Sigma initiative to reduce waste within its global production facilities is especially effective because of its extension to suppliers.
During a Supplier Day at its Milpitas, Calif.-based headquarters last September, top executives from 100-plus suppliers showed up eager to learn more about Solectron's new supplier collaboration program, which uses a so-called "co-prosperity model."
"Typically, a procurement officer sits down with suppliers to debate how much margin they're going to relinquish to get the contract," says Perry Mulligan, chief procurement officer, Solectron. "This program attacks waste so as to improve quality and responsiveness, reduce costs for both parties, and maintain or improve margins."
Solectron started its program of lean/Six Sigma improvement in September 2003, ramping up from zero projects for identifying, isolating, and eliminating waste to more than 5,000 to date. The program is spearheaded by Marc Onetto, Solectron executive VP of worldwide operations and a former protégé of GE's Jack Welch.
Nypro, a Clinton, Mass.-based plastics injection molding supplier, is one participant in the program. "We're of like minds with regard to lean," says Mark Hemphill, Nypro's director of business development. "It started with discussions between the CEOs of both companies, which led to joint kaizen [i.e., continuous improvement] projects."
Hemphill sees the collaborative approach as refreshing. "Usually with supply chain partners, it's 'We need it tomorrow'—which means getting the parts there as quickly as possible. It's not about working with the supplier. But Solectron's approach is, 'Let's fix this together.' As a supplier, it makes you want to be open with them. You have a sense of trust in the relationship."
Mulligan believes lean and Six Sigma to be an essential combination for making this collaboration work. "In the Solectron Production System, we look at lean and Six Sigma as opposite sides of the same coin," says Mulligan. "Lean is a tool to attack any issue that is visible to the naked eye—too much product in one place, a missing component. And anything for which you need statistical data to validate a premise makes it a Six Sigma project.
"When we talk about engaging with our suppliers," Mulligan continues, "it is many small steps."
Over the last year, Solectron has engaged with partners in approximately 80 kaizen projects. "This year we have an obligation to increase that by a factor of 10—to do between 800 and 1,000 projects," Mulligan concludes.
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