1 / 19

Keys to Successful Precision Manufacturing in Asia

Keys to Successful Precision Manufacturing in Asia. Mike Uhl for Mark Whitson PRTM April 5 th , 2005. Contents. Asyst Overview and Background Precision Manufacturing vs. Box Build in Asia Keys to Successful Precision Manufacturing in Asia Next Steps. Isolation/ Interface Systems.

jorn
Download Presentation

Keys to Successful Precision Manufacturing in Asia

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Keys to Successful Precision Manufacturing in Asia Mike Uhl for Mark Whitson PRTM April 5th, 2005

  2. Contents • Asyst Overview and Background • Precision Manufacturing vs. Box Build in Asia • Keys to Successful Precision Manufacturing in Asia • Next Steps

  3. Isolation/Interface Systems Sorters Substrate Handling Robotics ConnectivitySoftware Stockers Materials Management AMHS Overview • Asyst's product lines are diverse and highly configurable

  4. Overview Continued • Asyst is made up of two distinct businesses Focus of Presentation *Est. sales according to First Call consensus**Operating margin excludes amortization of intangibles and restructuring charges

  5. ($millions) Started Transfer 1st products shipped Year 2002 Year 2003 Year 2004 Overview Continued Asyst has a volatile product volume & mix Asyst Semi Sales By Wafer Diameter 200mm 300mm

  6. Asyst outsourcing background • In late 2003, Asyst launched an aggressive effort to improve its supply chain gross margins and flexibility • The entire manufacturing operation was outsourced to Solectron in Singapore • All product lines moved & several thousand parts localized with Asian suppliers • The project was very challenging and many mistakes were made….. • Picked a green field operation vs. an established CM site • Assumed CM was ready to take over entire supply chain management • Localized parts in Asia without validating current part documentation & volume production capabilities of new suppliers • Picked suppliers that did not understand the tight tolerances, demanding cosmetic requirements and volume volatility of our products • Trained manufacturing staff without retention incentives (peak lost 2%/week) Did not follow a structured disciplined approach Just moved equipment & POs

  7. Asyst outsourcing background Continued • ….. We learned from our mistakes and turned it around • Contract Manufacturing Partner • Changed quite a few of the staff @ CM & brought in Solectron experts • Established planning and purchasing guidelines • Set up collaborative planning and execution processes and tools • Retrained manufacturing personnel, certified & cross trained • Set up daily production status reviews • Reviewed ~20 key metrics on a weekly basis Sub-tier Supplier Management • Took over the key commodity management activities & approved vendor list • Set up a 6 step process for transitioning parts to a new supplier • Redistributed parts based upon suppliers capabilities • Transitioned some parts back to the US that did not belong in Asia Organizational Changes • Redesigned the Asyst supply chain organization and hired local staff

  8. Precision manufacturing vs. Box build in Asia • Outsourcing precision manufacturing to Asia is more complex, however if done correctly significant value can be achieved • Precision Manufacturing Outsourcing Additional Complexities • OEM artisan product highly engineering driven vs. CM high volume approach • Products requiring spatial controls&exacting repeatability • Physical equipment requirements in factory such as clean room • Complex ECM management including “Copy Exact” • Large # of custom SKU's -- Many do not fit in CM purchasing footprint: low volumes & highly cosmetic • Highly trained workforce with low turn over Complexity Precision Manufacturing Build Box Build Board Build 1990s 1995 2003 Value/time Level of Value

  9. Keys to precision manufacturing in Asia • There were six keys to successful precision manufacturing in Asia 6. Senior Management Commitment and Focus on Metrics Focus 4. Localized Staff with Clear Roles and Responsibilities 5. Robust IP Protection and ECM Management 3. Cross Company Collaborative Management tools Basics 2. Structured Transition Approach with OEM Ownership Foundation 1. Right Partners & Executive Buy-in

  10. Picking the right partners 1. Right Partners • Following a structured unbiased selection & evaluation approach is critical to launching the outsourcing relationship on the right track Step 4: Step 1: Step 2: Step 3: Step 5: Outsourcing Definition /PartnerIdentification Request forProposal (RFP)Development PartnerEvaluation Partner Selection Planning Key question: Does your product fit within the suppliers capabilities? • CM Selection Criteria • Total cost of doing business • Ease of doing business • Ease of transition implementation • Ability to support future business cycles • Strength of reference • Financial stability • Manufacturing and test engineering capabilities • Materials management and logistics capabilities • Commitment to quality & experience • IT capabilities A detailed unbiased total cost of ownership analysis across the network is also critical to ensuring manufacturing in Asia is the right decision

  11. Following a structured transition approach 2. Structured Transition Approach • Once selection is complete, a structured transition approach provides the foundation for a successful ongoing relationship • The real work begins after the selection is complete $$ Realization Key Activities First Article • Full production • Performance realization • NPI Stabilization and Full Transition Contract Finalization • Implement business relationship • Build inventory buffers • Yield management • Performance mgmt. (MBR/QBR) Ramp • Material, manu equip, document transfer/installation • Training and certification • Final acceptance requirements IP Transfer and Manufacturing Certification Supplier Selection • Joint service agreement • Business process and IT definition (OEM/supplier; Supplier/CM) • Capacity planning • Performance expectations and scorecarding Business Relationship Definition • RFQ and contract negotiation • TCO update • Transition planning • Delivery methodology & Stocking requirements Supplier Selection and Negotiation Supplier Notification/ Last Buy Ramp Down • Business as usual • Communication management • Transition planning Maintain Existing Relationships Time (6 – 12 months)

  12. 3. Cross Company Collaborative Management tools Implementing collaborative tools • Cross company collaboration tools utilizing leading web based portals are critical to facilitate communication and management • The simplified slot plan was an example of a collaborative web based tool used to facilitate accurate customer commits Input: SLR manufacturing data (MPS and PS) Output: Global view of available slots for commitment to customers Input: Asyst demand data (Sales Orders and Opportunities) Virtual cross company web based “Available to Promise”

  13. 3. Cross Company Collaborative Management tools Implementing collaborative tools Continued • The CTB waterfall chart is another example of web based tool used to manage critical component shortages across companies • The CTB allows planners across companies and the globe to easily identify the material constraints impacting production “Clear to Build” simulation Input: Asyst demand and BOM data (MPS, Sales Order and BOM) Output: Common near real time web based global view of shortages for use by both companies Input: SLR manufacturing and procurement data (PS, LT, Inventory OH, and PO Commit Dates) ~20 more columns of data and status Virtual cross company web based “Clear to Build”

  14. *Key Asyst vs. SLR Sourcing Responsibilities Manage Contracts and RFQ Receive Materials and Manage Quality Select Suppliers and Manage Transition Manage Supply Base Performance Plan, Purchase, and Expedite Materials Define Sourcing Strategy Process Payment Provide biweekly MPS to drive materials Resolve escalated purchasing execution issues Support day to day purchasing execution/material shortage issues (interim/short term) Manage and improve supplier quality Resolve escalated quality issues Manage corrective action resolution Lead cost reduction activities Lead supplier performance evaluation and improvement activities Lead scorecarding, MBR, and QBR activities Lead supplier selection, qualification, and transition activities Define AVL including source, price and LT Negotiate contracts with suppliers Execute RFQ activities Define commodity strategies Set component inventory levels Resolve escalated payment issues Asyst Plan materials based on MPS (pull in, push outs, and cancellations) Execute purchasing activities Resolve day to day purchasing execution/material shortage issues with suppliers Support cost reduction activities Support supplier evaluation Provide data for scorecard development Participate in MBR and QBR activities Receive Material, and manage day to day quality issues Manage MRB and RTVs Gather quality data (Incoming, DPP, Final Inspection, and CAR) Support supplier selection, qualification, and transition Lead first articles and supplier ramp Maintain AVL in VM Support commodity strategies and prepare for select commodity transition Process invoice and supplier payment Provide input into contracts and RFQ SLR 4. Localized Staff with Clear Roles and Responsibilities Defining clear responsibilities • This example shows how clear responsibilities were divided to achieve continuity of supply & cost reductions

  15. Defining even clearer roles 4. Localized Staff with Clear Roles and Responsibilities • Not all commodities and sourcing roles should be transitioned to the outsource partner until warranted: Demonstrated performance Key Asyst vs. SLR Sourcing Roles by Commodity Receive Materials and Manage Quality Manage Supply Base Performance Select Suppliers and Manage Transition Manage Contracts and RFQ Define Sourcing Strategy Plan and Purchase Materials Process Payment Likely to Transition Largest Cost Savings Achieved with Transition to Asia: 20-50% SLR Primary Asyst Approval

  16. Maintaining control of product data 5. Robust IP Protection and ECM Management • Product data control should remain with the OEM, however establish collaborative PLM/ECM processes to maintain it across organizations Engineering Change management Product Life Cycle Management Initiate Change Implement Change Document and Release Change Design & Development • Design & document product • Develop prototype • Develop manufacturing process • Select and manage components • Initiate change request • Initiate and prepare ECN • Conduct ECN analysis & corrections • Conduct material analysis & finance approval • Conduct CIB review & receive approval • Enter data & approve release • Implement productchange Several processes require cross enterprise collaboration & data synchronization

  17. 6. Senior Management Commitment and Focus on Metrics Focusing on the metrics that matter • Senior management across both organizations must be responsible for the results • Track key metrics and drive performance improvement from the top • Significant results were achieved with the transition Supply Chain Performance Impact: Flexibility & Responsiveness On Time Delivery Improved >200% Long Lead Time Materials Dropped by 65%

  18. 6. Senior Management Commitment and Focus on Metrics Focusing on the metrics that matter Continued • Senior management across both organizations must be responsible for the results (Continued) • Track key metrics and drive performance improvement from the top • Significant results were achieved with the transition Manufacturing Cost Impact Manufacturing Spend % of Revenue Dropped >20% Legacy Product Material Cost Reduced 10 - 20% Goal is 5-6% Also saved Freight & Lead Time

  19. Asyst next steps • Transition more ownership to SLR as performance continues • Change the culture to “Own the Business Metrics” • Build up Quality Management at SLR • Transition commodity management and supply pipeline management roles as warranted • Investigate new product introduction opportunities • PCBA design & layout • Transition products from Japan entities • Continue to manage to the metrics

More Related