Team Assignment 3: Case Flextronics International Ltd.

Introduction

Flextronics International Ltd., headquartered in Singapore, was originally founded in

Sillicon Valley, in the year 1969 by Joe McKenzie. They provide electronics manufacturing
services (EMS) to original equipment manufacturers (OEM). An OEM refers to a company
that originally manufactured the product. Flextronics is highly vertically integrated, they
are concerned with the design, manufacturing, distribution and the after-market services
of their products. We can entitle Flextronics as the brand behind brands., since they
execute the operations that are being outsourced or assigned to them by large
corporation as for instance Philips, Microsoft, Ericsson, Cisco and HP.

Basic layout and corresponding advantages and disadvantages

Without the co-operation of Flextronics, Microsoft, originally a producer of software,

would not be able to bring the Xbox 360 to the market. The services of Flextronic
emphasize the importance of a faster time to market and the minimalization of costs. To
continue on the example of the Xbox 360 one can state that this product is manufactured
by making use of a product layout type. This indicates that the transformed resources
(materials and information) occupy a central role within this type of layout, in which the
transforming resources are located entirely for the convenience of the transformed
resources. Within the mass manufacturing process of the Xbox 360, the transformed
resources are transported through the production facility, which takes them past a
sequence of activities determined by a prearranged route.
Obviously, this layout type has its pros and cons. Firstly, one can state that by transporting
transformed resources by a prearranged route the flow is highly predictable, which
makes it relatively easy to control. Mass manufacturing processes like the one we just
dicussed are mainly characterized by low costs per unit. Additionally they offer
opportunities for the specialization of equipment. Finally, the relatively high speed of a
production line, provides a convenient movement for materials and information.

However, the product layout type also has its disadvantages. One of them is the possible
absence of mix flexibility. Moreover, the production line is very vulnerable in terms of
stagnation when being disrupted. Lastly, the work at a production line can be very
repetitive, which can lead to decreasing motivation amongst employees.

Link between layout design and the 4V profile

Both the repeatability of the sequence of activities and the systematization and
standardization of procedures contribute to the attractiveness of specializing equipment.
This will lead to an increase in volume, which is accompanied with a decrease of costs per
unit. The aspects of a mass manufacturing process as described above are all applicable
to the production process of the Xbox 360, which uses the product layout design.
Therefore, we can conclude that this process is characterized by high volume.

Non-flexibility, standardization and high volume, which are all aspects of the Xbox 360
production, all constitute to the claim that the product layout design is not accompanied
with high variety.

With
the
exception of the holiday period the demand for Xbox 360 is relatively stable throughout
the year. This results into a predictable production capacity, which goes along with high
utilization of resources and low unit costs. Although the sales of the Xbox 360 are still
increasing on the long term, sales numbers do not fluctuate heavily on the short term,
which indicates a low variation in demand.

As Microsoft makes use of the services of Flextronics in order to producte the Xbox 360 ,
they will not be able to experience very much of the mass production process. However,
since it is in the interest of Microsoft to verify whether the product is being produced
properly, they will appoint someone to keep an eye on the situation. The operation
process with a product layout is per-eminently suited to be monitored, which is beneficial
for its visibility. Obviously, the obtained information will be passed through towards the
CEO of, in this case, Microsoft. Hence, it would be ignorant to conclude that the visibility
is very low, since there are certain aspects of the operations process that need to be
exposed by Flextronics in order to keep their customer (in this case Microsoft) satisfied.
Therefore, it can be concluded that the visibility of this operations process can be
positioned between medium and low.

Process Technology
Information-processing technology
In order to increase efficiency and effectiveness, Flextronics decided to implement EDI
(Electronic Data Interchange) information systems in their communication strategy. This
is a form of extranet communication that provides for two parties to communicate
without human interaction and interpretation. The system uses standardized forms that
contain the data that is involved with the communication with suppliers.

Flextronics created FSP (Flextronics Supplier Portal) which incorporates web and EDI
functions. This system incorporates the following automated transactions:

 Forecasting
 Purchase orders
 Purchase order changes
 Order cancellations
 ASN – Advance Shipment Notice
 Forecast Response/collaboration

Materials-processing technologies
One of Flextronics’ customers is LEGO. Flextronics manufactures the toys, and employs
sophisticated facilities. Materials-processing has helped to make production and
assembly of materials more efficient and cost-effective. LEGO uses Automated Guided
Vehicles in their factory. These are independently powered vehicles which move
materials between operations. In LEGO’s case, these machines transport the pieces
between manufacturing workstations throughout the factory. The benefits of applying
AGV’s are independent movement, flexibility of routing and long-term flexibility of use.
Obviously, to LEGO, these aspects are more important to their production process than
the relatively high capital costs associated with the AGV’s.
Division of labor and job design
The activities of Flextronics consist out of many different operations, such as design,
manufacturing and distribution. For this part of the assignment we will discuss the
division of labor of the manufacturing operation, again using the Xbox 360 product to
clarify our answers.

The manufacturing operations of the Xbox 360 primarily consist of the individual
execution of work. Although teamwork might be important in other operations of
Flextronics, such as design, this is not the case for the manufacturing process. Flextronics
manufactures the Xbox 360 through the use of an assembly line, where each employee
works independently on a separate activity. The manufacturing process is characterized
by simple and separate activities, which can be performed by low educated employees.

There are different ways of applying the division of labor. We can distinguish among
three of them: job rotation, job enlargement and job enrichment.

After analyzing all three options we came to the conclusion that job enlargement will be
the most suitable and efficient application. The activities corresponding with the
assembly line can be typified as simple, repeatable and do not require a high education.
Therefore, the option of job enrichment would not be a suitable one, since it is often not
useful and effective to appoint additional responsibility, autonomy or possibilities for
decision making to low educated workers. Educated workers possess the skills and
knowledge in order to cope with these additional aspects of work, which the low educated
workers do not have. Moreover, we reckon that the option of job rotation, which implies
the periodically rotation of employees and their corresponding set of tasks along the
assembly line, is not in accordance with the objectives that are set by management of
Flextronics. With the production of the Xbox 360, Flextronics aims for high volumes of
output and low unit costs, which are being disrupted by using job rotation. Job rotation
disrupts the employees’ rhythm of work, the automation and it takes time for employees
to master the details of a new task. In contrast to the previous two options of dividing
labor, we can state that job enlargement is the only option in which the pros offset the
cons.

Job enlargement is the allocation of additional tasks to individuals who are currently
executing a task that can be classified as similar types. In order to clarify this we can make
use of the Xbox 360 example again. For instance, a line worker who usually only wraps
the Xbox 360 into plastic will from now on also put them into boxes. This simple example
illustrates how job enlargement can create a more
complete job for the workers, since they do not spend
all their time executing only one task. The decreasing
monotony of the job and the novelty that comes along
with new tasks, will create more job satisfaction among
workers which will lead to less labour turnover in the
long term. Additionally, workers will experience a
greater use of abilities that contributes to their skill
development (Donaldson, 1975). Obviously, job
enlargement also has its disadvantages. The experience
of more work pressure by employees is one of them.
Additionally, the implementation of job enlargement as a way of job design is always
accompanied by an introduction period in which it will disrupt the smooth flow of work.
This relatively negative aspect in the short term will be offset by the positive
developments in the long term.

To conclude we can state that the option of job enlargement will be the most suitable
taken into account the aspects of the assembly line and the objectives of Flextronics’ top
management.