Professional Documents
Culture Documents
QUESTION 1
Explain how the outsourcing requirements of OEMs
evolve during the time period from 1970s to 2001.
Did the benefits they derived from outsourcing also
change during the same period?
Derived benefits
Yes, benefits derived from outsourcing also change
between 70s to 2001.
Outsourcing made OEMs to allocate their resources on
core competencies such as research & development and
marketing. These three benefits were time-to-market,
economics and technology.
Time to Market
The pace at with which a company could service the
markets became a progressively competitive concern in the
1990s
OEMs could increase the time to market for their products
while working with EMS company
Economics
Asset utilization was better in case of EMS companies as
they could use the same asset to multiple companies thus
saving the cost
Technology
OEMs used to get exposed to latest technologies, and could
access the same, thus, saving high costs on startup and
production, due to outsourcing
QUESTION - 2
Explain how Solectrons value creation for its
customers evolved over the years through
expanded roles and scope of its offerings.
SOLECTRON BELIEFS
Customer First-strengthen customer partnerships by
providing products and services of the greatest value
through innovation and excellence.
Respect for the Individual-emphasize associate dignity,
equality and individual growth.
Quality-execute with excellence; drive to six-sigma
capability in all key processes; exceed customer
expectations.
Supplier Partnerships-emphasize communication,
training, measurement and recognition.
business
with
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EXPANSION OF BUSINESS
It expanded its services and by the end of 90s
it had three strategic business units:
Technology Solutions Which provided
technology building blocks which helped customers
minimize time-to-market for new products
Global Manufacturing Which provided design,
new product introduction, and manufacturing and
distribution services
Global Services Which provided repair,
upgrade, maintenance etc.
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VALUE CREATION
It concentrated on offering high quality,
responsiveness, communication, service and
technical support.
The main objective was to achieve customer
satisfaction by providing high quality.
Highest possible service
The ability to reliably meet variable end-market
demand
The ability to capture upsides and accommodate
downsides at lowest possible cost.
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Contd
Faster, more predictable and measurable
performance
Continuous Cost and Risk Reduction
Lowest total cost of ownership through
optimized supply chain networks
Continuous improvements through shorter leadtimes and rapid information
Supply Chain Visibility
Rapid access to reliable information
Standardized processes, tools, and reports at all
nodes in the supply chain
Question - 3
Solectrons Corporate Culture and its over ridding
emphasis on quality, was an essential element of
its success. Explain
Customer first
Respect for individuals
Supplier partnership
Business Ethics
Shareholder Value
Social responsibility
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Continued
Rapid Feedback System and Customer Satisfaction
measure process
Weekly P & L statement analysis for each production line
Highly diverse group of employees called associates
Benchmarked
Baldrige
Award
for
continuous
improvement
In 1991 & 1997 won repeatedly the Baldrige award
Contd..
For Continual Improvement:
Meetings on every Tuesday, Wednesday and
Thursday
Tuesday:- focus on internal customer satisfaction
Wednesday:- Focus on Quality & process
improvement and knowledge sharing
Thursday:- Customer Satisfaction & Programe
Management
Five 5 S of Solectron
1. Seiri (Organization) :
Distinguish things that are needed and those dont
Keep needed ones and throw rest
2. Seiton (Orderliness) :
Put things in the right order in designated area
Organized according to frequency of Use
Place for everything
5 S Contd.
3. Seiso (Cleanliness) :
Problems are more visible when everything is neat and
clean
5. Shitsuke (Discipline) :
Follow standard procedures company rules and regulations
& Safety procedures
QUESTION - 4
How did global expansion and technological
developments contribute to Solectrons ability to
move form a contract manufacturing supplier to
Supply chain Integrators?
Continued.
Acquisition of various manufacturing Sites e.g.
IBMs Bordeaux and France Plants
Repeatedly continued purchasing Manufacturing
facility from customers
Started Producing goods for other customers
adopting Risk Pooling method
Dimension
Elements
Benefits
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Synchronised
planning
Faster response
Trust building
Reduced bullwhip effect
Lower cost
Optimized capacity utilisation
Improved service
Fast response
Coordinated productionn planning &
Improved service
operations, procurement, order
Earlier time to market
processing, engineering change & design
Expanded network
Better asset utilisation
Virtual resources
Higher efficiency
Logistics restructuring
New Business models
Penetrate new markets
Mass customization
Create new products
New Service
Work flow
coordination
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Question 5
Comment on the new business model of acquisitions
that Solectron introduced in 1992. How did the
company successfully integrate these acquisitions?
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Contd
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Question:06
How did Solectron change its organizational structure
to facilitate end-to-end supply chain management?
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28
CONTD
Technology solution
Global manufacturing
new product introduction service and premanufacturing capabilities
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CONTD
Global Services
Offered product repair, upgrades and maintenance
service centres worldwide
offered services such as warehousing, logistics, returns
management, engineering change management and
end-of-life management
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Question - 7
Examine the drivers that led to the difficult
situation Solectron faced in 2001.
31
Wrong forecast
Estimation far more than even the most optimistic scenario
Pressure from OEMs to meet production demand
Solectrons Consumer First belief worsened the situation
further
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Question - 8
Comment on the short term and long term
measures that the company took during the
business downturn of 2001. What measures would
you have taken in the same situation?
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34
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Our measures
The measures that we would have taken:
First of all, we would critically analyse the costs and
other figures, e.g. cost of sales seems to be very high.
Second, combine facilities by geographical location or
business function,
When combining the facilities, one has to pay attention
to the balance of global presence and proximity to the
customers and resources.
Reduce the basic pay of the employees
Identify and adopt best known practices that can lead to
superior performance
Rehiring and training cost will cost to the company high
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THANK YOU