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It goes without saying that products, such as wearable electronics with advanced body sensors, are changing the way we live, but it's equally clear that they are driving a transformation in global supply chain requirements as well. The rapid pace of development and shortened time-to-market expectations mandate a completely advanced level of synchronization across the end-to-end supply chain – from product design to fast material acquisition to prototype manufacturing, and from volume production ramp to end-customer fulfillment.
Flextronics, electronics manufacturing services and supply chain solutions provider, operates from more than 100 spots around the world, but it quickly realized it needed a soup-to-nuts supply chain cluster in Silicon Valley to capitalize on innovative new-product concepts. Some of those great ideas come from people with little or no business experience and whose brainstorms are sketched “on the back of a napkin,” says Tim Griffin, senior director for supply chain operations.
Flextronics' own innovation, which caused it to take home the 2014 Supply Chain Innovation award, was to transform its Milpitas, Calif., manufacturing location into a state-of-the-art center of excellence supporting the supply chain needs of these new products. Within 18 months, its campus changed every element of its supply chain offering, and created one integrated end-to-end supply chain solution – the Silicon Valley Product Innovation Center.
“We were used to customers telling us what to do, not necessarily going to them – creatively.” says Griffin. “We needed a center that connects the concept, design support, knowledge of materials, and the rest of the components of the supply chain.”
Flextronics delivers design, engineering, manufacturing and logistics services to a range of industries and end-markets, including data networking, telecom, enterprise computing and storage, industrial, capital equipment, appliances, automation, medical, automotive, aerospace and defense, energy, mobile, computing and other electronic product categories.
In creating the Product Innovation Center, Flextronics focused on the total product life cycle – engineering technology labs to support early design and proof of concept validation, an upgraded manufacturing center dedicated to quick-turn prototype production with advanced 3D plastic and metal printing capability and customer-confidential manufacturing work spaces that include increased security and restricted access to protect customers’ intellectual property.
Established in 1990, the Milpitas site is a 600,000-square-foot campus with 12 buildings and is located in the heart of the Silicon Valley. Lean and Six Sigma DNA are embedded throughout the plant workforce, which enables continuous improvements on customer time-to-market, cost, productivity, flexibility and quality.
Management feels the center illustrates the benefit of synchronizing end-to-end supply chain performance across multiple functions, and of co-locating these services as a supply chain solutions “one-stop shop.” Since 2012, Flextronics has deployed the concept to multiple global sites.
Traditionally, the Milpitas site focused on low-volume, high-mix PCB assembly and system integration services for OEM customers. Based on product development phases, Milpitas provides services from prototype builds to repair and refurbishment for end customers. It plans, procures and assembles parts based on customers’ product bill of materials, makes finished products, and ships them globally from on-site warehouses utilizing advance business process tools. In management's view, Flextronics is its customers’ supply chain.
The emergence of so-called wearable technology (WT) products converged in Silicon Valley from 2010 to 2012. Products include augmented reality eyeglasses, headbands for monitoring brain activity, concussion sensors nestled within a helmet, sensor-guided canes for the blind and smart T-shirts for soldiers in the field. Led by industry giants like Google, Samsung and Nike, the market has captured the attention of a wider mass of professionals and start-up companies, and is promising to be a critical game changer in the technology landscape. However, the supply chain demands supporting WT product development and innovation exposed gaps in the services available in the electronics manufacturing services industry.
Very sophisticated tools and a high degree of specialization in multiple disciplines are required to design, prototype and make WT products. A streamlined product development process and manufacturing flow is a prerequisite to deliver on schedule and within the established cost targets. Manufacturing engineering needs to pull in established processes from a wide range of manufacturing technologies, and modify and appropriate them successfully. EMS providers’ capabilities typically have been spread across locations globally, as well as through multiple partners.
Since the new products in this growing industry are primarily consumer focused, and looks/shape/feel are differentiators, the capability of tighter security controls through the material management and manufacturing process become critically important. EMS providers must manage these requirements within a system that by definition supports multiple customers.
The race to release new products and implement new ideas drives a significantly accelerated pace of product concept through prototype through production manufacturing. Engineers do not have time to travel back and forth to China for the many steps and iterations in the process, says Jayne Carthy, senior director for business development. Changes must be made rapidly, and hands-on joint work running prototypes and analyzing output cuts weeks out of the development process. Matching the speed of innovations was a major challenge for any conventional supply chain team.
The transformation process of a PCBA manufacturing facility to Product Innovation Center began with an approach of identifying gaps to the vision, and creating an action plan by assigning owners and driving transformation through the site’s continuous improvement program. The site assigned seven leaders who worked in a collaborative environment to close the gaps in Sales and Business Development, Technology, Engineering, Operations, Materials, Quality, and Business Process.
Multiple cross-functional teams were formed at the site level to fix the gaps and improve the end-to-end supply chain business processes. The internal supply chain execution tools were streamlined to remove manual steps, increase efficiency and reduce time required to gather information on material availability and procurement.
All transformational changes were fueled by active employee participation. An online in-house continuous improvement portal was created by site Business Excellence and IT teams to assist site teams to track end-to-end supply chain continuous improvement projects, improve customer satisfaction levels, and meet management goals.
After 18 months, the Product Innovation Center was in business. In addition to business neophytes, established companies were welcome as well. Among the latter was Bio-Rad Laboratories, a major player in life sciences research and clinical diagnostics. Based in Hercules, Calif., Bio-Rad is a global operation and has more than 8,000 products.
Mark Buck, director of global supply chain at Bio-Rad, says Flextronics basically reinvented itself with the Product Innovation Center, and that has meant a great deal to the bottom line. “Time is money – in days, hours, minutes. They're tripling the speed of my time time to market.”
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