Management of your outsource manufacturing does not have to be an expensive proposition and companies can gain the competitve edge and avoid being out-manufactured without breaking the bank.
Large companies manage their outsourced manufacturing by having key people stationed strategically in Asia to manage their interests. Ideally, they should develop real-time working relationships with the subcontractors, and attend to daily hiccups and problems within the same day at the Subcontractors. Good approach, but a huge cash drain with all the extras thrown into the equation, costing $100’s of thousands of dollars per person each year.
Small companies cannot afford the large expense of foreign assignments or the time required finding local talent. In the mean time, they end up using in-house key resources that are pulled from critical projects to attend to the emergency problems and every day business. These people have to fly over to Asia to meet with the Subcons to solve problems, expedite your parts or negotiate with them face-to-face. This can take several weeks out of the year and can be very expensive. While this approach may solve one or two problems at a time, it is more of a fire-fighting approach. You are always working from behind, instead of proactively managing and improving your business.
SOMC is an inexpensive proposition for companies. Our business model was developed to keep manufacturing costs lean. This is why you came to Asia in the first place. How do we do this? Our overhead was designed to be an extremely low cost profile from inception and is primarily due to our efforts, not to carry the cost baggage normally associated with foreign assignments. This model gives our clients best cost possible based on local economies, but with seasoned senior executive level expertise and an acute understanding of the urgency of reacting to your requirements and business culture. Our business model truly sets SOMC apart and makes us unique, as you cannot find this high-level expertise, capable of adapting quickly, at a cost that does not put a drain on the bottom line.
8/02/2010
6/22/2010
Manufacturing is a Competitive Advantage – Why Should you Care?
Margins are ok, the factory and subcontractor are making deliveries to customers, and quality is acceptable, what is the big deal? There is no big deal until margins begin dwindling, deliveries start to miss, and quality starts lagging and affects re-orders and reputation.
If your company has a large percentage of new product delivery with high margins or your company has higher percentage of legacy products with nominal margins, you need to pay attention to your manufacturing operations and cost to be able to extend the life of your high margins and/or become more competitive in the legacy products.
You cannot survive the competition without a manufacturing advantage. Do you want to compete or dominate your market?
Making manufacturing a competitive advantage cannot be accomplished by visiting your virtual factory once a month, a quarter, or twice a year. This is not managing manufacturing; this is a visit to Asia. It can only be accomplished by managing your manufacturing operations on a daily basis. This is how successful companies get successful and stay successful. They develop outstanding working relationships with subcontractors, they get the best cost, delivery, and quality available, and they work closely with the subcontractors on yields, cycle time, and process improvements, etc., to continuously reduce cost. This is what SOMC does for its’ clients. We have done it before and we continue to do it today
Someone will always jump on a good product and discover ways of making it better and cheaper. Why leave your new technology to those not quick enough to develop it first, but are more competitive and certainly smart enough to know how to improve on it from a manufacturing cost, quality, and delivery standpoint? This is why smart companies understand how important manufacturing is to the company as a competitive advantage and SOMC can help you avoid being “out-manufactured”.
Henry Ford said, “Competition is the keen cutting edge of business, always shaving away at costs”. This is true; keep your margins high by continuous improvement in your manufacturing operations. Your customers will want good quality at cheaper prices. As your ASP’s erode, you will need to be ready with the absolute best manufacturing practices available to you. This is manufacturing as a Competitive Weapon.
“A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large”, Henry Ford again. This literally translates to best cost, best delivery, and best quality. The best thing your company can do to get on top and stay on top is provide your customers with world-class service before they know they are not getting it from you.
SOMC can help you develop your competitive advantage and deliver performance to your customers.
Click on the SOMC logo to the right for more information;
If your company has a large percentage of new product delivery with high margins or your company has higher percentage of legacy products with nominal margins, you need to pay attention to your manufacturing operations and cost to be able to extend the life of your high margins and/or become more competitive in the legacy products.
You cannot survive the competition without a manufacturing advantage. Do you want to compete or dominate your market?
Making manufacturing a competitive advantage cannot be accomplished by visiting your virtual factory once a month, a quarter, or twice a year. This is not managing manufacturing; this is a visit to Asia. It can only be accomplished by managing your manufacturing operations on a daily basis. This is how successful companies get successful and stay successful. They develop outstanding working relationships with subcontractors, they get the best cost, delivery, and quality available, and they work closely with the subcontractors on yields, cycle time, and process improvements, etc., to continuously reduce cost. This is what SOMC does for its’ clients. We have done it before and we continue to do it today
Someone will always jump on a good product and discover ways of making it better and cheaper. Why leave your new technology to those not quick enough to develop it first, but are more competitive and certainly smart enough to know how to improve on it from a manufacturing cost, quality, and delivery standpoint? This is why smart companies understand how important manufacturing is to the company as a competitive advantage and SOMC can help you avoid being “out-manufactured”.
Henry Ford said, “Competition is the keen cutting edge of business, always shaving away at costs”. This is true; keep your margins high by continuous improvement in your manufacturing operations. Your customers will want good quality at cheaper prices. As your ASP’s erode, you will need to be ready with the absolute best manufacturing practices available to you. This is manufacturing as a Competitive Weapon.
“A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large”, Henry Ford again. This literally translates to best cost, best delivery, and best quality. The best thing your company can do to get on top and stay on top is provide your customers with world-class service before they know they are not getting it from you.
SOMC can help you develop your competitive advantage and deliver performance to your customers.
Click on the SOMC logo to the right for more information;
6/06/2010
Tools of the Trade
It never ceases to amaze me, how companies approach solving their manufacturing problems without using the right tools. Critical to developing and maintaining your manufacturing to perform at world-class standards is, how we look at the problem itself and the approach we take to solving problems.
When I sit in a meeting to solve a manufacturing problem and listen to what is being done to address it, I expect to see an overall graph depicting the indices having the problem. Then, I would want to see a breakdown of the issues associated with the bad indices in a Pareto chart of the defects. Lastly, I would look for action plans based on the Pareto chart to address the specific corrective actions. In the actions, I expect to see not only who is going to do what and when, but also what impact will the action have on the Pareto chart and the overall indices. I am never surprised to see that not only do managers not use Pareto charts to further breakdown the problem, but also they fail to ask when the actions will be complete, not to mention what the impact will be. Without understanding what affects the action will have, there is no way to understand how to prioritize the actions or if they will even have an impact.
Using this simple process of a 3 panel slide we can show 1) the problem, 2) what is the makeup of the problem in a Pareto chart and, 3) actions to be done by who and when, and what the impact to the problem will be.
Once we understand the problem, we can then apply the projected impacts to the chart in the form of our improvement forecast on the overall indices graph and track our progresst. This is an excellent way to keep your group on track with real fixes that have a positive impact on your problem and to communicate within your group and management describing how and when you plan to fix a problem and the expected results.
If you wish more details on the subject, please don't hesitate to contact me.
When I sit in a meeting to solve a manufacturing problem and listen to what is being done to address it, I expect to see an overall graph depicting the indices having the problem. Then, I would want to see a breakdown of the issues associated with the bad indices in a Pareto chart of the defects. Lastly, I would look for action plans based on the Pareto chart to address the specific corrective actions. In the actions, I expect to see not only who is going to do what and when, but also what impact will the action have on the Pareto chart and the overall indices. I am never surprised to see that not only do managers not use Pareto charts to further breakdown the problem, but also they fail to ask when the actions will be complete, not to mention what the impact will be. Without understanding what affects the action will have, there is no way to understand how to prioritize the actions or if they will even have an impact.
Using this simple process of a 3 panel slide we can show 1) the problem, 2) what is the makeup of the problem in a Pareto chart and, 3) actions to be done by who and when, and what the impact to the problem will be.
Once we understand the problem, we can then apply the projected impacts to the chart in the form of our improvement forecast on the overall indices graph and track our progresst. This is an excellent way to keep your group on track with real fixes that have a positive impact on your problem and to communicate within your group and management describing how and when you plan to fix a problem and the expected results.
If you wish more details on the subject, please don't hesitate to contact me.
5/25/2010
Jerking Manufacturing Around
“Jerking manufacturing around is cost effective” are you kidding? Believe it or not the director of planning, of what has turned out to be a successful midsized company, made this comment more than once. Albeit, this statement was made a few years ago and you guessed it, he is no longer with the company.
When I heard this statement coming from the mouth of a senior director in the company I was, needless to say, floored. There may still be people out there that think this way coming from whatever logic they have conjured up in their minds, but thankfully the business educated prevail.
Jerking your manufacturing around is like saying cost is no object in manufacturing. It would have been interesting to see this guy talk about the jerking manufacturing around and the inconsequential cost of manufacturing to Henry Ford while he was developing his high volume automation in the day.
If you have folks in your organization that subscribe to this thinking I want you to know it’s wrong and you have options to the ” jerk around manufacturing theory” with our company www.semiconoutsourcemgmtco.com .
When I heard this statement coming from the mouth of a senior director in the company I was, needless to say, floored. There may still be people out there that think this way coming from whatever logic they have conjured up in their minds, but thankfully the business educated prevail.
Jerking your manufacturing around is like saying cost is no object in manufacturing. It would have been interesting to see this guy talk about the jerking manufacturing around and the inconsequential cost of manufacturing to Henry Ford while he was developing his high volume automation in the day.
If you have folks in your organization that subscribe to this thinking I want you to know it’s wrong and you have options to the ” jerk around manufacturing theory” with our company www.semiconoutsourcemgmtco.com .
4/27/2010
What is the number 1 reason for businesses to outsource anything today?
In the “old days”, 10-15 years ago, cost was the number one motivator for outsourcing a variety of business operations. Cost may very well be on the top 10 list of reasons to outsource today but more and more companies have discovered other benefits for outsourcing their manufacturing and other business operations. Here are a few of the other benefits:
1. Access to other technologies
2. Reduced in-house capital equipment expenditures
3. Allowing corporate to focus on developing/marketing new products rather than fixing manufacturing issues
just to name a few.
Cost is not the only reason we outsource today, for sure. Companies have found the benefits to increased profitability not only lies in the immediate returns that were initially gained in outsourcing but using outsourcing allowed them to focus and develop aggressively to hit their markets harder with new products while essentially relying on other companies to do their part of the process which supports the bigger strategic picture.
Typical functions outsourced have been IT, HR, design engineering, recruiting and so on. It’s time for companies who outsource their manufacturing to realized more benefits can be had by outsourcing their subcontractor governance functions as well. To do this successfully you need to find people that can quickly align and understand your corporate culture, someone on the ground where your manufacturing is and people who have a demonstrated record of accomplishment in operational improvements.
1. Access to other technologies
2. Reduced in-house capital equipment expenditures
3. Allowing corporate to focus on developing/marketing new products rather than fixing manufacturing issues
just to name a few.
Cost is not the only reason we outsource today, for sure. Companies have found the benefits to increased profitability not only lies in the immediate returns that were initially gained in outsourcing but using outsourcing allowed them to focus and develop aggressively to hit their markets harder with new products while essentially relying on other companies to do their part of the process which supports the bigger strategic picture.
Typical functions outsourced have been IT, HR, design engineering, recruiting and so on. It’s time for companies who outsource their manufacturing to realized more benefits can be had by outsourcing their subcontractor governance functions as well. To do this successfully you need to find people that can quickly align and understand your corporate culture, someone on the ground where your manufacturing is and people who have a demonstrated record of accomplishment in operational improvements.
3/23/2010
Why would any COMPANY consider outsourcing their subcontractor management?
If you are a Startup semiconductor company, Fabless semiconductor company, or a small to midsized IDM and answer yes to any of the following:
1. if you are a part time subcontractor manager
2. you want to improve your manufacturing performance to approach/exceed world class bench marks
3. you need to get new and older products to market without delay and on time
4. you don’t have the time to look at alternative sources for better unit pricing or new packages
5. you don’t have subcontract manufacturing expertise currently on your staff
6. you want to augment your existing subcontractor management staff expertise with additional resources
7. you want more time to focus on important projects/functions in corporate
8. you want to know hour by hour accounts of special projects in the factory
9. you don’t want to hassle with relationships that need to be built on in order to get what you need from subcontractors in crunch times
10. you are paying more than $100k a year managing your subcontractors for visits, travel expense, salaries, etc.
you should consider alternatives to how you manage your subcontractors, research http://www.semiconoutsourcemgmtco.com/ and evaluate whether you can give your stakeholders more value for their money.
1. if you are a part time subcontractor manager
2. you want to improve your manufacturing performance to approach/exceed world class bench marks
3. you need to get new and older products to market without delay and on time
4. you don’t have the time to look at alternative sources for better unit pricing or new packages
5. you don’t have subcontract manufacturing expertise currently on your staff
6. you want to augment your existing subcontractor management staff expertise with additional resources
7. you want more time to focus on important projects/functions in corporate
8. you want to know hour by hour accounts of special projects in the factory
9. you don’t want to hassle with relationships that need to be built on in order to get what you need from subcontractors in crunch times
10. you are paying more than $100k a year managing your subcontractors for visits, travel expense, salaries, etc.
you should consider alternatives to how you manage your subcontractors, research http://www.semiconoutsourcemgmtco.com/ and evaluate whether you can give your stakeholders more value for their money.
2/01/2010
What is the secret to semiconductor back end assembly cycle time?
All we care about is that our cycle time (CT) is predictable for 100% of our lots so we can accurately quote delivery times to our customers. If we are concerned about how long our lots will take to complete, we want to look at leading edge indicators to avoid delays.
Assuming we understand what our Theoretical CT is and we know that we are not within 1.5 or 2x that number; here is a tip for you.
We want to look at 2 data points for our CT, Static (SCT) and Dynamic (DCT).
SCT gives us the absolute time it takes to process a lot through any assembly line and can be looked at in individual process steps. We know manufacturing has issues on a daily basis that affects our CT such as; machine stops/breakages, non-conforming material (MRB's), lost lots, etc. All these stoppages are included in the total SCT.
DCT tells us how fast lots can move through an assembly line when all things are normal. Dynamic CT is a calculation considering line WIP and machine throughput. This is in essence line speed. The calculation is a leading indicator of what your CT will be as opposed to Static, which is a trailing data point.
DCT is my first line of defense to avoid being late on customer deliveries. Monitoring my DCT, I can see the problems coming down the line and probably do something quickly to avoid having late lots. Looking at SCT alone will merely tell me history and offers no way to change the outcome.
Depending on how fast we fix relative issues on the line we would expect that DCT and SCT would intersect at some point in time, once issues on the floor are resolved and the line normalizes.
To me, it is as simple as breaking the problems down into smaller issues that can be accurately categorized and fixed during the processing, not after the lot is processed. This is real time correction to problems in the line and I use to DCT to alert me. If I see the DCT increasing on a daily monitor it is a good point to ask why and help put the problem to bed before it affects customer delivery.
I have read numerous articles talking about a myriad of ways to look at reducing assembly cycle times in semiconductor manufacturing. Using SCT and DCT have allowed me to achieve world class cycle times in past lives.
Assuming we understand what our Theoretical CT is and we know that we are not within 1.5 or 2x that number; here is a tip for you.
We want to look at 2 data points for our CT, Static (SCT) and Dynamic (DCT).
SCT gives us the absolute time it takes to process a lot through any assembly line and can be looked at in individual process steps. We know manufacturing has issues on a daily basis that affects our CT such as; machine stops/breakages, non-conforming material (MRB's), lost lots, etc. All these stoppages are included in the total SCT.
DCT tells us how fast lots can move through an assembly line when all things are normal. Dynamic CT is a calculation considering line WIP and machine throughput. This is in essence line speed. The calculation is a leading indicator of what your CT will be as opposed to Static, which is a trailing data point.
DCT is my first line of defense to avoid being late on customer deliveries. Monitoring my DCT, I can see the problems coming down the line and probably do something quickly to avoid having late lots. Looking at SCT alone will merely tell me history and offers no way to change the outcome.
Depending on how fast we fix relative issues on the line we would expect that DCT and SCT would intersect at some point in time, once issues on the floor are resolved and the line normalizes.
To me, it is as simple as breaking the problems down into smaller issues that can be accurately categorized and fixed during the processing, not after the lot is processed. This is real time correction to problems in the line and I use to DCT to alert me. If I see the DCT increasing on a daily monitor it is a good point to ask why and help put the problem to bed before it affects customer delivery.
I have read numerous articles talking about a myriad of ways to look at reducing assembly cycle times in semiconductor manufacturing. Using SCT and DCT have allowed me to achieve world class cycle times in past lives.
1/06/2010
The number one reason companies struggle with their subcontractors is inadequate governance.
Assuming you look at your subcontractor sites as an extension of your own factory, can you image visiting your factory manufacturing floor once a quarter or year? This is how most companies conduct business at their subcontractors and outsourced groups.
To get the best results from your subcontractors you need to approach them as your virtual factory. We say “I pay them for a service and I expect them to deliver”. Of course you pay them for a service as you would pay an employee in the factory, but the best results produced by managers comes from the old management term, “manage by walking around”. If your visits to your in-house factory floor were as infrequent as your visits to your subcontractors, the results of your manufacturing would be catastrophic to capturing the very essence of good management. The product of good management is producing quality products as fast as you can with the most competitive cost available.
There's no difference to me in my own employees or a subcontractor. I need to provide leadership to get them going in the right direction and I need to provide them with the right information and tools to get the job done correctly, I need to listen to their feedback and I need to keep them motivated.
Frequent visits to your subcontractor will improve the relationship and performance at the subcontractor as it would with your own factory employees on your own factory floor performance.
To get the best results from your subcontractors you need to approach them as your virtual factory. We say “I pay them for a service and I expect them to deliver”. Of course you pay them for a service as you would pay an employee in the factory, but the best results produced by managers comes from the old management term, “manage by walking around”. If your visits to your in-house factory floor were as infrequent as your visits to your subcontractors, the results of your manufacturing would be catastrophic to capturing the very essence of good management. The product of good management is producing quality products as fast as you can with the most competitive cost available.
There's no difference to me in my own employees or a subcontractor. I need to provide leadership to get them going in the right direction and I need to provide them with the right information and tools to get the job done correctly, I need to listen to their feedback and I need to keep them motivated.
Frequent visits to your subcontractor will improve the relationship and performance at the subcontractor as it would with your own factory employees on your own factory floor performance.
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