Baldrige National Quality Award 1991 Recipient
leading independent provider of customized integrated manufacturing
services to original equipment manufacturers (OEMs) in the electronics
industry, Solectron specializes in the assembly of complex printed
circuit boards and subsystems for makers of computers and other
electronic products. Solectron also provides system-level assembly
services, such as assembly of personal computers and mainframe mass
storage subsystems, as well as turnkey materials management, board
design, and manufacturability consultation and testing. The firm
focuses its marketing efforts on value-added projects requiring
a high level of reliability and quality, rapid turnaround time,
and responsiveness to change.
By focusing on customer
satisfaction, exploiting advanced manufacturing technology, and stressing
continuous improvement in operations and services, Solectron has demonstrated
that high quality and high efficiency translate into low total costs and
timely delivery. Solectron competes successfully with both strong international
competition and also with the internal production capabilities of its
customers. Indeed, major computer firms known for manufacturing
efficiency have closed internal assembly operations after determining
that outsourcing the work to Solectron not only lowered costs but also
improved quality. About 90 percent of new business is additional work
from established customers. These customers have benefited from defect
rates that have fallen to within the five-sigma range, or 233 parts per
million, and on-time delivery rate of 97.7 percent over the last 2 years.
Consistent with the goals of its major
customers, Solectron has committed to achieving and then surpassing Six
Sigma quality in critical processes over the next 5 years.
Founded in 1977, Solectron
has grown from a small assembly job shop with annual revenues of several
hundred thousand dollars to an employer of 2,100 people who work at five
sites in San Jose and Milpitas, California.
Assembly of printed
circuit boards accounts for about 80 percent of business, with the remainder
divided among assembly of other electronic systems, subsystems, software
packaging, disk duplication, remanufacture of customer products, and design
and testing services. Solectron operates one of the world's largest surface
mount facilities for the assembly of complex printed circuit boards and
Among its some 60
customers are manufacturers of personal computers, workstations, disk
and tape drives, and avionics, medical imaging, and telecommunication
equipment. Some of these firms supply Solectron with all components for
assembly into the finished product. An increasing number of customers,
however, rely on Solectron to procure some or all components, thereby
reducing their investment in inventory, facilities, and personnel.
NEEDS DRIVE RESULTS
As a contract manufacturing
company, Solectron does not compete with its customers in designing and
marketing products. Although it offers an original equipment design service,
more often it manufactures a product designed by the customers. Solectron
competes on the basis of service, quality, and cost, and the company goes
to great lengths to determine how existing and prospective customers define
superior performance. Besides conducting exhaustive searches for information
on customers, competitors, and markets, Solectron has developed several
mechanisms for ensuring direct and frequent feedback from customers. One
of the most valuable is a weekly survey of all customers. The results
are compiled into a customer satisfaction index, which CEO Dr. Winston
Chen and other top executives review at one of their three weekly meetings
on quality-related issues. The survey information also is used to grade
the performance of each of Solectron's nine major divisions. Within the
company, a similar system is used to evaluate the performance of specific
work groups and departments in meeting the needs of their internal customers.
At Solectron, the concept of Continuous Improvement is a cultural
strength. The company has a strong top management team on a crusade
to revitalize American business through quality. The executive team
sets corporate quality targets and then works with teams to set
supporting goals in each functional area of the company. They have
relied upon several strategies that give them a high-energy, customer-focused
work force. These strategies, which include a strong "family"
orientation, an effective communication system, and an innovative
reward and recognition program, have held the organization together
through rapid growth. The management style is participative with
a high degree of coaching and autonomy. Solectron has a team-focused
approach to employee involvement, which relies on training and mentorship
to overcome barriers due to a multilingual work force composed of
workers from over 20 cultures.
Each Solectron customer
is supported by two teams that work to ensure quality performance and
on-time delivery. A project planning team works with customers in planning,
scheduling, and defining material requirements and lead time. A total
quality control team meets weekly for monitoring and evaluating production
with the aim of preventing potential problems and identifying ways to
improve process yields.
ARE THE BEST . . . AND GETTING BETTER"
information system, organized in a customized relational data base, enables
regular -- often real-time -- surveillance of internal quality performance
and process control indicators. Key performance data are charted in all
departments, and workers, most of whom are trained in statistical process
control and problem-solving methods, are empowered to make process improvements
and take corrective actions.
Control (SPC) is used regularly in all departments. SPC charts track performance
of each machine with measurements recorded in an SPC data base. Division
quality managers and the corporate quality director track and review results
daily. Since 1987 the average product rejection rate has improved to better
than 0.3 percent of shipments, a 50-percent improvement.
Upstream from its
assembly operations, Solectron works with suppliers to improve the quality
and reliability of their operations. As it does with its customers, the
company views its suppliers as partners in pursuing Six Sigma quality,
and it offers training and other technical assistance to help them continuously
Investments in advanced
technology are guided by Solectron's evaluation of its customers' future
requirements and top management's emphasis on enhancing manufacturing
capabilities. The company was quick to adopt "surface mount technology"
(SMT) that, unlike the conventional method, permits integrated circuits
and other components to be placed on both sides of a circuit board. Although
requiring higher levels of capital investment and assembly expertise,
offers the advantages of increased packaging density and improved product
performance. Solectron now has 19 surface mount assembly lines, and it
is developing new bonding and soldering methods to exploit the advantages
that SMT offers customers.
improvement efforts are paying off, as indicated by its chief indicator:
"customer satisfaction." It has won 37 superior performance
awards over the last 10 years, 10of those in 1990. After a recent quality
audit, a major customer rated Solectron as the "best contract manufacturer
of electronic assemblies in the U.S."
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Last updated: 04/27/2012