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Presented By:

Vinay Bhandari

Solectron: From Contract

Manufacturer to Global SupplyChain Integrator

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Solectron Corporation

Solectron Corporation was a global electronicsmanufacturing company for original equipmentmanufacturers (OEMs).

It pioneered the electronics manufacturing services (EMS)

industry in 1977 and is a leader in the field.

Solectron first customer designed and provides integratedsolutions that span the entire product cycle-from pre-production planning and design, to manufacturing,

distribution and end-of-life product service support-for theworlds leading electronics original equipmentmanufacturers.

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Solectron corporation

y Electronics Manufacturing Services provider

y Founded in 1977

y Headquartered in Milpitas, Calif.

y Sales of $10.4 billion in fiscal 2005

y

More than 50 locations worldwidey More than 50,000 employees

y Spans five continents, in more than 20 countries

y Serving customers in communications, networking, computingand storage, consumer products, automotive, medical and

industrial marketsy Two-time winner of the Malcolm Baldrige Award

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Solectron corporations Top Customers

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Solectron Corporations Business Units

TechnologySolutions

Which is provided technology building blocks thathelped customers minimize time-to-market for newproducts

Gl balMa fa t ri

Which provided design, new product introduction, andmanufacturing and distribution services

Gl balServi e

Which is provided repair, upgrade, and maintenance,as well as logistics, return management, warehousingand many other post-manufacture support activities

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Culture and Development

Solectron cultural development started in 1978,when Dr. Winston Chen joined the company aspresident. He used 2 basic principles to runthe company:

1. Superior customer service2. Respect for the individual

3. Low cost & high quality

We dont tell people, Youre good, or Youre bad. We say,Heres what the customers say. Thats very powerful tool.

Dr. Winston Chen

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The Five Ss

ySEIRI

ySEITON

ySEIKETSUySEISO

ySHITSUKE

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Supply Chain Solution

Design

Collaborativedesign support

Design for

excellence

Launch

Supply chaindesign andsourcing

New productintroductionengineeringservice

Manufacturing

PCB and subsystemmanufacturing andtest

System testassembly and test

Service

Fulfillment andlogistics

RepairEOL services

Materials andSupplier

Management Informationflows

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The Benefits customer satisfaction assurance

Created a newculture - Total

CustomerSatisfaction

Retaincustomers

longer

Become morecustomer

driven

Recognisedfor excellent

service bycustomers

Used as a toolfor

managementinnovation

Increasedrevenuethroughexisting

customers

Solectronwon theMBNQA

twice

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Solectrons Day-to-day practice

Quality

Process improvement

Knowledge sharing

Program managementCustomer satisfaction review

Customer satisfaction data review

Management training provided by a combination of company

executives and external guest speakers

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Supplier

WebPublishing

Supplier

/Customer infothru the WEB

WW MatlsDate

Sites

Report writer

Fast what if

CRM

Other FinancialApps

FinancialConsolidation

Core ERP Applications:MaterialsManufacturingFinanceService

Multisite Integration Model

Ware houseMgmt. system

PDM

Connectivity

Shop floorControl

Customer

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Synchronized Planning

Product DefinitionProduct

DevelopmentProduct

Introduction

Customer

Concept

New Product

IntroductionPrototype

New Product

IntroductionLaunch Produce

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New Business Model

y Solectron introduced a new Business Model purchasedmanufacturing sites from IBM.

y Model was repeated many times, and Solectron rapidlygrew.

y It acquired manufacturing facilities from customers, andused those to fulfill long-term supply contracts.

y It allowed for risk pooling, as fluctuating demands fromdifferent companies were smoothed, and safety stock levels

of common component inventory could be reduced

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Successful Integration of its Acquisitions

yAssign An Integration Team (4 to 8members)

y Consists of Finance, Human resources,

operations, Materials, ITyAcquisition Business Integration ChecklistyWork with acquired company for 3 to 6

monthsy Until the new employees acting as a

Solectron resource

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Impact of Companys Culture

y On the success stage: Quality Awards and day-to-daypractice make Solectron eager to expand its scale

y On the downturn: Fulfilling its customers

forecast( proved wrong), impact Solectronsinventory and suppliers.

y On the ability to response business downturn:Solectron has excellent culture on quality & diligentpractice. The downturn may impact Solectronsacquisition culture (strategy)

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y Technology solutions

y Global manufacturing

y Global services

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In the short term

a restructuring that includedworkforce reductions and facility closures

In the long term The use of outsourcing as an OEM strategy

continued to accelerate

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