VentureOutsource.com talked with Marc Onetto, executive vice president, operations, with Solectron Corp. Transcripts from that discussion follow.
VO: Since you’ve joined Solectron, there have been a lot of positive changes, and challenges, in operations. What is one major accomplishment that sticks out in your mind and how did you go about seeing it executed?
Onetto: One major accomplishment is the total transformation of our factories using the fundamentals of the Toyota Production System. This transformation has benefited our customers in – faster delivery, flexibility to changes, lower transformation costs and higher quality. Major progress has been made on the shop floor, resulting in – faster change-over-time, and reduction of WIP (work in process) inventory. Major improvements have also been accomplished in ergonomics and fool-proofing fixtures for our operators. All of these improvements have favorably impacted Solectron’s bottom line and have been a major contributor to the financial turnaround of the company.
VO: Execution is important for any contract manufacturer and is typically more important than what type of business model a contract manufacturer subscribes to such as vertical or virtual. To what degree have you had to improve Solectron’s operational sense of urgency and what obstacles did you find along the way in doing so?
Onetto: Solectron has always had a very strong sense of urgency and responsiveness to our customers. What has been improved in the last 18 months is the collaboration between our global sites to exchange best-practices and to work together to respond to our customers’ challenges. A major focus of improvement was the sustainability of our responses. For example: many of the continuous improvements we made are now irreversible because they are built-in the way we work everyday.
Hence, most workstations have been redesigned for flexibility and ergonomics. Moreover, most lines have been rearranged to eliminate wasted parts transportation and operators walking around. All warehouses are totally transformed using the “supermarket” principles recommended in the Toyota Production System. Jobs have been reorganized using the “doctor and nurse” organization, which optimizes the preparation of parts for the operation on the line.
VO: Factories cannot perform well on every yardstick. Which top three performance metrics do you drive into your management team to watch closely/manage aggressively?
Onetto: Metrics are being driven based on the three major requirements from our customers. (1) Response to customer demands – measured as delivery to customer requests and delivery to commit. (2) Quality – factory yields and field returns. (3) Cost Competitiveness – labor productivity and material cost reduction.
VO: Solectron is well-known for its post manufacturing services. Additionally, a recent Merrill Lynch survey indicated Solectron is best-in-class for IT/Web-based systems. What other end-market(s) do you see Solectron performing well in and possibly achieving an equal ranking of best-in-class?
Onetto: Besides our strengths in telecommunications, networking and computing, major efforts are being made to solidify our position and reputation as best-in-class in newer markets, such as: automotive, industrial and medical.
VO: Who do you admire (living or dead) and why do you admire this person?
Onetto: I admire Jack Welch (former CEO of GE). He was my boss for 15 yrs. and has been a model of a great leader who expects a lot, can energize people and can lead a large organization to success. I also have a lot of admiration for Toyota – whose leadership comes from an overall company philosophy, rather than one individual. Combining Welch’s transformation talents with fundamentals of excellence from the Toyota production system is my ultimate goal at Solectron.
VO: Thank you, Marc.
Onetto: You’re welcome. Thank you.
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