Solectron and KEMET Pull Together on Lean Manufacturing
By Dr. Jeffrey A. Graves, CEO, KEMET Electronics and Mark Onetto, Executive VP of Worldwide Operations, Solectron

Solectron (SLR) and KEMET (KEM) have teamed up to pilot concepts of lean manufacturing and demand pull replenishment. The goal is to create breakthroughs in lead time and costs associated with logistics systems, generating revenue and profit growth for both companies. This unique Customer Supplier relationship, focused on Lean Six Sigma, maximizes the benefits of Lean principles as exemplified by Marc Onetto, executive vice president of SLR Worldwide Operations.

 "Many of the biggest opportunities for Lean improvements are with our suppliers. By working together and understanding the key elements of value and waste, we have already seen significant improvements in lead times and other key metrics," Onetto said. "The waste-elimination potential just by opening the door and beginning to talk to each other like partners is tremendous."

Dr. Jeffrey A, Graves, chief executive officer of KEMET adds, "Joint projects with customers like Solectron, who understand the value of Lean concepts and variation reduction, will help redefine the way KEMET works with global customers. The result will be reduced waste throughout the fulfillment process, shortened lead times and lower costs."

Lean Manufacturing's focus is to shorten production flow by eliminating waste (muda). The practice, first developed by the leaders at Toyota Motor Company after World War II, defined several of the principles of Lean including Just-In-Time Manufacturing (JIT) and a Pull Production System as defined below:

 Just-In-Time (JIT): Producing the product at the correct time in the correct amount to meet the customer's requirements - No More; No Less.  The opposite of Just-In-Time is "Just-In-Case" -  avoid this temptation.

 Pull Production System: A visually driven method for controlling the flow of resources in a production process by replacing only what has been consumed. Production schedules are customer order-driven, based on actual demand rather than forecasting.

Lean is viewed as the most important approach to impact U.S. industry for the next decade. "Lean Six Sigma changes the way Solectron operates," said Onetto. "Lean Six Sigma empowers every employee to help make drastic improvements in the company's performance. It significantly improves our quality and reduces waste. It cascades across the company to drive new ways of thinking about our business. And it reinvents the way we serve customers and partner with our suppliers."

The Solectron / KEMET team began the pilot by creating a Current State Map. The map identifies actions required to bring the product through manufacturing, from raw material to the end customer. The team assessed each step in the process and designated it as value-added, value-enabling, and non-value-added. Value is defined as physical changes to the product, customer demand, and accuracy.

Typical results of a "Current State Value Stream Map" analysis show that 80 - 90 percent of total steps are waste. In addition 99.9 percent of throughput time is wasted. Most managers and production associates expend the majority of their efforts on hands-off walk arounds and logistics complexity. Consequently, lean manufacturing produces noticeable results:

* Inventories shrink by 90 percent
* Throughput Time falls by 87 percent
* Productivity doubles to quadruples
* Defects are reduced to less than 3.7 Defects per Million Opportunities (DPMO)
* Waste drops 60 percent
* Work in Progress (WIP) reduces 70 percent

The team identified and began to eliminate the seven types of waste. An evaluation of the current process capability of production Forecast vs. Shipped vs. Consumed was performed in order to establish an effective Pull System based on JIT.

The following Critical Metrics were established:
*  Replenishment Lead Time
*  Delivery Reliability to Request
*  Process Capability of Product Forecasted vs. Shipped vs. Consumed.

These metrics will be measured before and after the pilot is implemented. The "Future State Map" was prepared once the metrics were identified.  The Solectron / KEMET Team result was replenishment lead time reduction from 10 days to 3 days.

The Team is currently validating its Lean Pilot Program and identifying other product lines for which to apply the pilot; however, SLR and KEM do not plan on stopping there. Dr. Graves states, "For KEMET, Lean is a journey and culture that never ends. It is not just another initiative; it is essential to our continued success in this highly competitive global marketplace for electronics." After all, leading companies such as Toyota estimate they are only 50% waste free*. 

*Quoted from Superfactory Lean Manufacturing Excellence Program(tm)