Applying Collaborative
Manufacturing
Case Study:
Milpitas, California
Introduction
This is the collaborative era: trust is in and adversarial
contingencies are out; real facts and shared information are the
foundation for business decisions and business relationships;
estimates or assumptions are regarded as guesses; working together with shared and confirmed information is the norm, not the
exception; and supply chains compete against supply chains.
Collaborative manufacturing concepts are based on developing mutual win/win relationships where two or more partners
move away from typical business adversarial positions to a
mutually beneficial sharing model. There are many business
issues driving this process, one of which is the shifting focus to
core competencies that is occurring in many major industries.
Others include global markets and supply networks that require
closer business process ties to ensure product data information
and best inventory management practices.
Collaborative manufacturing is not business as usual.
Collaboration is based on a notion of trust and confirmation of
events through information tools and openness. The effective
deliverable is a competitive advantage built on a non-adversarial partnership that provides synergism among the partners
and improved value for the end customer.
As a supplier of collaborative manufacturing services for
over 300 companies Solectron must build and maintain a level
of trust with its customers that goes far beyond contractual terms
and conditions. In addition to providing manufacturing services
there must be tools that allow their customers to participate in
a process of confirmation. This study will outline a number of
tools that have been put in place to build alignment and to provide
performance confirmation between Solectron and their customer/
supplier network. Although the alignment and information systems are impressive, tools are nothing more than tools without
the management commitment to the higher business relationship
objectives of building trust, confirming performance, and delivering a competitive advantage for their customer.
This is a case study of how collaborative manufacturing
concepts are being applied at Solectron Corporation, a multinational provider of manufacturing services. This example
provides excellent insight on virtual integration of businesses
based on mutually committed assets, aligned interests, and
joined business processes. A significant factor in this companyʼs success is a very strong collaborative culture that has been
developed throughout the company. People seem to instinctively recognize the need for openness and visibility.
Collaboration Synergies Inc.
Solectron Corporation, with annual revenue of $12 billion, designs, manufacturers and repairs electronic products
for brand name companies. You may not see a product with
the Solectron name but if you own an electronic product
from HP, Cisco, or Sony, it was probably built by Solectron.
Solectron, originally formed in 1977, is the worldʼs leading
electronic manufacturing services (EMS) provider, an industry
that has grown very rapidly by making non-core manufacturing needs of other companies their core competency. The
company is headquartered in Milpitas, California, with over
60,000 employees and operations in 23 countries serving over
300 customers. Some customers have multiple products and
each customer/product is likely to have its own supply chain. In
2002 over 32 billion parts were used in their customer products.
The term complexity does not seem adequate to describe the
material management or product data management issues their
business processes deal with.
Their 300 plus customers can contract for a range of
services that extends from providing contract assembly/
manufacturing only to full process management that includes
product design, design for manufacturability, supply chain development and management, prototype building and production
ramp up, packaging, shipping, and post-manufacturing services
including repair and call centers for end user service.
Development and Design
Manufacturing
Post-Manufacturing
CUSTOMER
Development and Design
Manufacturing
Post-Manufacturing
Building-block technology
modules
Certification processing
Circuit test development
Component engineering
Electrical design
Enclosure design
Environmental stress testing
Functional design ad test
Manufacturability design
Mechanical design
Prototype build
Qualification testing
Reliability engineering and test
Systems test development
Testability design
Backplane assembly
Component subsystems and
systems assembly
Direct fulfillment and distribution
Electromechanical assembly
Enclosure manufacturing
and assembly
Engineering change
management
Materials and supplier
management
New product introduction
PCBA
Power, packaging and cooling
Retail packaging
Supply-chain design
Systems testing
Vendor-managed inventory
control
Asset recovery
Customer contact center
CRM
End-of-life support
Failure analysis
Parts management
Product repair
Recycling
Refurbishment
Remanufacturing
Returns processing
Reverse logistics
Troubleshooting support
Upgrades
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• 2
Product Lifecycle Management
Product lifecycle management describes collaborative
information systems used to manage the information and
events associated with a product from concept through these
steps: design, manufacturing, distribution and recycling. The
capabilities of an effective system enable interaction between
departments within a company or an extended enterprise of
value chain partners.
Modern applications of product lifecycle management are
built around a closed loop process that begins with customer
requirements information management and concludes with collection and management of customer feedback information to
start the process over again. Such systems support and connect
global network nodes with proactive system tools that create,
store, and manage product and process information across the
extended enterprise. The use of the Internet provides a global
reach that can include real-time interactive sessions with participants anywhere.
Product Lifecycle Management
Business
Process
Collaboration
Manufacturing
Process
Collaboration
Supply Chain
Collaboration
Quality, Test
& Genealogy
Warehouse
& Logistics
Product
Design
Engineering
Collaboration Environment
and Data Storage
Delivery to
Customer
Product
Concept
Engineering
Product
Improvements
Service
Record
Customer
Comments
The actual production of design information is usually accomplished through collecting and blending information from
various engineering and design sources. The design competencies that might include customers, suppliers, marketing, manufacturing, and outside designers can be brought together in a
virtual conference room to review documents, make changes,
and keep current through immediate access to previous session
information. Information can be imported from various CAD
sources and presented in 3D form providing easier knowledge
sharing and a common view. A particularly important part of
the process is the ability for manufacturing process and tooling
design as well as the participation of other departments in the
early phase of product development.
Collaboration Synergies Inc.
The second major category of product lifecycle management
is the management and processing of the product design information through the production and delivery processes across the
supply chain network to customer delivery and product disposal.
This includes managing issues across the supply chain such as
product change, engineering change orders, product and product
information obsolescence, data integration and entry into and
from the ERP system, product service and improvement, sourcing management and tracking, and material and information flow.
Functionality can include collection and distribution of product
process data generated during production including who, what,
and when for each step in the production process, logistics, delivery, maintenance history, and customer use. In some industries
this can include details such the name of an operator at a supplierʼs
plant, laboratory test results for a specific lot, complete genealogy
data for each item in the bill-of-material, and it could extend to
maintenance information as provided by the end user or a third
party service provider.
Product lifecycle information and data management are
integral parts of the Solectron relationship with each customer
that begins with the usual part drawing and process information
on each product. Electronic links are established to provide
seamless information transfer between a variety of different
customer information sources and types to the appropriate
user within Solectron. The system is setup to support either
an information push or pull arrangement. In the pull environment the customer generates the product information and
maintains the data hub at their end transferring information to
the Solectron data vault when requested. In the push mode the
customer generates the product information that is transferred
to the Solectron data vault for storage and accessibility. To ease
information transfer it is not uncommon for Solectron to place
data input stations at the customerʼs location.
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• 3
Electronic Data Transfer
Customer
(FTP Push Model)
Solectron
Notification
README
Acknowledgement
CAD EXT
Data Encryption
BOM/AVL
GERBER
SCHEM
PKZIP
Data
Encryption
& Compression
ca-ftp2.ca.slr.com
FIREWALL
ASM DWG
Key
FIREWALL
FAB DWG
Key
PKUNZIP
(encryption Is
Optional)
Caddie
Process
SPECS
VECTORS
ECO
Design
Data
Transfer
Agile
Data Vault
MFG
The full data collaboration processes are outlined in the
Additionally, the system provides full customer and supnext illustration that shows how information is exchanged from
plier access with appropriate security control. Openness, viscustomers into the Solectron information system through direct
ibility, and connectedness are everywhere.
package transmission or through a data scrubbing process that
receives customer product data that is then translated and preIt is important to note that multiple customer business syspared for Solectron use. The collaborative system allows the
tems are linked to the Solectron ERP system to electronically
appropriate Solectron participants to
receive product information and manage the material, produc•
Receive and track customer packages
tion, and other business processes. Virtual linking of business
•
Vault all product data, documents, and files
processes is a significant tool for manufacturing collaboration.
•
Provide file check in and out
•
Maintain a complete history of product actions taken
and who participated
•
Provide tools for change control and
a record of the changes
Product Data Scrubbing
•
Manage engineering and manufacCustomer
Parse
turing change order broadcast and
Original
Customer Data
Customer
management
Customer
Customer
Customer
Transmit Packages
AML Validation
Product
Customer
•
Gain transmission to and access for
Data
Customer
Packages via
AML
FTP or EMS
Translate & Prep
Solectron users from remote sites
L
Direct
AM
Validation
Product Data
ted
a
Customers
d
•
Perform approved manufacturer list
i
Solectron
val
Un
ML
Product Data
dA
validation
Agile Manages
ate
alid
V
Product DNA
•
Connect to CAD/CAM operations
CAD/CAM Operations
• Receive & Track
Customer Packages
•
Provide product data to the Baan
• Vault All Product
Collaborate on
PCA CAD Files
Data, Docs, & Files
enterprise planning system (ERP)
Fabmaster
• Change Control
Agile eHub
Product Data
• Check In/Out Files
& Changes
• Maintain History
PCA Mfg Files
•
Send manufacturing execution sys• Remote SLR Access
• Remote Customer /
tem (MES) information to any set of
Supplier Access
global facilities
Solectron product
Supplier
Solectron
data & changes
Collaboration
Adapter
•
Provide support for service and repair
communicated to
Suppliers
Sites
any set of plants
activities including supply chain
Sites split BOM, add
site mfg details &
Supplier Product Data
management end of life processes,
• Fab, Stencil, Test Fixtures
execute production
Service
BaaN
MES
Supply Chain Notification
(Plant
BOM
View)
obsolete material disposition, and
& Repair
• Part Status Changes
• Stop Ships / Purges
design reuse.
Solectron Agile Solution Architecture
Collaboration Synergies Inc.
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• 4
O Approva
EC
Engineering Change Request (ECR)
Update ERP
t Re
te
uc
Solectron
Agile
eHub
da
ate
pd
U
e c ord
Customer approves
internally before
submitting to
Solectron
Solectron Approves ECO
d
ct R
Engineering Change Order (ECO)
Pro
Pro
du
Customer
Agile
eHub
l
l
O Approva
EC
c ord U
p
Update ERP
ERP Updated
Change
Cut-in
ERP Updated
Change
Cut-in
CUSTOMER
An important part of the Agile system is the ability to
manage the product change process enabling users to create
and approve changes on-line. Partners can collaborate in real
time providing shorter change-cycle times and reducing time
and cost in the manufacturing process.
•
Create, route, modify, and approve change requests
through a web browser.
•
Notify reviewers when a change is ready to be reviewed.
•
Keep partners involved in the process.
•
Manage and control the change with a workflow system.
The business value of theses systems is broader than the obvious idea of a community of stakeholders sharing information.
Solectron has built true business benefits derived through the
use of this system.
•
Companies can develop and introduce new products faster.
With the full product design always up-to-date and available for entities anyplace within the value chain, it is easier
to make revisions to products or to authorize changes.
•
There is special value during new product introduction
and manufacturing ramp-up by maintaining a current da-
Collaboration Synergies Inc.
•
•
•
tabase of problems, workarounds, and changes with easy
visibility. This allows quick information exchange between
the manufacturing process and the design team with interactive responses from anywhere in the value chain.
Product shortages and replacement options can be met
with a quicker response due to predetermined part compatibility and source information.
Engineering change orders can be more effectively issued
and tracked across the value chain.
Part genealogy and production information can be aligned
with product ion lots or serialized product-item numbers.
Product lifecycle management processes are aligned
through the Solectron Agile eHub providing product information visibility and management beginning with product design
and definition to change management and end of life support
processes. Openness, visibility, and proactive business processes keep each user up to date with the ability to review event
history and participate on-line.
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• 5
Synchronized Supply
Chain Collaboration
There are a number of programs in place to provide realtime collaboration with suppliers and customers. Imagine 300
customer companies each with their own ideas of how the supply chain should be established and managed. Included in the
supply chain are some vendors that are single source due to a
number of factors including intellectual property ownership. In
some relationships Solectron is responsible for the full supply
chain management including product development and material specifications and in others the customer buys direct from
suppliers and has material delivered to Solectron for receiving,
inspection, test, and use.
General Manufacturing
Enterprise Collaboration
Collaborative manufacturing is an idea that is based on
identifying customer requirements and building a competitive
advantage that constantly meets or exceeds those requirements
through performance that is measurable, open, and visible.
The key process in collaborative relationships is alignment of
the full expectations of the parties. The alignment process at
Solectron is formalized beginning with the Customer Focus
Team, a cross functional team of members from all areas of the
organization that speak for the interests of the customer who
usually has a similar facing team.
•
•
•
•
•
•
Manufacturing
Manufacturing
The Customer Focus Team is responsible to manage the functions and relationship with varying roles and responsibilities.
Engineering
•
Program
Manager
Quality
Customer
Test
•
Acct. Mgmt.
Production
Control
Sales
o
Strategic partnership development
o
Voice of the customer
o
Develop the business relationship
o
Customer insight
Project Engineer
o
Customer interface on technical issues
o
Responsible for process and quality improvement
Production Control
o
Production planning and scheduling
o
Material coordination
o
Coordinate delivery to match customer demand
Quality
o
Understand customer quality expectations and
communicate it to the team
o
Track and audit manufacturing and
information feedback
Program manager
o
Customer interface focal point
o
Overall business management
o
Maintain business relationship
o
Grow the business
Test
o
Customer interface for test issues
o
Responsible for all test related items
Mfg Management
o
Execute to the commitment
o
Responsible for manufacturing efficiency and
the people
Materials
o
Assures material to support the schedule
o
Responsible for all material issues
Materials
Manufacturing
Collaboration Synergies Inc.
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• 6
The second piece in the alignment process is the Customer
Expectation package that outlines in detail what will be measured and how. It is here that the customer interests are defined,
not in Solectron terms, but in the terms and description of the
customer. The agreed metrics form the backbone of the performance agreement with the customer and every member of
the organization can see and identify with the performance requirements. The customer expectations are formally measured
weekly using a weighted Customer Satisfaction Index scorecard
that is reviewed by management. Included in the measurement
program is a Customer Complaint Resolution Process that can
begin with an inadequate score on the Customer Satisfaction
Index or a complaint by a customer. Weekly open meetings that
can include company members, customers, and suppliers are
held to review performance and customer complaints. Performance that falls short of the agreed objectives follows a formal
Customer Complaint Resolution Process that can be initiated
by a below par CSI performance measurement or a complaint
by the customer.
Most companies have programs that provide measurement and
accountability. What seems unique here is the unrelenting use
of customer expectations as the metric that all can see, perform
to, and be measured against. It is openness and visibility that
drives collaboration among the participants. Alignment with
the customer provides the direction.
Customer Complaint Resolution Process
• Base on our integrate Six Sigma Lean
Communicate first 4 of
the 7 steps to the
customer and site
coordinator, and
present in CSI review
• Presented by a member of Sr. Management
Customer CSI
Customer Complaint
through CSI
SCI Score
No
of “B-” or less, sever or
repeated complaint
Escalate to Sr.
Management
No
Yes
Escalate to Sr.
Management
Communicate all 7-step
action form information
to customer and
site coordinator
Yes
CSI coordinator logs
CCRP
Functional Management
ACKNOWLEDGES
Complaint to Customer
withing 24 hours
Collaboration Synergies Inc.
Completed
within 3 working
days?
Closure acknowledged
by customer
No
Completed within
7 additional working
days?
Yes
Escalate to Sr.
Management
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• 7
One of the most significant collaboration tools within
Solectron is the virtual factory website MyFactory@Solectron
.com. The MyFactory portal is a continual work-in-progress
that is adapted to fit the requirements of customers, suppliers,
and the Customer Focus Team with a home page that reflects
information of a specific customer. Through access from an
internet browser a customer can view a number of processes
via a Global Desktop that has been customized to fit the specific customer profile and alignment features. The following
illustration provides a view of a typical entry screen. Since
Solectron may build products for companies that compete it is
necessary to build in full security measures to ensure all product and process information is protected.
The MYFACTORY@Solectron is not just a pretty tool
to entertain the customer. The full purpose behind the presentation is to build bridges of trust among participants in the
value-chain. It is not enough to tell the customer what is or will
occur. It is important to back the planned event information with
confirmation of what is actually taking place on the plant floor.
Trust is the fundamental element between collaborative partners.
Confirming events with real-time information builds trust.
Collaboration Synergies Inc.
Current applications on this customerʼs home page include:
VISTAS Virtual & Integrated
System Test Application Suite
VISTAS is a web based product test reporting system that
provides detail test information by unit or by specific report
format. The customer or other user with appropriate security
clearance can scan the system for in-depth visibility of test
processes and results.
Typical information items include:
Unit Completion Report
List All Units
List Passed Units
List Failed Units
First Pass Yield
Test Averaged Times
Test Cycle Times
Floor Snapshot
Process Discrepancy
Operator Notes
SOARS Solectron On-line
& Automated Reporting System
SOARS is a self service tool that allows personalized
on-line quality reports. This allows participants to format
their own personalized views of product quality information.
The system provides visibility through a global self-service
data warehouse for mining and trending, ad-hoc reporting and
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• 8
search, in-process data validation, and traceability for RC and
CA failures. The key element is the global self-service aspect
that allows collaboration openness and access
GRANTS Global Return Automation
& Tracking System
LIVECAM
If you are having a sleepless night or some production concern it is possible to turn on a camera that will provide a live view
of your products being manufactured anywhere in the world.
AGILE PDMS
GRANTS is used to track and manage the business issue
side of product returns including return material authorization, transportation, receiving, work-in-process, shipping
and transportation back to the customer. This provides a full
view of where a particular item of returned material is physically located within the product and rework system. Within
the GRANTS framework is the CATSweb corrective action
tracking system that manages the technical failure information
for returned material.
This is the entry into the product data management system
to view such items as engineering change orders, approved
manufacturer list, product data, and other specific product
data management issues. A key element with the system is
the ability to distribute and manage engineering change order
requirements through collaborative workflow tools. This includes process and product change as well as revision control and
management. The system is global and real-time providing every
participant access to the latest information.
CATS Corrective Action
Tracking System
DOCS
CATS is a global web based proactive corrective action
tracking system that is used to manage product issues and
problems from identification through disposition and corrective
action. The system provides a central repository of information regarding the incident, the steps taken toward resolution,
who participated, and an escalation process that pushes for
resolution. Access to this collaborative system includes the end
customer, the OEM, Solectron, and suppliers, providing full
visibility of issue genealogy from incident initiation to disposition. In addition to providing real-time status and reporting,
automatic e-mail notification provides built in traceability.
SFDM Shop Floor Data Management
This system provides current information on work-inprocess, released orders, open orders, shop floor planning, and
other information pertaining to orders released for manufacture. Specific reports include:
o
Component Usage Report
o
WIP Aging Report by Shop Order
o
WIP Aging Report by Operation
o
Active Work List
o
Latest List of Shop Orders
Collaboration Synergies Inc.
This area is a repository for general information including
assembly and test process instructions.
Currently in use by many Solectron facilities and customers is Active Business Partners (ABP), another tool that
provides deeper information access. ABP is a web based
system providing a centralized self-service information center
for customer orders, shipment tracking, invoices, build plan
shortages, work-in-process data, and team contact information.
All status information is provided in standard views that can be
downloaded by the user. This portal allows customers access
to the Customer Satisfaction Index (CSI) described earlier. The
CSI functionality provides easy entry and reporting against the
standard categories of quality, delivery/responsiveness, communication, service/flexibility, and technical support, as well
as additional subcategories, if desired. There is also a document management function that supports the need for Solectron
and partners to jointly post, share, and maintain commonly
exchanged documents within a centralized repository. The
application has a portal feature that provides the capability for
setting up a centralized single sign-on to other common applications used by Solectron and its partners.
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• 9
The Active Business Partners program is accessible
through the home page that allows partners to view pertinent
details regarding all projects within the system. Generally a
project is a contract with a customer at a location. “My Projects” allows the user to view all projects they have access
to. “My Applications” allows users to access miscellaneous
web-based applications. The “Message Center” box displays
“Alerts” and “Messages” for which immediate attention is
needed. Alerts are automatically generated by the system.
Alerts are proactive messages that are generated to cause an
action or to deliver operational information such as past due
invoices, orders on hold, shortages, etc. There is also a tool that
is used to generate messages for all users, customers, Solectron
employees or Solectron team members.
The ABP is the primary access for the Customer Satisfaction Index process. The system provides full visibility for all
participants to enter and respond to CSI issues including viewing guidelines and reports. There is a Document section that is
a storehouse of version controlled files where Documents users
can share information with each other and upload or post files.
The ABP system has built in security levels that restrict the
ability to change files.
There are many more details of the system that provide users with the normal everyday information that makes a business
run, most of which is not important until you need it and when
you need it, tomorrow will not suffice. It is the ready access to
the widest world of potential users that makes the Active Business Partners program effective as a collaboration tool.
Collaboration Synergies Inc.
As you read this case study you might often react with the
thought, “we do that too” or “how important can that be”. It is
important to look at how each piece contributes to the full picture. Collaborative manufacturing is not one giant step. Rather
it is the process of many steps that are aimed, formally or informally, at building closer relationships for the full value-chain
that begins with the end user and continues through the nth tier
supplier. It is the non-adversarial people-centric orientation of
the process that makes collaborative manufacturing something
different from historical management processes.
Solectron has many examples of tools that have been
established to continuously build trust as a fundamental
business strategy. This strategy has developed a significant
competitive advantage for the company and their partners,
provides a major tool for employee empowerment, and continuously builds and supports bridges with customers based
on trust and long term commitments.
Manufacturing at this company is never business as usual
or just part of the process. Manufacturing is Solectronʼs core
competency and it is done using modern business methods and
an adaptive attitude that allows them to be “your manufacturing
plant”. There is a constant vigilance and awareness that to succeed their performance must be better than the OEM customer
could do it themselves. Solectron must exceed the trust requirements that they will serve the end user interests as well as the
OEM whose name goes on the product and the shipping carton.
Collaboration of many perspectives is a major key ingredient in
every day-to-day business activity.
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• 10
The study was written by Michael McClellan of Collaboration Synergies Inc. based on interviews
at Solectron Corporation. Mr. McClellan has had many years experience in manufacturing industries with
responsibilities ranging from CEO to officer level operations responsibility. He has written two books on
manufacturing including Applying Manufacturing Execution Systems and Collaborative Manufacturing: Using Real-time Information to Support the Supply Chain.
He is currently President of Collaboration Synergies Incorporated of Vancouver, Washington, a provider
of advisory services to manufacturing companies in the areas of manufacturing execution systems and collaborative manufacturing concepts.
360.833.8400 • www.cosyninc.com
Collaboration Synergies Inc.
360.833.8400 • www.cosyninc.com
• 11