As every NASCAR enthusiasts knows, the speed of the pit crew can be the winning difference in a sport where lap times are measured in milliseconds and the distance between the first and second place finisher can be less than a car length. A situation that probably sounds all too familiar to many OEMs who are dependent on their suppliers to compete in tough global markets that have suddenly gotten even tougher via the ongoing economic meltdown.
And while Charlie Barnhart & Associates LLC isn’t in the business of writing testimonials, we think it’s important to let our OEM clients know that we’ve finally found an EMS case-study that has actually risen to the challenge of lower volume/higher mix manufacturing by application of the NASCAR philosophy of not wasting time sitting in the pit!
On the eastside of the Silicon Valley, in a place called Fremont, California, is a little known contract manufacturer named Victron (www.victron.com) who not only does a pretty decent job building electronics but also has figured out how to do it quickly and on short-notice. Unlike so many of their competitors, Victron’s focus is not just on manufacturing but rather on manufacturing quickly and doing so on-demand. How quickly? How does a one-day manufacturing cycle sound (and remember we’re talking lower volume/higher mix!)? How do they do it? You guessed it – LEAN!
To start off with, just like the NASCAR pit crews, Victron choose to focus on those activities that were within their span of control rather than obsess on issues they couldn’t change (i.e. forecasts are often wrong and most orders are received at the last minute). Their goal was to provide their race-car driver (the OEM) with the best turnaround time possible, thereby becoming part of the winning solution versus remaining part of the reason for losing. A refreshing idea!
In our review, they admitted that the first (and probably most important) step in the entire process was to accept the fact that batch manufacturing was not the answer and instead of trying to schedule the orders to accommodate the factory they would need to arrange the factory to meet the orders. Secondly, they decided to make the objective of a one-day turnaround their business as usual process – not an exception. Next they systemically evaluated and re-engineered every step in their operation (soup to nuts) to eliminate redundancy, bottlenecks and delays. Finally they implemented a process of fine-tuning each remaining activity to reduce wasted time and/or motion, sometimes via application of a technological tool, sometimes just by common sense. A process which they admit – took time, money and management commitment but clearly has yielded significant returns.
In their words, “By creating a business model around reality, and developing a time-based core competency, we have improved financial performance for both our shareholders and our customers”.
Victron isn’t about to provide me with a detailed list of how they managed to accomplish their one-day manufacturing cycle (so I can tell you and the rest of the world) but I can assure you they have done it. I’ve been through the facility and inspected their records, and what I’ve taken away from this case-study is something I’ve always believed and tried to teach in our Workshops and Symposiums… that it’s more about hard-work, common-sense and the application of the core principles of Lean Manufacturing than anything else.
Bottom-line, the customers of Victron have one of the best pit crews I ever seen, and after 20+ years in the EMS industry I’ve seen quite a few.
