LEAN manufacturing is a global electronics manufacturing services (EMS) provider located in Flextronics de Mexico (FdM). The company is focused on efficiency and optimization of manufacturing flow. The EMS is a tough business that is driven by thin profit margins. EMS manufacturers rely on leveraging huge economies of scale and purchasing power. These companies focus on return on invested capital (ROIC) as a key metric because it provides a sense of how well a company is utilizing its resources to generate returns. FdM's success relies on how well it can optimize its floor space utilization while increasing capacity. In our case analysis we will examine each of the four different organizations of machinery assuming that the optimal level of production was achieved by introducing the U-shaped cell. Case Analysis:
The initial design that was implemented (long conveyor-paced straight line) required having 24 operators assigned per line with a Takt time of 15 seconds. The actual output of acceptable units was 135-138 pieces per hour totaling 1080-1104 per eight-hour shift. This is below design capacity with only 56.25-57.5% utilization. Reasons for inefficiency include:
* Periodic maintenance of the conveyor belt, defected products and breaks for operators * Conveyor-pace lines have an even rate of movement, therefore, if some workstations are faster or slower in completing their task in the allowed 15 seconds Takt time, a lag of the whole assembly process of the product is created. The second design (long manually paced line) required 22 workers with 15 seconds Takt time. While the efficiency increased the output rate remained constant at 1104 units per shift. Improvement was in labor cost reduction only. Reasons for inefficiency include:
* Takt time was kept at 15 seconds despite the caused stress and variation for workers. This eventually led to more errors, increased waste, thus, driving the production rates...