Solectron
Solectron: From Contract Manufacturer to Global Supply Chain Integrator
Brief Case Overview:
In 1977, Solectron was founded in the wake of the solar energy boom, and primarily focused on making solar energy products. They soon began assembling printed circuit boards for other electronic firms. Solectron was located close to Silicon Valley and its electronic industry, so a number of clients were readily available for its manufacturing services. In the early 1980s, Solectron turned their efforts towards contract manufacturing, which turned the job shop business into an important industry. Solectron began to purchase the manufacturing facilities of its customers, which enabled them to sign long-term supply contracts with them as well as increasing supply to multiple other customers. By the end of the 90s, Solectron had three strategic business units- Technology Solutions, Global Manufacturing, and Global Services. Solectron focused their business on superior customer service and respect for the individual. It was through constant assessment and continuous improvement that Solectron was able to earn the Malcolm Baldrige National Quality Award two consecutive times, which was a new record. Solectron continued to lead innovation in technological developments, which continued to increase their advantage over their competitors. In 2000, a softening economy led to falling demand for Solectron services, and at one point, Solectron’s inventory rose to an excess of $1 billion. After restructuring for the slower economy, Solectron was optimistic about its future in developing markets.
Questions:
What value did Solectron provide to its customers, and how did it evolve over time?
Value Solectron provided to its customers:
Cost – President Dr. Winston Chen insisted that lowest cost could only be achieved with highest quality. This element challenged the practice of their competitors.
Quality – Solectron’s high focus on high quality electronics
Brief Case Overview:
In 1977, Solectron was founded in the wake of the solar energy boom, and primarily focused on making solar energy products. They soon began assembling printed circuit boards for other electronic firms. Solectron was located close to Silicon Valley and its electronic industry, so a number of clients were readily available for its manufacturing services. In the early 1980s, Solectron turned their efforts towards contract manufacturing, which turned the job shop business into an important industry. Solectron began to purchase the manufacturing facilities of its customers, which enabled them to sign long-term supply contracts with them as well as increasing supply to multiple other customers. By the end of the 90s, Solectron had three strategic business units- Technology Solutions, Global Manufacturing, and Global Services. Solectron focused their business on superior customer service and respect for the individual. It was through constant assessment and continuous improvement that Solectron was able to earn the Malcolm Baldrige National Quality Award two consecutive times, which was a new record. Solectron continued to lead innovation in technological developments, which continued to increase their advantage over their competitors. In 2000, a softening economy led to falling demand for Solectron services, and at one point, Solectron’s inventory rose to an excess of $1 billion. After restructuring for the slower economy, Solectron was optimistic about its future in developing markets.
Questions:
What value did Solectron provide to its customers, and how did it evolve over time?
Value Solectron provided to its customers:
Cost – President Dr. Winston Chen insisted that lowest cost could only be achieved with highest quality. This element challenged the practice of their competitors.
Quality – Solectron’s high focus on high quality electronics