Facing a small number of components and high variation of configurations, here’s how one semiconductor connectivity tooling manufacturer found a way to lower cost and reduce lead times.
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BY STEVE WOBSCHALL
In its early beginnings, lean philosophy and practice focused on the factory. Lean manufacturing promised lower inventories, faster turns, reduced manufacturing lead times and reduction of waste in the production process. And it delivered. Early proponents touted it as the Holy Grail; after all, how could Toyota be wrong?
Obviously they weren’t, given the resulting competitive advantage.
But lean in the electronic components factory is only the beginning. As the philosophy is embraced throughout the enterprise, more and more projects are run using lean methodology, and lean concepts can be applied to the entire business.
Over time, lean begins to infiltrate the demand and supply network. This creates a Demand-Driven Supply Network (DDSN), including functions from customer relationship management (CRM) and product lifecycle management (PLM) in engineering, all the way through to the transportation management system (TMS).
 FIGURE 1. A QFN package with wire bonding. |
With collaboration across the supply and demand network, steady progress is made toward achieving a perfect lean market. And, as lean principles permeate the extended organization, greater benefits can be realized. But, since many of the benefits of lean are realized outside of formalized projects, they may also be harder to quantify.
A case study
More and more companies in the semiconductor connectivity industry have implemented lean to combat pressures for lower cost and reduced lead times. Not surprisingly, players throughout the supply and demand network have started to follow suit. One example is CoorsTek (www.coorstek.com), an industry leader in ceramic capillary tooling for the semiconductor industry, among a host of other ceramic products. One site produces high-precision tips used in various QFN (Quad Flat Non-Leaded) components, one of the most popular devices in the industry today. Figures 1 and 2 show the geometry dimensions of one style of tip.
The small size and low profile make QFN ideal for high-density printed circuit boards used in small-scale electronic applications such as cellular phones, pagers, and PDAs. The product profile–a small number of components with a high variation of configurations–was one of three key characteristics that also made it a good candidate for lean.
To uncover opportunities to reduce costs while maintaining high quality in the production process, the company began with time and motion studies on the plant floor, followed by defining product families and associated work centers and work cells. This was the second characteristic that now made the plant a candidate for lean, since a high degree of accuracy in inventory and product structures, along with a thorough knowledge of the processes on the shop floor, are critical for success in implementing ean. Simply put, this is the level of site maturity.
 FIGURE 2. A fine-pitch alumina ceramic capillary with 35 micro-meter tip. |
The third characteristic of a site ready for lean is management commitment. This includes indoctrinating the entire site into the concepts of lean and incorporating the methodology into every project going forward, since continuous improvement is never done. Along these lines, it’s best to have lean experts available to lead projects. Experts are defined as those that have led lean implementations before, typically carry a Six Sigma Black Belt as part of their credentials, and commonly hold some level of certification in project management, such as PMP.
The object is to build more experts along the way, and to eventually expand the capacity to take on more lean projects in additional sites. At Coors-Tek, the situation was ideal because the company has a well-established Operational Excellence (OpX) program that drives a culture of Lean Six-Sigma methodologies throughout the organization.
With the appropriate mix of product profile, site maturity and management commitment, CoorsTek was well on its way. To take the project one step further, the company needed software that could complement their work to date and facilitate the move to a paperless system. The goal was software as a tool, not a driver. CoorsTek selected QAD as a partner based on their focus on DDSN at manufacturing companies, strength in lean, and lowest cost of ownership among ERP vendors.
According to CoorsTek’s Len Rontanini, Lean Six Sigma Supply Chain Black Belt, “What we’ve found with QAD is how well it supported our lean transaction process as well as how it helped us manage a supermarket electronically with over 400 items and a few thousand Kanban cards.”
 FIGURE 3. Relative geometric dimensions, overall and tip, of the ceramic capillary tool used in wire bonding. |
The CoorsTek project resulted in an impressive list of accomplishments in the first 18 months:
- Reduced overall inventory levels by 50%;
- Improved overall cycle time by 10 days;
- Implemented work cells for final stage of production, cutting the process from seven days to two;
- Correctly sized upstream supermarkets (work centers with multiple machines of the same type) and implemented Kanban to require scheduling of only end items;
- Minimized the number of shop floor transactions.
Frictionless supply and demand
QAD envisions a perfect lean market as a frictionless supply and demand network, where information is freely shared in real time, processes are reduced to only value-added tasks, and waste is eliminated throughout.
QAD’s goal is to guide the global manufacturing community toward this marketplace vision, with industry-thought leadership, and innovative product and service offerings that help drive lean principles across the extended enterprise.
QAD’s Enterprise Applications provide a software backbone that enables collaborative execution across the manufacturing supply chain. With the release of QAD Enterprise Applications 2008, the company has extended its suite of capabilities designed to support the competitive requirements of the High Tech industry. Capabilities include PLM and regulatory compliance through a partnership with industry leader PTC, CRM, enterprise asset management (EAM) that includes preventive maintenance, transportation management, and enterprise performance management for tracking important key performance indicators (KPIs).
Combined with assessment and prevention efforts, QAD Enterprise Applications can help users manage many of the most crucial risks faced by global high-tech manufacturers today.
Helmut Oehring, managing director of information technology for Coors- Tek, says, “I’ve personally experienced first hand what it’s like not to have an environment that was supported by the QAD Enterprise Applications when we had an attempt with a different ERP system. We recognized that it cost us more to operate, and not only did we have to hire more people, but we also had to hire more sophisticated people because it was just that much more complicated to use.”
Oehring adds, “The simplicity of how we configure QAD Enterprise Applications just works for employees. They don’t have to fight the system to get their jobs done.” CS
STEVE WOBSCHALL is senior director of high tech and industrial markets at QAD Inc. (www.qad.com), an enterprise software vendor specializing in the development of solutions for managing manufacturing resources and operations that enable effective collaboration with customers, suppliers, and global partners.
Components of a lean-ready manufacturer
- Product profile–Small number of components with high variation of configurations.
- Site maturity–High degree of accuracy in inventory and product structures, along with a thorough knowledge of the processes on the shop floor.
- Management commitment–Indoctrinating the entire site into lean concepts, and incorporating the methodology into every project going forward.
