Presentation By:

Group -8
Surbhi Priyadershani (44) Swarnim Lata(45) Swati Singh(46) Vivek ranjan(47) ranjan(47)

Background
One of the leading companies in the electronics manufacturing services industry (EMS). Started in 1977 as a contract manufacturer, but during the years it has been more and more concentrating on offering its customers supply chain integration related services. Its main business units were in 2001 Technology Solutions, Global Manufacturing and Global Services, supported by the Global Materials Services group; Number of employees is around 60.000. The company has always strongly emphasized the quality, as well as its corporate culture and values

Q 3. Solectron s corporate culture, and its overriding emphasis on quality, was an essential element of its success. Explain.  Company s culture emphasizes quality in every sense,  Favourable for both the customer and the employees.  On the success of the company The Malcolm Baldrige National Quality Award and successful day-to-day Practices was emphasizing on continual improvement.  Mission, vision, values and beliefs can be seen throughout the organization and in everyday practices as well.

.Contd
 Downturn of 2001 handled the situation in the systematic and value-driven way as it handled for example the acquisitions.  Remained quite optimistic for the long term,which is partly due to their culture

Quality: execute with excellence; drive to six-sigma capability in all key processes; exceed customer expectations

Q4.How did global expansion and technological developments

contribute to Solectrons ability to move from a contract manufacturing supplier to a supply chain integrator?

1990s, Solectron acquired many operations all over the world, and expanded
through acquisitions, Solectron (had) developed a global network of facilities located strategically close to its customers and to emerging markets.

Global expansion benefited the customers via lower costs and also via the proximity and thus the flexibility of production and distribution. Depending on the customers needs and its own location, Solectron can serve it more differentiated. If emphasis is on design and the efficiency in the product launch, Solectron has centres in Western countries, near the highly skilled labour pool and the end customer as well.

Q 5 Comment on the new business model of acquisitions that Solectron introduced in 1992. How did the company successfully integrate these acquisitions?

New Business Model:

Introduced in the year 1992. Purchased manufacturing sites from IBM. Repeated the model many times. Acquired manufacturing facilities from customers and used those for long term supply contracts.  This allowed for risk pooling, as fluctuating demands from different companies were smoothed and safety stock of common component were reduced.    

.Contd.
Before acquiring a company, Selectron used to consider the following things.
Companys culture & belief on respect for individual. Invested a lot of time, attention and effort in integrating the employees of acquired companies. an integration team to work with the acquired operation composed of four to eight people representing the major functional areas

Q6

How did Solectron change its organizational

structure to facilitate end-to-end supply chain management? Solectron

Technical Solutions

Global Manufacturing

Global Services

All the three business units were looked after by the

Global Materials Services group.

.contd.
Technical Provided modular & embeded systems design and manufacturing systems that gave OEM customers with technology building blocks that could be used to quickly get products to market. Built around Selectrons wholly owned subsidiaries, Force Computers and SMART Modular Computers. Global Manufacturing Provided manufacturing services to Selectrons customers. Global Services Offered product repair, upgrades and maintenance services through service centers worldwide.

Also, provided new product introduction services & pre manufacturing designs and prototypes.

Also, offered services such as warehousing, logistics, returns management, engineering change management and end-oflife management.

Examine the drivers that led to the difficult situation Solectron faced in 2001.

 Wrong Forecast
They estimated far more than, even the most optimistic scenario. The OEMs Pressure to meet their production demand. Solectrons Consumer First belief further worsened the situation. 

Economy meltdown
Late 2000 & Early 2001, demand started to fall. Important customers like Telecommunications. Orders fall from $6.5 billion --> $2.1 billion.

Increase in inventory levels

Received orders from 4000 suppliers of Solectron. Inventory rose by $ 1 billion.

Comment on the short term and long term measures that the company took during the business downturn of 2001. What measures would you have taken in the same situation?

 Short term measures Restructuring

    Workforce reductions Facility Closures SMT lines reduced from 1100 to less than 700 Reduction in Floor space

 Long term measures

 Outsourcing will accelerate
 Concentration of businesses in small numbers of large suppliers.  Dramatic growth in Asia, Central & Eastern Europe.

What measures would you have taken in the same situation?

 Benching instead of lay- offs.

Reduction in the basic pay of the employees.

 As business is expected to grow

Rehiring & training will cost to the company dearly.

Thank You