Achieving expected Takt Time in volume manufacturing Background Flextronics is one of several worldwide companies that provide assembly and test operations to manufacturers who prefer to outsource those activities.
Flextronics, offers services in several locations around the world that are strategically located for optimization of; skilled labor, low overhead, easy transport of goods, favorable customs regulations, minimal environmental impact requirements, highly available utilities, and reasonable salaries.
Companies that contract with Flextronics do so based on a 'quote' or a 'bid'. It is up to Flextronics to figure out how to optimize their own profit based on the work that they have agreed to accomplish. Assembly and Test contracts have a number of T's & C's (Terms & Conditions) that have to be met.
Each short term contract is driven from a standard template, however; there are usually deviations to the template since new products tend to require new assembly methods. Flextronics has the responsibility to their customer to deliver a specified quantity of product on time, which may be so many per week or a single batch on a certain date. They have the responsibly to constrain their charges to the customer based on the price agreed to in the contract.
They also have a responsibility to meet an expected AQL (Acceptable Quality Level) which specifies the number of failed units per 1000 items delivered.
Assignment - Read the case to get an understanding of the issues that impact the options for Flextronics.
- Describe the different options that Flextronics tried in order to find a workable solution.
- In your own words, describe the benefits and disadvantages of each option the Flextronics team tried.
- What were the factors that had to be evaluated for each option?
- Indicate if you think that costs went up or down for the factors you named from their options?
Note: this cannot be done for their first option since no predecessor information is provided.
- What would you suggest to Flextronics if their AQL dropped below their customer's acceptance limit?
Submit your paper as either a Microsoft Word file or as a pdf file.