Solectron: From Contract Manufacturer to Global Supply Chain Integrator Background Solectron Corporation is but another classic case of a company that benefited immensely from the dot.com boom, only to experience the pains of the bust as the dot.com companies went down in the early 2000s. From its humble beginnings in Milpitas, CA as a solar energy products manufacturer, Solectron grew to be a highly successful global supply chain integrator with revenues of $18.6 billion by 2001. From the
former small subassembly companies, were hardly known a decade ago. In the year 2001, the biggest firm had annual revenues of more than $ 15 billion. Market concentration has been developing rapidly with five companies of North American origin (Solectron, Flextronics, SCI, Celestica and Jabil Circuits) emerging as the key players. The names of these companies are unfamiliar even to many insiders, since CM-providers do not post their brand name on any product. The Los Angeles Times, therefore, called
to convince executives who literally had never seen a down quarter that everything was fine. But some Cisco suppliers were not so sanguine. "People see a shortage and intuitively they forecast higher," says Ajay Shah, CEO of Silicon Valley-based Solectron Technology Solutions Business Unit, a company that manufactures parts for the networking industry and for Cisco. "Salespeople don’t want to be caught without supply, so they make sure they have supply by forecasting more sales than they expect,"
their manufacturing to Solectron Corporation, where I was a summer intern. By partnering with Solectron, OEMs can gain access to the latest equipment, process knowledge, and manufacturing expertise without making substantial capital investments. In essence, outsourcing to Solectron enables OEMs to focus on their core competencies of research and development and sales and marketing. OEMs have found that the benefits they have gained from outsourcing their manufacturing to Solectron could also be acquired
fantastic result right from invention and statistics still indicate that it is still high on demand. While the competitors companies who outsource a whole production as well as management of the supply chain to third-party firms like the Flextronics and Solectron, Apple has a strategy to work hand in hand with its suppliers. For instance, the Apple engineers work closely with suppliers in updating the manufacturing processes and technology as in the designing of MacBook’s unibody shell. According to Jessica
how the OFCCP works is in the case of Aaron Woodson, an African American. He applied for a job at Solectron Corporation, but did not get the job. He was a qualified applicant, but there may have been a better one. When the reports were analyzes, the OFCCP decided that the company had “a low percentage of minority workers compared to other similar companies in the area.” At the end of the case, Solectron offered jobs to the nine qualified minority applicants, payment totaling $237,000, and a promise
place in the industry, they can create value by using contract manufacturers. These companies do everything but assemble the final PC and allow Original Equipment Manufacturers to cut costs and minimize risk. Contract manufacturers like Flextronics, Solectron, Hon Hai, Precision Industry and Quanta deal with the complex component supply chains and allow hardware companies to focus their efforts on advertising and selling the product3 III. Analysis of Industry Forces Within the Computer Hardware Industry
Michael and Brian made a decision to state that the write-off was reasonable. They had no evidence yet made these conclusions anyway. Also, when it came to performing additional procedures to check why shipments were never received by CMD’s customer, Solectron, Inc., they were also just brushed under the table. There was no evidence that the two auditors had ever made an attempt to look for evidence such as purchase orders. Brian and Michael have faced many instances where such actions should have been
QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 39 Strategic Planning and Deployment at Solectron • • Compare Solectron’s approach to the generic strategic planning process described in this chapter. What are some of its unique features? Explain how the hoshin planning process aligns site plans with corporate strategies. Why is this alignment especially important for a company such as Solectron? THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM 40 Teaching
Oakley, Director of International Operations, Jim Addison Andrew Corporation, Director – Global Logistics & Transport, James Lamb Hickory Farms, National Logistics Manager, Matt Alloway Agere, Director – Global Logistics & Compliance, Simon Powell Solectron, Senior Director - Global Logistics Frederick Hartung Efficient day-to-day operations – What are the secrets to establishing a successful working relationship with your 3PL provider – clear instructions, good communication and sensible expectations