Factory of the Future

Background

  • This Division is part of a $6 billion electronics firm.
  • Designs and manufactures semiconductors for sale around the world.

Case for Action

  • Shift in customer base from being primarily in the US to Europe and Southeast Asia.
  • Intense global competition in two areas:
    • Price. This required finding a way to radically reduce the cost of producing product.
    • Customer Service. This required locating manufacturing facilities closer to customer locations.

The Approach

  • The Division’s response to this competitive pressure was to design a “factory of the future” which would produce a product at a cost that would be competitive for the next ten years.. The process followed was:
    • Feasibility Given a cost per unit goal, a special task force, assisted by PDL staff, designed a “macro” organization system that would meet that goal. The design included processes, organization structure, staffing and management system. This design was ruled to be “feasible” by Division management and the project moved to the design phase. Elapsed time for the feasibility phase was six weeks.
    • Design Detailed design of the facility was completed in six months.
    • Implementation Facility was built in Malaysia and concept implemented in 18 months.

The Results

  • New factory was world-wide leader.
  • Subsequently, a price war broke out in this segment of the semiconductor market. Had it not been for this new facility, this division would have gone out of business.