OEMs are ready to embrace Lean Manufacturing after the 2001 recession, but traditional approaches were designed for vertically integrated enterprises. The answer to their problem? Extended Lean and Statistical Kanban.
The electronics manufacturing industry has changed dramatically during the past 20 years. Two decades ago, most computer and telecommunications original equipment manufacturers (OEMs) were vertically integrated companies with design, manufacturing, assembly, sales, marketing, service and repair under the same roof. A small community of outsourcers found work making and assembling printed circuit boards and other commodities for these industrial giants, often in small lots for prototype production runs.
Gradually, these tiny contract manufacturers (CMs) expanded their offerings to include more sophisticated multi-layer boards, flexible circuits, surface-mount packaging, and tape-automated bonding, while the OEMs concentrated on building complete systems.
By 1995, contract manufacturers like Solectron, Flextronics, Celestica (then an IBM subsidiary), Sanmina-SCI, and Jabil Circuits