China Inc. Hits a Snag

Interesting piece by Mike Buetow over at Hot Wires. Sounds like China's beginning to taste the sweet nectar of letting corporations take care of their people instead of the government taking care of the people. There's apparently a new round of fees levied by China on MNCs doing business in China. Apparently this has caused hundreds of businesses to go under already with thousands more poised to go under as well.

Don't you just love having your manufacturing operation in the Wild Wild East. Now believe me, I personally feel that globalization in the long run is a good thing. It will be beneficial for humanity as a whole. But at the end of the day, if you're trying to find a good supplier to make your product or sub-assemblies, do you really want to have to think about and manage these types of things? You are in the states, your customers are in the states, why not have your products manufactured in the states. Deal with an operation that's easy to get along with and speakers your language, both figuratively and literally. It's not anti-globalization, it's just good business.

Why we left our factories in China

Why we left our factories in China Here's a feel good story for your weekend. Sleek Audio, maker of customizable earphones, recently moved most of their manufacturing back to the United States from China. I like the phrase they use "reshoring". Fortune has the article so click the link to learn more.

I'm seeing more and more of this. OEM's are getting fed up with the hassles of dealing with a factory many many miles away. Even with the flattening of the world, it's still difficult for a relatively small company to manage their manufacturing operation when they are so far away. And even then, who are you dealing with at your contract manufacturer. Probably the fabled "account manager", who speaks the English language, but doesn't communicate all that well, and can't even get you answers because the rest of the group won't be in until 2AM your time. Give me a break!

We need next generation manufacturers. Companies that will step up and compete and offer you real service. When you call Worthington Assembly, you get Neil Scanlon, the company's president. Something tells me your "account manager" won't be able to help you quite as well.

Apple's Invisible Advantage

Apple's Invisible Advantage  

 

 

 

 

Some brilliant writing from the guy who originally named the "iMac", Ken Segall. He points out some very interesting things about how Apple does business. For instance...

 

 

I had the pleasure of working on the “Making Of” video for the Cube, which appeared on apple.com when the store was first opened. That video called out the extraordinary effort that went into procuring the quality components necessary to create this store: the stone flooring from Sicily, the stainless steel surfaces from Tokyo, and the glass staircase and cube structure from Germany.

Apple doesn’t expect a single visitor to the Fifth Avenue Cube to think much about the floor they’re walking on. What they’re trying to do is create an overall feeling — that this is a place where people care about design and quality.

Apple's message to customers is loud and clear. They repeat it often. They want to make products that they would absolutely love to use themselves. They really care about what they build and how it's perceived. So they go to great lengths to make sure their customers perceive it the same way they do.

Are you getting the message across to your customers that you really care about what you're doing? What is your Italian stone and Japanese stainless steel? Do you have a cohesive message you're sending with everything you do?

What's Happening to U.S. Manufacturing

What's Happening to U.S. Manufacturing Interesting article by Michele Nash on The Huffington Post. It's well written and has some rather depressing statistics about American manufacturing. But I wish she had spent more time speaking about what to do about it.

Honestly, it's not easy. There's not a very good answer. And I suspect it would take many good answers to fix the very real issues American faces in the manufacturing sector.

I think a return to boutique manufacturing is probably one of the better answers. What do I mean by boutique manufacturing? Basically, take our friend the blacksmith as an example. He did not have huge volumes of product that he pushed out constantly. He was a craftsman. He was careful about what he produced and what he produced was often of the highest quality, but it took him a long time. Now mix his craftsman style with yesteryears high volume manufacturers, and you get something like us. A boutique manufacturer or a "Next Generation Manufacturer" as we like to call ourselves. We're available, local, competitive, and interested in making a piece of jewelry, so to speak, with everything we ship. We will do this with great skill and care like a blacksmith, but with high efficiency and speed like a volume manufacturer, by utilizing modern robotics. Many of these modern robotic pieces of equipment would never have been possible to build in the era that all of the big companies were moving their manufacturing offshore. Had they stuck it out for 5-10 years, I think we might be seeing a very different manufacturing sector today. But I digress...

We're manufacturing, and we're growing. We're staying here in the US. Our interest is in providing jobs for people and showing these big guys that it can be done. They just have to try and not make lame excuses for why they want to outsource.

Defining Quality

Defining Quality How can you make something more perfect? What if Apple said "You know what would make the iPhone more perfect? A stylus!"

Truth is, there is an international standards body that defines product build quality. In our industry it's called the IPC. They have 3 classes of product build quality. Class 3 being the highest. WAi pretty much doesn't ship anything under Class 3. We guarantee our work to Class 2, but really nearly everything we ship exceeds Class 3 specs. So what's going to differentiate us to our customers? That's the secret sauce.

We can ship Class 3 product to our customers every day. But if we're shipping 3 weeks late, do you think our customers will be pleased? We can ship Class 3 product but if they're packaged in non-ESD safe materials, do you think our customers will be pleased? We can ship Class 3 product but if we never answered the phone, do you think our customers would be pleased?

It's much easier to measure product build quality, but at the end of the day, that's not a very good definition of quality.

We've Become a Nation of Takers, Not Makers

We've Become a Nation of Takers, Not Makers Great piece by Stephen Moore of The Wall Street Journal. He brings up some amazing statistics about the number of people working for the United States government compared to manufacturing workers. In fact he even goes so far as to show that there are more people working for the government than work for manufacturing, fishing, mining, farming, utilities, forestry and construction... combined!

Here's a choice quote

When 23-year-olds aren't willing to take career risks, we have a real problem on our hands. Sadly, we could end up with a generation of Americans who want to work at the Department of Motor Vehicles.

Frightening.

Is a return to 'Made in the USA' Possible?

Is a return to 'Made in the USA' Possible? Eric has some interesting thoughts here. He lays out the challenges that could get in the way of American manufacturing becoming prolific again. He misses a couple points but this one stood out the most for me.

Electronics component supply base: Houston, we have a problem...

Oh yeah. We have a problem. He points out that China controls 80% of the supply chain. That's why often times it may seem so much less expensive to manufacture in China, because they have all of the parts. But we're finding that there are much higher costs to OEM's that never get weighed evenly. Risk!

Foxconn to replace workers with 1 million robots

Big surprise here. I continue to make the point that American manufacturing did not get outsourced simply because China is "less expensive". Maybe if you just look at a number on a spreadsheet they look less expensive, but if you take into consideration the IP battle you'll have on your hands, outsourcing to the wild wild east is not such a great idea. Domestic manufacturers can be just as efficient and the proof in my opinion is in this report. Even the world's largest electronics manufacturer is resorting to robotic manufacturing more and more, despite how inexpensive Chinese labor is. Clearly, if it's more cost effective for the Chinese to use robots, then it would be more cost effective for domestics to use robots.
Don't outsource to China simply because the number on the spreadsheet is cheaper. Look at the total cost.

National Governors Association Annual Meeting, Thomas Friedman Remarks

http://www.c-spanvideo.org/program/MeetingClo Thomas Friedman, 3 time Pulitzer Prize winning journalist, spoke at the recent National Governors Association Annual Meeting in Salt Lake City. His book The World Is Flat is required reading. Amazon link: The World Is Flat 3.0: A Brief History of the Twenty-first CenturyInternational Relations Books)

He makes a lot of points and the video of his speech is an absolute must watch. But I'm going to focus on one of his points. We need to be better.

It's not good enough to just show up anymore. You cannot continue to remain average. Average businesses, average non-profits, average employees. You need to be above average. You're not competing with the company in the next town that does the same thing you do. You're competing with the company in China, in India, in Indonesia, that does the same thing you do. And we feel that here very strongly. For goodness sake, we're an electronics manufacturer. Ever heard of Foxconn before? Yeah that Foxconn. The one that employs nearly 1,000,000 workers and provides manufacturing services for Apple, Dell, HP, just about any consumer electronics companies you can imagine. 20 years ago, if you wanted to have a circuit board manufactured, it wasn't very easy. You either had to do it yourself, which takes a huge capital investment, or hire a contract manufacturer. And how did you find them? A business listing in your local area. How about today? How would you find a contract manufacturer today? Google. You'd type in "contract manufacturer" and get 2.52 million results. Worthington Assembly is one tiny little itsy bitsy result in all of those 2.52 million results. So no, we cannot be average anymore.

What exactly does that take? Creativity. We employee extremely creative people. They might just not realize it yet. Or maybe we've done a poor job of letting their creativity blossom. As we've learned from the Mass MEP, we need to empower our workforce. Allow them to be creative and come up with the best ideas that we could never think of on our own.

We're not sitting down. We are not standing by idly or waiting for Washington to fix our problems. We're taking action and making a difference. We are going to have an impact. We are going to show people how it's done.

ISO 9001: 2008 an update

WAi is well on their way to becoming ISO 9001: 2008 registered. We had a visit today from our consultant (who is awesome by the way) and he helped push us over the edge to really get the ball rolling. We even conducted our first audit and filled out our Management Review minutes. We're well on our way. ISO is going to be a great help to us. It will ensure that we're providing our customers a quality product, on time, at a competitive price. This is something we've always done but now we have an international standards body proving that we are indeed providing such a service. We know this will help grow our business, make our current customers more comfortable, and open up a door for future customers.

Give and Get

Give and Get Seth is a master at explaining things clearly. I agree with him fully. It's the age old saying "There is more happiness in giving than there is in receiving." In the business sense, empowering your employees and giving them the tools they need to be successful will be far more rewarding than doing the exact same thing but with your top down direction.

For example, say you have options A, B, and C. If your employees come up with B as being the best option on their own, they will work that much harder at making sure option B works because they've invested into it. Whereas, if you realized on your own that option B is the best option, and then dictate to your employees, you will not be as successful as when your employees come up with the answer on their own.

People will make the wrong decisions sometimes. But things don't have to be permanent. If your employees chose option C, they will likely realize that was the wrong option and reevaluate, especially with good management and direction, which you're working hard at, right?

Have Morals

What makes Apple really, really different Interesting take on what makes Apple really different from their competitors. But what I find most interesting about Ken's article is that he points to having morals as what makes them really different. He's not saying that Apple has "good" morals or "bad" morals, in the theocratic sense, he's saying they have morals, or standards if you will, that they operate by. And these morals build brand loyalty. It's a great read and worth thinking about when it comes to the decisions we all make in business.

New Website

WAi has a new website. We've been working pretty hard at this over the past few weeks. Our goal with the website was to keep it very simple. We want to make sure our visitors are not distracted by too much stuff like so many other websites. We wanted our visitors to see exactly what we do, right away. So when you navigate to our homepage the first thing you'll see are example of circuit boards that we have built and a description of the type of technology involved in their design and manufacture. This should make it clear right away what it is that we do and not distract.

Secondly, we wanted to say something about the type of businesses we are. So right below the pictures of products we have a History page, an About page, and a Future page. These pages are about our business, where we came from, who we are, and where we're headed, respectively. These pages will change, because we will change as a business.

Finally, up top we have a listing of different categories of our website. You'll see the 3 pages mentioned before, a contact page, a link to our blog as well as a link to the various technologies we work with. These pages will expand in the future. Our goal is to keep things very simple but give enough information so that anybody finding us from a search engine or a referral will have confidence that they can contact us for their manufacturing needs.

We built this website entirely by ourselves. We signed up with a server host, bought a website theme, and built it from that foundation. It was really very easy and if you, dear reader, have any questions, don't hesitate to contact us using our contact page!

Lean Works: II

America's Scrappiest Carmaker Just read this article from Business Week. Hard to believe that an automotive manufacturer can elminate 98% of its physical waste. Great read though. My favorite quote from the article...

SIA workers get bonuses (grand prize: a new Subaru Legacy) for pointing out excess packaging and processes that can be cut from the assembly line and then rebated by suppliers. All the savings are effectively plowed back into plant operations—and overtime.

 

Shun Fujimoto

Shun Fujimoto is the personification of delivering results while enduring the pain. Although Mr. Fujimoto had recently broken his leg and was given a full leg cast from his hip down to his toe, he did not back out of the 1976 Olympics. Rather than waiting 4 years and hoping to compete in 1980, he pushed through and endured the pain. His performance was so remarkable and inspiring, that his team went one to win their gold medal. [youtube http://www.youtube.com/watch?v=Gq-C5-vIim8]

The pain when I landed was terrible. It brought tears to my eyes. But I did it. I got my gold medal, and now the pain is gone.

Hopefully none of us will ever have a serious leg injury like Mr. Fujimoto but many of us endure what seems painful every single day. If you're working on a difficult problem at work and think it might be better to just give up on it, remember Shun Fujimoto.

 

5S - II: Selective Soldering Station

We've begun our processes of applying the 5S principles to our entire factory. We're going to take this slow and be methodical about implementing 5S. To begin with, we started at our selective soldering station. This was an obvious fit because things had gotten out of control, as you can see in this picture. Selective Soldering Station - Before

 

This was in the middle of a changeover, so normally it's not quite so messy, but it makes for a nice dramatic picture. Either way, it certainly wasn't very organized. So we applied the 5S principals. Which are Sort, Set in order, Shine, Standardize, and Sustain. We began with Sort. This basically required us removing everything from the workstation and setting it aside so that we could Shine. Here's a picture in process.

Selective Soldering Station - In Process

As you can see we completely removed every item from the workstation and you can see the glisten that remains from having washed down the bench really well. You can also see our pegboard that we're about to use to make a shadow board. We mounted the pegboard to the bench and hung all of the tools necessary for this workstation. Once we were happy with our layout we went ahead, traced out each tool, and colored in each area to create a shadow of where each tool belongs. Here's a picture of the result

Selective Soldering Station - After

And in the following picture you can see exactly what happens when one tool is being used.

Selective Soldering Station - Shadow

As you can see, the hot gloves have been removed and their shadow remains on the board, telling the operator exactly what's missing and where it belongs. This is going to save our operators an enormous amount of time. Now they'll have access to all of their necessary tools without having to search for them, and they'll be able to keep their area nice and clean without hardly any effort at all.

This is really exciting stuff for us here at WAi. We're going to go ahead and standardize this type of setup for all of our operations. Surface Mount Technology, SMT Inspection, Automated Thru-Hole Insertion, Hand Insertion, Post Selective Soldering, Board Washing, Post Board Washing, Final Inspection and Shipping. We'll be sure to keep posting pictures and descriptions of our changes.

Selective Soldering Station