Best Practices in Lean Six Sigma Process Improvement: A Deeper Look

Chapter 19. Electronics: A Metamorphosis

Like the caterpillar that could only crawl until it took wing as a butterfly, electronics manufacturing is experiencing metamorphosis. Emergent from the cocoon is the new, high-flying electronic manufacturing services (EMS) subsector. Being freed of that burden has in turn transformed the OEMs into nimble overlords able to concentrate energies on rapid development of products and advances in process management. These sweeping changes began in U.S. electronics but are global today. In discussing those changes, the chapter begins with supporting leanness data, and then details the rise of the EMS subsector. A third section presents a few of the industry's trendsetters. A final topic concerns risk: how a small, unexpected event in this highly outsourced, globalized industry can trigger large-scale change in the competitive order.

ELECTRONICS—EARLY 1980S TO THE PRESENT

U.S. electronics, on its death bed in the early 1980s, was again global leader by about 1994. In but a decade, the likes of IBM, Motorola, Hewlett-Packard, Honeywell, Data General, and Digital Equipment Corp. had matched—no, outmatched—Japanese giants such as Hitachi, Sony, NEC, Fujitsu, Sanyo, and Toshiba. They did so, in part, through application of process-improvement methods that originated in Japan: JIT, total quality control, empowerment, supplier partnership, and so on. The U.S. group gained further mileage from an even more potent, western-grown improvement methodology: design ...