Case 2

AIC Netbooks: Optimizing

product assembly

Presented by:
Sakshi Jain
Sadhana Kharol
Prerna Sharma
Background Of Case
 Advanced Integrated Circuitry
 Founded in Taichung, Taiwan in 1992
 Producer of Printed circuit boards, Motherboards &
Graphic cards
 Supplier are Dell, Compaq &Hewlett-Packard
 2000: Evolved Original Design Manufacturing
 2001: Shifted all production in china
 2007: Enters Consumer Electronic Market
Factory Setup
• Total 4 Assembly lines
• 1 Assembly line = 16 mtr.
• 1 Shift = 8 hrs(excluding 1 hr. beak)
• A day =16 hrs, a week =96 hrs
• Each line produced 700 units per shift
• A day =1400 units, a week =8400 units
Good Practices
 High Focus on Cost Management
 Avoided “me to” product & encouraged them to
introduce an “atom processor” based netbooks
 Giving ownership over all steps
 Shifted Unit to China which gave lower labour cost
 Burn in test before packaging to shipment
 Double check process
 Encourages Kaizen Approach
 POKA-YOKE Process
 Strategically Delayed the Production so as to have
technological edge
Bad Practices
 Some non-standard operations crept into the assembly
process. E.g.: Webcam cable requirement
 The pressure to maintain output levels led supervisors
in addressing the immediate problems without fixing
the root cause
 Unsanctioned buffer inventories were accumulated
between stations
 No new hiring despite requirement
 Supervisors were often engaged in “FireFighting”
 Problems
 Unsanctioned buffer inventories
 Inconsistent Demand
 How to improve productivity of existing capacity
 Increasing shifts to 10 or 12 hours was not sustainable
 CSO unwilling to invest on 3rd shift workers
 Pressure from corporate office to improve current
performance and boost Gross Margin
 Variance in labour efficiency
 kaizen meetings led to supervisors fire-fighting to look
for quick fixes to maintain output levels
 Solutions
 Should hire more workers to increase the shift from
two to three.
 Shifts should be of 8 hrs each(including 1 hr of lunch
break)
-Number of units in 1 hour = 3600/50 * 4 = 288
- Number of units per shift = 288 * 7 = 2,016
-Number of Units per day = 2,016 * 3 = 6,048
-Number of Units per week = 6,048 * 6 = 36,288
-Number of Units per month = 1,45,152
-Thus, even with the three 7 working hour shifts, we can
produce well above the expected demand of 1,30,000
Netbooks per month.
THANK YOU