ACDi has successfully completed the migration of manufacturing from a local OEM into our state of the art electronics manufacturing facility in Frederick, MD. ACDi now builds all of the OEM’s printed circuit board assemblies (PCBAs), performs functional test and/or flying probe test on the PCBAs, assembles the boards into box level chassis products, performs top level calibration and functional test, and packages the products for shipment to the OEM’s customers.
The Challenge and the Solution:
One of the challenges facing ACDi was to execute a system that would efficiently manage the OEM’s highly configurable product line. The program consisted of close to 1000 different top level product configurations and over 200 PCBAs. ACDi quickly and successfully transferred the manufacturing programs by leveraging its experience in building high tech electronic products combined with the transfer of several of the OEM’s key employees.
ACDi took over the OEM’s raw component inventory, establishing a segregated inventory location. Inventory management has been critical to the success of this program. Many of the components, especially the optics, have up to 13 week lead-times, but the OEM’s customers typically need the products within 2-4 weeks. To ensure an uninterrupted and flexible supply of components, ACDi designed a Kanban replenishment program for key long lead components and key printed circuit board assemblies. ACDi updates the Kanban parameters on an ongoing basis as required, and conducts in-depth formal program reviews with the OEM every six months. We review product demand patterns and forecasts along with any changes in component lead-times in order to optimize the Kanban parameters. The Kanban program has allowed ACDi in many cases to assemble, test and ship emergency orders on a 1 day turn.
Ensuring Ongoing Performance
During the transition phase and for several months afterward, ACDi held daily internal executive reviews with our team to monitor progress and to ensure that we were on track to meet our delivery schedules. ACDi continues to host monthly teleconferences with the OEM to review metrics on quality, lead-time, and delivery performance, and to review the status of any new programs.
The Results:
The OEM has been very pleased with ACDi’s performance of 100% on-time delivery and excellent quality, the cost savings resulting from the transfer, and the reduction in inventory.