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How simplicity improves complexity

Industry analysis indicates a good chance that IC unit demand will continue to grow at least 10% annually over the next five to ten years, as applications in communications and consumer electronic systems continue to expand. Despite all these predictions and forecasts, the back-end and manufacturing side of the industry needs to cope with ever-changing demands. These unstable market cycles require innovative, clever and easy to handle management models to best economise working capital, as well as material needed. Martin Deflorin, Lean Manufacturing Program Manager at Oerlikon Esec discusses the Lean Manufacturing principle as a strategy to respond to these market challenges.

As a major company involved in high-tech innovation and back-end solutions, Oerlikon Esec has taken another step towards operational excellence. It implemented its first ‘Flow Production’ project in the module assembly area for the new Wire Bonder bondhead at its headquarters in Cham/Switzerland. In a second step, the individual workstations were completely redesigned based on the employee input. Overall process cycle times and work in progress were reduced by up to 50% and production capacity was doubled.

Flow production means that each workstation (see diagram A, steps 1-5) now, produces one unit at a time. When the unit is complete, it goes to the next workstation. Flow production thereby significantly reduces the overall work in process when taking into consideration all the workstations.

Another advantage naturally, is that when a problem does arise, it is immediately fixed before the unit is ‘allowed’ to be passed onto the next work station. This eliminates any re-work because only zero-defect goods are passed onto the next workstation. This flow production concept is complemented with a demand-driven pull production. Because the work flow for the assembly process was more efficiently organised, a lot less floor space was needed than before.

A valuable learning experience was the understanding of how the work in progress was being defined. With the previous batch processing approach, it turned out, that nine out of 10 units of work in progress, meant that nine units were actually ‘work in waiting’, since it was only possible to assemble one unit at a time anyway. So basically 90% of the work in progress was actually 90% of the goods waiting for the value-added work to be done. This meant working capital was tied up in work in process.


Involving the value chain
The next step for Oerlikon Esec will be to work together with its suppliers for the bondhead assembly to reduce inventories, so that the stock is
synchronised with the production work flow requirements. The Kanban system (a Japanese concept related to lean and pull production) will be introduced for C-parts and JIT for the high value A-parts.

After the initial transition to flow production, the employees got together and redesigned the layout of the individual work station. An important part of this process was to analyse access to the tools. In other words, where does a tool need to be stored in the workstation, so that it is easy to get to when needed to complete a given assembly procedure. Additionally, employees also had to determine where it made most sense to store needed parts. Employees now also have an area set aside nearby, so that they can experiment with new ideas to continually improve and make changes to their assembly stations as needed.

After successful implementation of flow production for the bondhead assembly site, Oerlikon Esec is currently implementing flow production concepts throughout its global assembly operations. In addition to offering its customer high-tech products, customers will also benefit from shorter delivery times in the future.


About Kanban

Kanban (Japanese, where ‘kan’ means visual and ‘ban’ means card or board) is a concept related to lean and just-in-time (JIT) production and is highly responsive to customers. Kanban does not necessarily replace all existing material flow systems within a facility. Other systems such as Materials Requirement Planning (MRP) and Reorder Point (ROP) may remain in operation.

Kanban is most beneficial when high volume/low value components are involved. For low volume and high value components, other materials management system may be a better option.

There is more to managing a JIT system than just Kanban and there is more to Kanban than just inventory management. For example, Kanban also involves industrial re-engineering. This means that production areas might be changed from locating machines by function, to creating ‘cells’ of equipment and employees.

The cells allow related products to be manufactured in a continuous flow. Kanban involves employees as team members who are responsible for specific work activities.

Teams and individuals are encouraged to participate in continuously improving the Kanban processes and the overall production process.

Kanban is often seen as a central element of lean manufacturing and is probably the most widely used type of ‘Pull’ signaling system.

There are two fundamentally different approaches to controlling how downstream activities signal their needs to upstream activities.

In Pull Production, authorisations to produce more (or replenish inventories of purchased materials) are based on the consumption of the material from controlled inventory locations. ‘Use one, make one’ is the simplest form of this method.

In Push Production, however, the authorisations to produce more or purchase more of an item are based on the anticipation of its use. A Push system attempts to predict when the item or material will be needed and launch authorisations in anticipation of this need.

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