September 22, 2010

Flextronics Plant in North Carolina Tour

Building Redbox units in NC and how Flextronics plant does it.

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Flextronics plant uses Lean manufacturing to produce redbox kiosks

Burney Simpson editor
• 22 Sep 2010

Every one. Every single one.

International manufacturer Flextronics this May joined with its customer Coinstar to announce its manufacturing plant in Creedmoor, N.C., had built and shipped 25,000 redbox kiosks to locations all over North America. Since then the plant has built and shipped a couple of thousand more of the devices that had a hand in changing the way consumers obtained, paid for and returned movies and video games. And right around Labor Day redbox reported it had rented its 1 billionth DVD.

Most folks passing the Flextronics plant on Interstate 85 on the way to Raleigh-Durham International Airport probably don’t think twice about it, other than notice its size, nearly 300,000 square feet. It’s just off an unremarkable exit with gas stations, fast food joints and mini-malls.

But since 2005 the plant has been focused on building one redbox unit at a time with a single-minded devotion. The 250 employees led by general manager John Mainey use the Six Sigma Lean manufacturing techniques designed to cut waste, reduce excess effort, address defects and keep the assembly line moving. (A slide show of the plant is available.)

Mainey describes himself as a true believer in the Lean method.

He contends that American manufacturing declined as firms compared production costs in the United States with production costs in locales like China and Mexico, couldn’t see how to reduce spending — much of it related to labor — threw up their hands and said, ‘We’ll just send it overseas.’

Instead, manufacturers need to “apply Lean and eliminate waste. Recognize that labor is just one cost, and that they must be flexible. If we can do this, then manufacturing will stay here in the U.S.,” said Mainey.

The Creedmoor plant is one small part of Flextronics, a massive Electronics Manufacturing Services (EMS) firm based in Singapore with 160,000 employees in 30 countries. It generated more than $24 billion in revenues in fiscal 2010 from its work in five major divisions — computing, industrial, infrastructure, medical and mobile & consumer. Redbox and other self-service products fall under the industrial division.

In self-service, Flextronics offers hardware, software and industrial design; electrical and mechanical engineering; prototyping and manufacturing; logistics, support, and repair and refurbishment services. It has partnerships in financial bill pay, municipalities, retail, digital photo, ticketing, healthcare and advertising.

At Creedmoor, the production of each redbox is an exercise in reducing waste. The well-known box itself and much of the internal parts come from suppliers in the Raleigh-Durham metro area. The box comes painted its trademark red for most retail outlets and a royal blue for Walmart Stores.

Like many large-scale manufacturers, Creedmoor has adopted assembly practices developed in Japan. It uses the well-known ‘Just in Time’ approach to parts supply, along with Kanban, a ticketing method that tracks each part, from the box itself to every one-quarter inch screw, to better control flow. If you have one too few or one too many, you know you have a problem.

Parts come with a minimum of wrapping and boxing because “we would just have to unwrap it and throw it out anyway,” said Earnest Steinhoff, manager of operational excellence at the plant.

Creedmoor has its own language and lingo. The creation of the kiosk starts as a worker, dubbed a ‘water spider,’ visits the ‘supermarket’ of parts to be used, says Steinhoff. The spider goes ‘shopping’ to gather the parts and puts them on a cart for assembly.

rest of article and slideshowk

Posted by staff at September 22, 2010 09:54 AM