Ein Standort in China Die Chance Low Cost ergreifen, das Risiko Low Quality managen

Transcription

1 Ein Standort in China Die Chance Low Cost ergreifen, das Risiko Low Quality managen A Site in China Seizing the Opportunity Low Cost, Managing the Risk Low Quality Ernst Müllner Vice President & General Manager Sound Solutions NXP Semiconductors 5. Juni 2008

2 Introduction 2

3 NXP Semiconductors Established in 2006 (formerly a division of Philips) Headquarters: Eindhoven, The Netherlands Builds on a heritage of 50+ years of experience in semiconductors Provides engineers and designers with semiconductors and software that deliver better sensory experiences Multinational workforce ( employees) Top-10 supplier with Sales of USD 6.3 billion in 2007 Key focus areas: (Business Units) Mobile & Personal (brought into JV with STM) Home Automotive & Identification Multimarket Semiconductors Owner of NXP Software: a fully independent software solutions company 3

4 Business Line Sound Solutions Acoustic competence since 1929 Global market & technology leader in acoustic solutions for telecom devices # 1 in dynamic speakers & receivers for cell phones First to market with major innovations Innovative sound accessory products stereo in-ear headphones ultra-thin sound panels for mobile audio enhancement 4

5 Sound Solutions Key Facts Global headquarter in Vienna Manufacturing daughter in Beijing Fully automated production Strong subcontracting base in Ukraine and China Global sales force and local application support Key data 2007 EUR ~ 200 million sales 550 million speaker produced 20 million headsets and sound panels produced 1050 employees ~ 30 industrial customers 5

6 Path to Business Excellence Application for Austrian Quality Award EFQM Finalist, OHSAS 3. EFQM Self assessment 2005 DFSS 2004 ISO TS Vienna 2003 Six Sigma approach 2003 ISO TS Beijing 2002 Austrian Quality Award Winner 2001 Austrian Quality Award Finalist EFQM Self assessment, ISO EFQM Self assessment 1998 EFQM Assessor Training for Management 1997 PQA 90 Award, Re-design of Management System 1996 Peer-Assessments PQA 90, Train the trainer training for Management 1995 Continuous Improvement, Self assessment PQA 90, Merkur Award 1994 ISO 9001 Certification Early 90th Philips Quality (1988), PSS Credo (1990) 6

7 Industrial & Location Strategy 7

8 Basic Motivation to go to China End of the 1990 ies following trends were visible Fast growing Chinese and far east market Many mobile phone manufacturers settled in China (especially in the Beijing area) Growing local Chinese customer base Local content requirements Customers asked for risk sharing (by creating another location) Structural cost reductions and logistic improvements Labour costs Save supply chain costs Reduce lead-times Foundation of Sound Solutions Beijing Decision taken in February 2000 Factory opened in May 2001 Starting with only one product (13mm speaker) 8

9 Locations Regional Headquarters / Production Subcontractor / Partner BL Sound Solutions Vienna: Global Headquarter & Competence Center Ramp up organization of new products R&D Center, Test Center, Application Support Fully automated production, transfer of mature machinery to Beijing 500 highly trained & educated employees HAMBURG COLUMBIA ORLY VIENNA MUKATCHEVO BEIJING ZHONGSHAN TOKYO TAIPEI SHENZEN DONGGUAN BL Sound Solutions Beijing Wholly foreign owned enterprise Local R&D, Sales & Application Support Fully automated production 550 highly trained & educated employees Subcontractor Ukraine Semi-automated production & ramp up of new products Small and mid volume customized products Around 1000 employees Subcontractor Base China Manual & Semi-automated assembly of add-on & high diversity products and headsets Around 3000 employees 9

10 Business Segments Role of Sound Solutions Beijing High Diversity Products High Volume Products Portable Sound Devices Role of Beijing: Business ownership in accordance with Vienna Role of Beijing: Take over mature Role of Beijing: Steer subcontractor Product management, R&D, Sales in house Manufacturing at subcontractor Everything is covered in house with focus on our core competencies Product management, R&D, sales in house R&D products Low cost Volume & flexibility Operational mgmt. Manufacturing at subcontractor 10

11 Take the Chance Low Cost 11

12 Cost Aspects China Costs were not the main reasons for us to go to China with our highly mechanized manufacturing concept (due to low labour content of our products) Labour cost ratio Beijing / Vienna for a line engineer: 1:10, labour cost ratio for local management: 1:5 Lower infrastructure, maintenance & spare part costs; cost savings due to local supplier base, reduced costs for transport & logistics High costs for expatriate management and specialists But: Grab opportunities by use of specific chances of a Chinese location Creating a new business model: customized and locally developed products (High Diversity Products) and Headsets produced with local Chinese subcontracting partners Labour cost ratio for direct (manual) labour: 1:30 Continuously improve concepts and adapt business model due to rapidly rising labour costs in China (> + 10% per year) Look for new locations within and outside China Continuously improve efficiency Cost savings in product design and concept 12

13 Avoid and Manage Risk Low Quality 13

14 Quality: What we found in China Chinese Quality culture Quality definitely is an issue: large Q-organisations, high inspection culture (incoming inspections), But: Low analysis know-how and improvement experience ( reaction instead of prevention ) High knowledge in methodology, but low experience in application and interpretation Process thinking not developed Lack of Zero Defect attitude Hierarchical barriers Low environmental and technical standards Speed Fast reaction and response times High flexibility, even proactive fulfilment of requests Hands on approach No problem culture High willingness to learn 14

15 How to manage Quality Risks Two main prepositions: 1. No compromises from the start World Class quality from the first minute Absolute priority for quality First manage quality, then costs (it goes hand in hand good quality finally saves cost) 2. Create an approach compatible with the Chinese (Quality) culture Not only show where to go (from A to B) Also explain in detail how to go (describe the way from A to B) 15

16 How to manage Quality Risks: Structural approach Copy & Paste Set up a copy of the Vienna factory in respect with: Same manufacturing concept Same business processes, standards & structures Organisational setup with clear interfaces and responsibilities Plug & Play Reduce complexity (start with only one product) Only transfer of mature technologies and well engineered equipment Start with concentration on our own key competences At the beginning: Use of local competences for peripheral functions (F&C, HRM, IT, Facility Management, contacts to local authorities) Clear structure No joint venture to avoid unnecessary interfaces / interferences 16

17 How to manage Quality Risks: Preparation Get familiar with Chinese culture and specifics Learn what to expect Common learning: invite Chinese key persons to Vienna for some months Learn from other organisations Make use of informal contacts and existing networks Management structure Establish an widely Austrian Management team in China Install experienced specialists in all levels of operation Prepare for stable structures (and long term habitation) Project management & planning Realize transfer as a project: Project team, schedules, targets Training for all involved people Professional support SWOT, risk & contingency management 17

18 How to manage Quality Risks: Daily Operations Quality Management: Set up Management System: ISO 9001, (both in 2001; 3 months after factory opening), ISO TS (2003), OHSAS (2003) Introduce Quality tools (pre-control charts, control plan, test & process instructions, audits, release procedures, regular housekeeping audits) But also: Allow for local Quality culture (central Q-organisation, incoming inspections, large testing lots, ) Quality Improvement: Promote improvement culture: Info shops, CIP, visualisation of costs of non quality (in terms of: value of a mid class car Bonus model driven by Quality level; Quality competition Benchmarking between sites Continuity in staff manage employee turnover 18

19 How to manage Quality Risks: Supplier Quality Strategic supplier selection Consider competence profile, capabilities, strategic fit, cost level, level of co-operation, Strong local support organisation Offer common Quality training and improvement projects Give support in daily business Continuous maintenance of relations Early supplier involvement Include suppliers already in product creation process Give feedback and recognition Operative supplier rating, strategic feedback Supplier day, supplier awards Supplier development program Free consultancy in business economics, industrial engineering, cost management, organisation & efficiency Share savings and benefits out of this program 19

20 Results 20

21 Results Sound Sound Solutions Beijing Business Growth: Quantities Quantities in M Actual Target Business growth: Continuously growing production quantities Business Growth Starting with 1 product, 2 High Volume lines Now: 5 product groups 20 High Volume lines & 17 manual lines Number of manufacturing lines Business Growth: Manufacturing Lines Actual Target High performance rectangular lines Auto Lines (round shaped) Manual lines 21

22 Results Sound Sound Solutions Beijing Field Call Rate development FCR actual Target Supplier qualtity number of complaints continuously reduced Supplier Managemet: Complaints at local Chinese Suppliers Complaints per month FCR in ppm (floating average) High Volume ramp up, transfer of new lines Startup with new products (16mm, 8mm, High Diversity) Jan 2003 Apr 2003 Jul 2003 Oct 2003 Jan 2004 Apr 2004 Jul 2004 Oct 2004 Jan 2005 Apr 2005 Jul 2005 Oct 2005 Jan 2006 Apr 2006 Jul 2006 Oct 2006 Jan 2007 Apr 2007 Jul 2007 Oct 2007 Jan 2008 Apr 2008 Product quality Reduction of field call rate Bring FCR down after every change in business environment

23 Example for Positive Supplier Development South Chinese Magnet supplier: Previous status New status (2005): New equipment Better tolerances Improved tidiness & working conditions Reduced product cost price 23

24 BL Sound Solutions Beijing Path to Business Excellence SA8000 EFQM Planned Finalist AQA assessment 2007 Sony Ericsson TL9000 Green Certification Partner Cert 2007 EFQM Finalist 2006 ISO TS16949 certification PBE Peer audit Corporate Risk Assessment OHSAS Certification Corporate ICS Audit based on SOX PBE Self-Assessment ISO/TS16949 Certification PBE Self-Assessment PQA 90 Award ISO 9001:2000 & ISO Certification PSS Beijing Mass Production Start 24

25 Thank you for your Attention!