Solectron: from Contract Manufacturer to Global Supply Chain Integrator

Solectron: From Contract Manufacturer to Global Supply Chain Integrator

Statement of the Problem

Main Problem:

Unexpected economic downfall which lead to small amount of demand in various industry (e.g. Telecommunication).

Sub Problem:

Over capacity of production.

Excess supply or excess inventory

Areas of Consideration

Solectron as an Electronics Manufacturing Services Industry.

Electronics manufacturing services industry grew out of a large number of small job shops that manufactured assemblies for clients. OEM (Original Equipments Manufacturers) would sometimes the EMS shops to provide their own production needs. When personal computer rise and was mass marketed in the late 1980, led by SCI, It drove related market for PC such as printers and memory devices.

The rapid growth of PC, printers and memory devices was also pushed through the development of networking devices (internet) that led to the production requirements of routers and servers.

In the late 2000, EMS industry was estimated to be $103 billion or about 13% of the total cost of goods sold of OEM companies. The market penetration was positively forecasted for the next 5 years and the compounded annual growth for this industry was positively appreciated. One of the companies that has large production of EMS was the Solectron, also included the SCI Systems, Flextronics, Plexus and Jabil Circuits et. Al.

Solectron Corporation

Founded in 1977, a company that produces solar energy products.

The company had a financial problems in the mid-1970’s and because of that they were pushed to build assemblies, especially for printed circuit boards for other electronics.

In the 1980 the Solectron company focuses on contract manufacturing since they saw a vast potential clients for the manufacturing services.

Solectron PCB job shop business was converted into an important industry that provides high quality electronics manufacturing services.

From that, the company now focuses on their...