Case studyIpexCo

Backgroundtothedesignchain

IpexCoisahigh-techelectronicsmanufacturersupplyingproductstooriginalequipmentmanufacturers(OEMs), who bundle these products with other products and services for end-customer supply. Giventhe structure of this industry there are very few, very large OEMs. We typically refer to this type ofsupplier(IpexCo)asa tier1supplier.

IpexCohadasignificantengineeringteamwhowereresponsibleforproductdesign.Engineeringworkedclosely with these OEM customers in product design and qualification and also with tier 2 and tier 3suppliers upstream who manufactured various components or parts and sub-assemblies that made upthe product. Initial prototypes were made in the engineering laboratories with materials procured byEngineering. The next stage was small scale production managed by a new product introduction (NPI)group within Operations. There were a number of resources in the NPI team - mainly ProjectManagement and Buying. The NPI group was responsible for ensuring the product could be produced involume and produced initial volumes for OEM customers. The process of getting information fromEngineering was difficult - one of these scenarios where the 'paperwork' lagged behind the activity ofdesign and supply. Different information systems used by each team did not help since Engineering used'Agile' astheirsystem of record; thishelddetailed specifications,butOperationsneededtheinformation on their SAP Enterprise Resource Planning (ERP) system in order to drive demand throughthesupplychain.

Thus product design (i.e. new product development - NPD) was largely the remit of Engineering andproduct launch (i.e. NPI) was largely the remit of the NPI team in Operations. Operations hadestablishedanAdvancedManufacturingOperations(AMO)tointroducenewproducts.Thisunithadacapacity to assemble about 50 units/day. Once customer demand ramped-up, manufacture was thentransferredto thelarge-scaleproductionorganization(capacity toassemble100sofunits/day).

Backgroundto thesupplychain

IpexCo employed a mix of own-production and contract manufacturing in supplying the products to itscustomers.Partsor componentsweresuppliedbywhatcouldbeconsideredastier3suppliers.Someofthese parts went to tier 2 suppliers for sub-assembly - either printed circuit board assembly (PCBA) ormechanical sub-assembly - and others directly to IpexCo for finished goods assembly. Hence a problemwith one part would have a domino impact throughout a rather interdependent and thus complicatedsupplychain.AsimplifiedschematicofIpexCo'ssupplychainis presentedin thefollowingdiagram.