Flextronics

Essay text:

In the 1990s, Solectron acquired its customers manufacturing facilities and established long term contracts. These facilities were used to produce more than one type of product. Facility utilization increased as various products were produced in the same shop. By 1994 yearly revenues were in excess of $1 billion. ? Solectron manufactured products for customers in the following business segments: ? Networking ? Telecommunications ? Computers ? Computer Peripherals ? Others 1. What value did Solectron provide to its customers, and how did it evolve over time? Value provided by Solectron • They provided high quality products to their customers • Technology solutions, which provided technology building bocks that helped customers minimize time to market for new products • Global manufacturing, which provided design, new product induction, and manufacturing and distribution services • Global services, which provided repair, upgrade, and maintenance, as well as logistics, return management warehousing and many other important post manufacturing support services • A global materials service group supported the three business units by providing sourcing, procurement, and other common supply based management resources • They provide substitution for capabilities that the customers already posses, so that they can cut cost and get extra short term capacity How did it evolve? • As Solectron’s total volume increased, they were in a stronger position to bargain with suppliers in turn saving their customers money • Solectron could offer customers capability that they couldn’t get themselves; reduced prices due to greater volume purchasing • Instead of outsourcing they turned to tactical turnkey assembly, in which OEM specified what was needed, and Solectron bought the materials, built the product, and shipped it to the customer...