A non-profit organization’s mandate to provide a laptop as part of their program, OLPC (One Laptop per Child) that is costing $100, failed in its mission. But the publicity of the dream product provided an impetus for a new product development. Some companies began to explore the possibility of developing their own versions of a low-priced, ultraportable computer. Of the companies who tried to launch the low cost portable computer, the Taiwan manufacturer ASUS proved that a viable market existed—with the middle-class consumers in western Europe and the United States. Their product Eee, with a 7-inch screen, an Intel Celeron ULV Dothan processor, 4 gigabytes of solid-state flash memory, and weighing about 2 pounds, sold about 350,000 units in just four months. As the trend of smaller version computer was on the rise, the Taiwanese company Advanced Integrated Circuitry, Inc. (AIC) decided to enter the market for pocket computers.
About the company
AIC was a successful company that produced printed circuit boards for mother board and graphic cards of the personal computers. For their printed circuits they had reputed customers such as Dell, Hewlett-Packard, Compaq, etc. Through its sharp business acumen, not only the company was producing low-cost boards, but also they had received a status as an original design manufacturer (ODM). As an ODM, the AIC took active roles in innovating and designing new generation of components. By doing in-house design and development work, the company nurtured longer-term relationships with its customers. The successful position with customers gave higher ambitions to AIC. They aspired to launch products in their own brand directly to the customers. When their ambition was burning red, the opportunity to enter the portable computer market strikes them.
The Launch of QuiN Netbook
The Assembly Line in China
James Ashey is the industrial engineer behind the design of QuiN 816, and the Elias Chen is the person in charge of production facility Kaizhi, located in China. There are four assembly lines running concurrently, each having ten workers, two shifts of nine hour period, producing around 700 units per shift. The total production capacity of the plant is 5600 units per day. The plant is working for six days a week, with total working days per month around 26 days. The total possible units per month are around 150,000 units. Chen and Lapin devised an effective production system to make it very efficient. There are ten workstations for each line and total 39 operations need to be carried out. After the assembly of individual products they are subjected to twin tests of quality i.e. shock test and burn-in test. Only if the products pass the test they are packed and palletized for dispatch. The assembly line is running smoothly.
The Challenge
Though the QuiN assembly lines were running more smoothly, few issues popped up such as, the webcam cable required additional adhesive to be applied for firmness; this had not been part of the original assembly line design. Another issue is unauthorized buffer inventories getting accumulated between stations. Third issue is the supervisors are engaged in “firefighting,” addressing only urgent problems without fixing the causes at source. Fourth issue is containing costs, on one side the competition is putting pressure to reduce price of the units, on the other side the costs are increasing. Fifth issue is the demand for the units are on the rise with current demand is about 4.6 m per quarter. By the fourth the quarter of the year the requirement is expected to rise 7.5 m. The gross margins are just below 10 percent. Almost all the operations are taking more time than the allocated time. About 20- 25 percent more time is consumed for the operation. The plant in charge is not in favor of increasing the shifts, instead prefers to innovate the systems and processes. The time has come to review the production system and improve the productivity of the plant.
