CEU Electronic Theses and Dissertations, 2019
| Author | Sung, Yu-Yi |
|---|---|
| Title | Industrial 4.0 of EMS - Synergy of Foxconn Order Fulfillment systems and processes |
| Summary | Electronics Manufacturing Service (EMS) is a term used for companies that offer the value-add services, such as design, manufacture, test, distribute, repair, and reverse logistics services for electronic components and assemblies for original equipment manufacturers (OEMs). The essence of EMS business model is to specialize in pooling resources of in-house manufacturing, raw materials (RMs) procurement, and finished goods (FGs) logistics delivery with maximized economies of scale, flexibility, and service quality as well as minimum operating costs. Based on the characteristics of product line, we can split to High Mix Low Volume (HMLV) and High Volume Low Mix (HVLM). Mix generally stands for the complexity or difficulty of different product sets, and Volume refers the number of unit built. Typically, lower tier EMS provides HMLV and higher Tier provides HVLM. How an EMS responds to sudden spike in customer demands with quick and efficient actions decides its success level. Cloud Network Technology Kft, known as Foxconn Hungary, has been offering the buy-and-sell Contract Manufacturing (CMs) services via build-to-order (BTO) model, for Huawei Technologies (Huawei) Telecom & Communication Division, who owns R&D, materials planning, and supply chain management (SCM). A comprehensive operational management in efficiency has been the focal concept when Foxconn began the business partnership with Huawei since 2009. The whole order fulfillment is basically composed of sales demand management, RM planning, in-house production and test, packing, FG logistics, warehousing and custom services. To effectively ensure we are on the right pace, Foxconn Hungary has been defining, verifying, implementing, and monitoring KPIs time by time. However, the rapidly growing customized demands have brought the impacts led by unpredictable and unbalanced sales demands as well as the increasing customer requests (CSRs). In response to the HMLV market characteristics in Europe, the development of manpower skills, systematic processes, and the conceptually smart systems enable the rapid order fulfillments cycles and balance demand and supply. In addition to the traditional advantages on lean management, Foxconn has also been reinforcing its service values and strengthening the competitive strengths by adopting or developing various IT systems and platforms. With the various efforts of digital transformations, Foxconn streamlines the process as its well-known intellectual properties, and this framework, has essentially been playing a critical role in standardizing the electronic manufacturing services for OEMs in a service-oriented manner. The streamlined systems sometimes act as the role of a double-edged blade, bringing more resistance to mutual operations and requiring more efforts for workflow improvements; for example, those high-tech-savvy companies who own their own systems and flows as Apple or Huawei. Providing BTO model and serving HMVL customized orders in Europe, Foxconn has been experiencing the difficulties of capacity management in a balance way. It depends highly on the order configurations, allocation, CSRs of Huawei orders. Unlike the build-to-forecast (BTF) model, the biggest problem with the BTO model is how to ensure that the capacity is matched to the order quantity with the frequent fluctuation. Huawei Europe Supply Center (ESC) collects sales orders from the sales representatives’ offices spread in EMEA regions, and sends out to EMS for value-add services by request date. Telecom products do not have as significant seasonal factor or wave as consuming electronic products do, and is suitable for the BTF model. Nevertheless, a large number of telecom service providers and countries in Europe make it hard to predict. When different needs arise, the number of product portfolios will be growing considerably. Additionally, the easy-to-see and unchanging sales strategy, which the sales representatives always offer price-cutting competition by the deadline of financial reports, has made more EMEA telecom service providers be aware and bought wireless base station products (WL) as well as servers at a comparatively lower price at the end of the month and the end of the quarter. The phenomenon has prevented that Foxconn Hungary effectively leverage the capacity and resource to every month on an average basis through the well-built integrated Foxconn systems with ease. Instead, the business characteristics become the main mutual pain points. In terms of Huawei business, the capacity management and output management are largely limited by the orders Foxconn Hungary receives from time to time. The benefits of continual digitalized operations and improvements have been promoting to tackle the problem. However, in reality, there are more than 20 IT systems operating in this business partnership, starting from Huawei purchase orders (POs) generation to FGs shipments. The two-sided systems communicate with many manual interfaces on a daily basis, and the information sharing and transmission also have gap in time as expected. To achieve more reliable forecasting, customer demands coordination, materials preparation, production and shipment real-time priority management, equipment and tooling maintenance, warehouse management, layout design, and property and information security, the automated IT systems communications, big data analytics, information transfer under security management for decision-making is an imperative lifeline for EMS survival from the Red Sea Competition. We attain to introduce an ongoing-discussion intelligent system and working model in terms of optimizing supply & demand management in EMS, which enable the automatic order fulfillment activities to ease capacity planning issues and demand fluctuations in this project. After, we will evaluate the operating strategy with thorough analysis about investments and returns, and suggestions. |
| Supervisor | Norbert Sepp |
| Department | Economics MSc |
| Full text | https://www.etd.ceu.edu/2019/sung_yu-yi.pdf |
Visit the CEU Library.
© 2007-2021, Central European University