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Monday, July 23, 2007

The use of Lean manufacturing at Zetex Semiconductors UK.

It is good to read about a company who is doing well in the UK, in a very competitive market, interesting read, I met with Zetex's Operations Guru about three years ago, interesting company, with a strong management team......

Zetex Semiconductors, Diet of lean and chips

Manufacturing in Action, Source :
The ManufacturerZone

In an industry increasingly dominated by Far East manufacturing, Zetex Semiconductors is holding its own – and making impressive strides on its lean journey, as Mick Conlon told Bernie Sheehan
In November Zetex Semiconductors became a certified partner of Osram’s ‘LED light for you’ network, designed to provide a worldwide source of technical expertise in LED lighting. Osram – one of the world’s leading lighting manufacturers – holds a number of key patents in this area and the certification will give Zetex early access to the very latest LED-based lighting projects and technologies – and help it to shape future solutions.
Zetex offers a growing range of IC (integrated circuit) products. As well as expanding into lighting – specifically the new generation of high-brightness LEDs for room lighting and car headlights – its power management products are used in applications from cellular phones to digital cameras, hand-held games and laptops, while its signal management family includes audio, video and direct broadcast by satellite (DBS) products – such as analog and digital audio amplifiers and ‘low noise block’ (LNB) products for satellite dishes. The company also produces a wide range of discrete semiconductor products, where a single device (a transistor, a diode, etc) is put on a piece of silicon – compared to a number of devices integrated together, as in an IC.
Zetex employs more than 450 people in the UK, and 750 worldwide. Its annual turnover was £67.2 million last year, up 17 per cent on 2005. Two years ago, the company merged two of its UK wafer fabrication plants at one site, near Manchester, where it now manufactures six-inch and four-inch silicon wafers in separate operations. “The old site was a mile away, on the top floor of a 19th century cotton mill, and was no longer suitable for our needs,” said Mick Conlon, UK operations manager.
Having reduced its cost base with the site consolidation, Zetex turned its attention to improving productivity. “We’re a company that is still manufacturing in the UK in an industry where manufacturing is now predominantly in the Far East, so we were feeling rather vulnerable,” explained Conlon. Mid-2005 Zetex attended a seminar with lean guru Dr Nick Rich at Cardiff University, specially organised by the NMI (National Microelectronics Institute) for the semiconductor industry. It provided an opportunity to get together with all the other ‘wafer fabs’ to discuss best practice. “We’re a very insular industry, very complex and high-tech – we didn’t want anyone telling us how to manufacture semiconductors, but the seminar opened our eyes to the possibilities of lean.”
Following a year of information gathering, Zetex began its lean implementation, focusing first on the manufacturing organisation. “We blanket bombed employees with information on what lean is, how it works and what its benefits can be,” continued Conlon. “Then we started initiatives like 5S in the offices and manufacturing areas.” The main focus remains education and the company has just completed a two-day manufacturing-wide initiative. The production line stopped and everyone on shifts attended a six-hour lean session, including a lean manufacturing game and 5S seminars as well as general health and safety training.
“We got very good feedback, particularly because we didn’t bring in external consultants, we organised it all ourselves,” said Conlon. “The key for our people was the idea of movement from batch to single flow manufacturing. People got a feel for why takt time and kanbans are important, and also understood the quality benefits of checking their own work rather than someone else doing it further up the line. We’ve seen lots of improvements by soaking up and applying lean principles over the last 18 months – we’ve cut cycle time by nearly 50 per cent in and on the yield front we have cut scrap by six per cent in 12 months. Delivery-on-time is now approximately 97 per cent. In the second quarter of 2007 we will start value stream mapping.”
To support the lean implementation, Zetex has been working with the Manufacturing Institute at nearby Salford Quays. It has enrolled shopfloor supervisors on team leadership programmes, high-potential managers on the MSc in manufacturing leadership and senior executives on the lean leadership programme. “Manufacturing has been the core of our lean program so far but we want to roll it out right across the business.”
Meanwhile, the company continues to roll out new products – more than 100 in 2006 alone. The direct broadcast by satellite market is growing and customers are demanding better energy usage from products. Zetex is addressing this by launching new lines with lower power use and more functionality. “Over the next three to four years the IC side of the business will require a very sophisticated toolset to produce the designs we require which will need foundry wafer fabs,” said Conlon. “We will continue to design internally, but source externally.”
The UK sites will then focus on discrete component production. “A lot of IP [intellectual property] in discrete components is tied up in the manufacturing processes rather than the design. Many wafer fabs are sourcing discrete components from the Far East, but we see value in leveraging the processes we have here in the UK and we will design and manufacture the products internally. Applying lean principles will be vital in making that decision the right one.”




Ian said...

Thank you for this blog, which I found via the Google blog search. It helped me to decide to start my career in electronics with Zetex. As you probably well know, very little information is easily available about Zetex. Your blog was enlightening about what was going on behind the doors at Zetex.

School of E&EE, Uni of Manchester

Gordon said...

Hi Ian,

Glad I could help, I have had soem history with these guys, they are an interesting company, I wish you well for the future, feel free to contact me if you want to chat more.


Anonymous said...

This makes things sound like Zetex is doing well. They have good reputation of good quality, albeit overpriced, bipolar transistors. I always assumed that Zetex was just another Chinese transistor company. Rumors are abound that NXP and Diodes Inc. have made bids to buy out Zetex in anticipation of the 2007 sales figures.

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