Sept. 21, 2010
Every one. Every single one.
International manufacturer Flextronics this May joined with its customer Coinstar to announce its manufacturing plant in Creedmoor, N.C., had built and shipped 25,000 redbox kiosks to locations all over North America. Since then the plant has built and shipped a couple of thousand more of the devices that had a hand in changing the way consumers obtained, paid for and returned movies and video games. And right around Labor Day redbox reported it had rented its 1 billionth DVD.
Most folks passing the Flextronics plant on Interstate 85 on the way to Raleigh-Durham International Airport probably don't think twice about it, other than notice its size, nearly 300,000 square feet. It's just off an unremarkable exit with gas stations, fast food joints and mini-malls.
But since 2005 the plant has been focused on building one redbox unit at a time with a single-minded devotion. The 250 employees led by general manager John Mainey use the Six Sigma Lean manufacturing techniques designed to cut waste, reduce excess effort, address defects and keep the assembly line moving. (A slide show of the plantis available.)
Mainey describes himself as a true believer in the Lean method.
He contends that American manufacturing declined as firms compared production costs in the United States with production costs in locales like China and Mexico, couldn't see how to reduce spending — much of it related to labor — threw up their hands and said, 'We'll just send it overseas.'
Instead, manufacturers need to "apply Lean and eliminate waste. Recognize that labor is just one cost, and that they must be flexible. If we can do this, then manufacturing will stay here in the U.S.," said Mainey.
The Creedmoor plant is one small part of Flextronics, a massive Electronics Manufacturing Services (EMS) firm based in Singapore with 160,000 employees in 30 countries. It generated more than $24 billion in revenues in fiscal 2010 from its work in five major divisions — computing, industrial, infrastructure, medical and mobile & consumer. Redbox and other self-service products fall under the industrial division.
In self-service, Flextronics offers hardware, software and industrial design; electrical and mechanical engineering; prototyping and manufacturing; logistics, support, and repair and refurbishment services. It has partnerships in financial bill pay, municipalities, retail, digital photo, ticketing, healthcare and advertising.
At Creedmoor, the production of each redbox is an exercise in reducing waste. The well-known box itself and much of the internal parts come from suppliers in the Raleigh-Durham metro area. The box comes painted its trademark red for most retail outlets and a royal blue for Walmart Stores.
Like many large-scale manufacturers, Creedmoor has adopted assembly practices developed in Japan. It uses the well-known â€˜Just in Time' approach to parts supply, along with Kanban, a ticketing method that tracks each part, from the box itself to every one-quarter inch screw, to better control flow. If you have one too few or one too many, you know you have a problem.
Parts come with a minimum of wrapping and boxing because "we would just have to unwrap it and throw it out anyway," said Earnest Steinhoff, manager of operational excellence at the plant.
Creedmoor has its own language and lingo. The creation of the kiosk starts as a worker, dubbed a â€˜water spider,' visits the â€˜supermarket' of parts to be used, says Steinhoff. The spider goes â€˜shopping'to gather the parts and puts them on a cart for assembly.
The redbox cart is passed from worker to worker along the stations on the assembly line. The line is on a chain that keeps moving, slowly but inexorably, at 4 inches per minute.
Workers use the supplies in the cart to assemble their portion of the kiosk, constantly referring to a station video monitor that details steps for that station. While steps may be memorized over time, the monitor is necessary because workers shift from station to station and the process changes, says Mainey.
"The monitor reinforces the steps for me," said Sharon Estes, an assembly line worker. "I've worked at seven stations in the last year. I couldn't possibly remember all the steps for each."
The changes in the process are part of Kaizen manufacturing culture that calls for continuous, incremental change, leading to tighter production, the elimination of defects and the best product.
Workers, managers and administrators meet every week to discuss any problems or other issues. It could be a part needs modifying or a step in the assembly can be fine tuned. The team determines the precise nature of the problem, the appropriate way to address it, and begins implementing actions to fix the problem.
"We've been doing the redbox for five years. We still look at ways to improve. There's no end state," said Mainey.
After assembly is completed, each redbox goes through a series of tests lasting 13 hours. Once the device is approved, Creedmoor sends out its kiosks in three shipments per week.
As for the Creedmoor plant, "(w)e get a report card everyday, we see the product head out the door, we know whether we hit our metrics," said Mainey. "Our product is very visible in market and we know we bring a good product to market."