Tijuana Facility Doing Complex System Integration
SigmaTron International’s Tijuana, Mexico facility has recently begun a systems integration project for a manufacturer of energy storage systems used in mission critical backup power applications for data centers, hospitals, telecommunications providers, broadcast stations and manufacturing plants. The systems also help customers reduce peak power, lower fuel consumption and achieve energy savings in electric motors and diesel generators on shipyard cranes, rail power substations and wind power generation systems.
The Tijuana facility offered a solution that provided the cost advantages of offshoring, but the logistics simplicity of nearshoring.
“Our customer was looking for a manufacturing partner that had the ability to support both lower level subassemblies and the higher level system integration required by this product. They also needed a supplier able to support variable demand and scalability in volumes over time. And, most importantly, they wanted a supplier with a responsive program management team and real-time visibility into project status and material availability,” said Elvia Hinojosa, Director of Operations for the Tijuana facility.
According to Hinojosa, the real-time visibility into project status provided through SigmaTron’s Score system was a key factor in choosing SigmaTron.
Additionally, the Tijuana Test Engineering team helped the customer develop a more efficient test process by developing a test continuity fixture for the cabinet.
“SigmaTron’s Tijuana facility provides an excellent solution for companies that are looking to tap the cost competitiveness of a Mexico manufacturing solution and the technical/logistics expertise of a multi-national EMS provider. Its border location helps ensure a short finished goods pipeline,” said Curtis Campbell, Vice President, Sales West Coast Operations.
Green Initiative Compliance Service Center Expands
SigmaTron International has moved its Green Initiative Compliance Service Center from its Suzhou, PRC facility to its Taipei International Purchasing Office.
“While most of our customers completed their RoHS conversions when the original rule was put in place, beginning in July, RoHS II will start phasing in restrictions for previously exempted medical devices for the same six hazardous substances found in RoHS. While most of our medical customers had started the conversion process earlier; those conversions didn’t always include collecting RoHS compliance certificates from the suppliers. Moving our Service Center to Taipei enables us to expand the resources we have supporting this activity as well as better support the requirements of other similar legislation,” said John Sheehan, Vice President and Director of Supply Chain.
The Center supports compliance in gathering documentation for RoHS, RoHS II, REACH, conflict minerals and California’s Proposition 65, in addition to customer-specific tracking activities. Oracle’s Agile Government Compliance tool supports the operation by providing updates as monitored jurisdictions create new rules or modify existing rules. The tool has also been programmed to support customers who have specific lists of substances and materials that they want to track.
In the case of REACH, the EU’s program for Registration, Evaluation, Authorisation and Restriction of Chemicals, the database tracks 735 hazardous compounds at levels greater than 1000 ppm. The database covers all componentry purchased on behalf of SigmaTron’s customers.
“Getting this information for large suppliers isn’t difficult. The challenge is often found in getting the same documentation from smaller custom part suppliers. The expansion of our Service Center helps ensure that as legislation of this type continues to evolve, we will be able to provide timely support to our customers by maintaining a comprehensive database,” added Sheehan.
SigmaTron’s system will outlined in greater detail at an industry conference this fall. Sheehan will be presenting a paper titled, “Contract Manufacturing and Conflict Minerals: Creating A Workable Compliance System,” at SMTA International in Chicago on Wed., Oct. 1.
PRC Facility Increases Factory Automation
SigmaTron’s Suzhou facility has been automating some of its test and conformal coating processes.
“Our goal is to reduce the time per printed circuit board assembly (PCBA) by automating processes that can have significant variation when performed manually. In our improved processes, the operator pushes a single button and the machine activates the board, performs the test steps and releases the board when finished. The test result is then stored in the database server,” said Hom-Ming Chang, Sigmatron’s Vice President China Operations.
In addition to reducing processing time by eliminating variation, the automation improves process consistency and overall quality. It also improves productivity and reduces the number of employees needed to support the operation.
“Our goal is to continue to provide customers with highly cost competitive solutions by taking a Lean approach to eliminating variation and non-value added activity on our production floor,” Chang added.
PRC Facility Provides a Solution for Products Sold in China
Sigmatron International’s expertise as a multinational supplier is increasing its attractiveness to customers in the PRC.
“In China, multinational companies are becoming preferred over indigenous suppliers for domestic production. The rationale is that a multinational contract manufacturer such as SigmaTron has stronger systems and processes in place because of the high standards associated with serving a global market,” said Hom-Ming Chang, Sigmatron’s Vice President China Operations.
As a result, Chinese companies are coming to SigmaTron because of its quality and responsiveness, as well as for the benefit of being able to tell their customers they source to a world-class supplier.
In response, SigmaTron has structured its business to support both work with Chinese original equipment manufacturers (OEMs) and foreign OEMs, by creating separate business entities focused on export and domestic production.
The export operation is supported by Taipei’s International Purchasing Office and has a dollar-based business model for labor and material transactions that is similar to SigmaTron’s other facilities. The domestic production entity utilizes an RMB-based model for both invoicing and material purchases. This makes its simple for China-based customers to avoid currency fluctuations and/or conversion costs.
Over the past year, the PRC facility’s business base focused on production that includes the China domestic market has been growing.
In one case they are supporting a manufacturer of static control equipment and systems who recently transferred its US manufacturing operations to China. The customer’s facility in Shenzhen will do final assembly for both U.S. and China markets. SigmaTron’s facility will handle board-level production and invoice in RMB. The customer saves capital equipment expense plus has a single source to manage the printed circuit board assembly (PCBA) supply chain.
In another project, Sigmatron is producing a water pump subassembly which includes multiple PCBAs and conformal coating with the customer handling the final unit assembly in China.
Other opportunities are on the horizon.
“Many companies appreciate the fact that we are consistent in our processes. They recognize we will stick to their approved vendor list (AVL), protect their intellectual property and adhere to industry-recognized quality standards. They also understand that we keep our commitments in terms of on-time delivery
and superior quality,” Chang added.