AIC Systems is a Taiwanese electronics manufacturer that began producing printed circuit boards and has expanded into consumer electronics. They were facing problems with low productivity on their netbook assembly lines due to inconsistent operations, bottlenecks, and a spike in production demands. To address this, they implemented several solutions including adopting a batch manufacturing process with gravity feed shelves to reduce re-stocking times, assigning dedicated floaters to each line, and improving material, machine, and capital productivity metrics to better utilize existing resources and boost output.

1. AIC Netbooks : Optimizing Product Assembly
Presented By:
Sonal Ram

2. Introduction
 Advanced Integrated Circuitry, Inc., now AIC System
 Founded in Taichung, Taiwan, in 1992
 Produce printed circuit boards, motherboards and graphic cards
 Now known as, Competed as low-cost manufacturer
 2000 : Evolved as Original Design Manufacturer (ODM)
 2001 : Kaizhi plant
 2007 : Enters consumer electronic market
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3. Good Practices
 Manufacturing process style - Batch in a line
 Gravity feed shelves, reducing re-stocking and reset
time
 Higher quality products, through division of work
 Kaizen approach
 Assigning 2 dedicated floaters to each line
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Picture: Gravity Feed Shelves

4. Bad Practices
 Non standard operation on assembly line
 Unsanctioned buffer inventories between stations
 Quick fixing the assembly line problem by supervisors
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5. Problems
 How to improve productivity of existing capacity
Unexpected spike in production demand
CSO unwilling to invest on 3rd shift workers
Increasing shifts to 10 or 12 hours was not sustainable
Even with 2 floaters per line, they were barely keeping up
Pressure from corporate office to improve current performance and
boost Gross Margin
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6. Solutions
 Material productivity
Plays important role in cost of production
Depends upon percentage of rejection, creation of scrap, level of spoilage,
obsolescence, work wastage etc.
Increased skilled workers, adequate machine tools, good design of product
 𝑴𝑷 =
𝑵𝒐.𝒐𝒇 𝒖𝒏𝒊𝒕𝒔 𝒑𝒓𝒐𝒅𝒖𝒄𝒆𝒅
𝑻𝒐𝒕𝒂𝒍 𝑴𝒂𝒓𝒈𝒊𝒏𝒂𝒍 𝒄𝒐𝒔𝒕
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7. Contd.
 Machine productivity
Converts raw material into finished product through mechanical
Depends upon availability of raw material, power, skill of workers, machine
layout etc.
 𝑴𝑷 =
𝑶𝒖𝒑𝒖𝒕 𝒊𝒏 𝒔𝒕𝒂𝒏𝒅𝒂𝒓𝒅 𝒉𝒐𝒖𝒓𝒔
𝑨𝒄𝒕𝒖𝒂𝒍 𝒎𝒂𝒄𝒉𝒊𝒏𝒆 𝒉𝒐𝒖𝒓𝒔
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8. Contd.
 Capital productivity
 Replacement of fixed assets brings down maintenance cost but requires capital
expenses
 Depends on how effectively assets are utilized
 C 𝑷 =
𝑻𝒐𝒕𝒂𝒍 𝒐𝒖𝒕𝒑𝒖𝒕
𝑪𝒂𝒑𝒊𝒕𝒂𝒍 𝒆𝒎𝒑𝒍𝒐𝒚𝒆𝒅
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