Quality Challenges of Low Volume High Mix Manufacturing

1. Quality Challenges of Low Volume High Mix Manufacturing Jairam P Sampath COO Kaynes Technology

2. Outline of Presentation • Manufacturing Getting Redefined • Understanding “Low Volume – High Mix” Manufacturing • The Business Aspirations & Imperatives • Key Challenges • Managing Quality in “Low-Volume High-Mix” Manufacturing • How do we then deliver Best-in-Class quality? • Conclusion and Recap • About Us

3. Manufacturing Getting Redefined • Focus on Core Competencies, Increased outsourcing. • More Sources of Economies than Scale alone  Specialization, Network, and Competency • Transformation of the nature of work and expectations: • “Job-Work” at one end to “ODM” at the other • Functional Knowledge to Domain Specific Knowledge • Partner to Collaborator to Developer • Technological advancements forcing the pace  Auto-electronics, etc.

4. Understanding “Low-Volume High-Mix” Manufacturing • Low volume (Single piece to hundreds at a time) • Higher rate of “NPD”, Large number of Products in Portfolio • Specialized Niche Applications, Multiple Certifications • Flexible Production Lines, Combination of Generic and Customized Equipment • Versatile People, Multi-Skilling, Multi-Tasking • Sophisticated Supply Chain Practices ALERT MANUFACTURING!

5. The Business Aspirations & Imperatives • Customer Expectations Built at an Early Stage: • Gets more demanding over time • Scaling up process: • The Difficulty in Focusing • Structure, Systems, and Organizational Culture Challenge • Strategic Choices May Reflect an Urgency to Scale-up and • Growing Profitably: • Grow with Each Customer • Enter New Industry Sectors • Consolidations in Supply Chain

6. Key Challenges

7. Managing Quality in Low-volume High-mix Mfg. • Definitions are more inclusive now Reflect expectations across the customers value chain • Quality systems + Process quality + Product quality  Standards and compliance • Scope  In-house, Vendor, Partner, Sub-contractor, … • Equal contributions by “Hardware” and “Software” of manufacturing • Many sources of disturbances  NPI, ECO, delay in part arrival, forecasts variances • Small lot size and changeover High potential for errors Quality as perceived by customer is a net result of all actions

8. How do we then deliver best-in-class Quality? • High-level Actions • Train, Re-train, Up-skill, Cross-skill, Qualify, Certify People • Close and pro-active relationship with NPI team • Monitor the manufacturing “Software” • Engineering Documentations • System Masters and Records • Quality incident management • Follow-through CA, PA, and CM • Create a Culture of Quality-Best-Practices Even high level actions need sharp focus depending on the manufacturing environment

9. How do we then deliver best-in-class Quality? • Enquiry / Prospecting / Proposal: • Understand Customer’s Urgent Needs and Challenges, Set appropriate expectations • NPI: • Keep communications on “Hot-Line” with the Customer • Get Feedback and Implement Corrections • Purchasing: • Prepare and Analyze the Procurement Plans Early • Upfront and Quick Communication with Suppliers • Evaluate and Audit Key Suppliers • Be extra careful with “Customer-Supplied” Parts

10. How do we then deliver best-in-class Quality? • Engineering Support: • Implement a “Workable” NPD process • Create specific teams for “Major” NPDs • Audit the “Engineering Support” Process frequently • Production & Quality: • Strive for Consistency of Compliance during Changeovers • Link Processes Effectively to Shorten “Start-to-Finish” time • Adopt “Standards-Based” Manufacturing Practices & Monitor Yields • Monitor Material “Wastages”, Proportion of Rework, and “Abandoned” WIP • Program Management: • Exhaustive Agreement with Customer on various aspects of contract • Assess the ongoing “Health” of a particular program and engage with customers for corrective actions

11. About Kaynes Technology OHSAS 18001:2007 ISO 14001 : 2004 ISO 9001 : 2008 ISO/TS 16949:2009 IRIS Rev. 01 AS 9100 Rev. B ISO 13485 : 2003 • 700 people working at six locations across India and targeting US$ 100 Million by 14-15 • Serving Customers in India, US, UK, Europe, Australia & SE Asia • People are our strength, Systems our foundation

12. KAYNES Technology – ISO /TS 16949, ISO14001, OHSAS 18001 IRIS, ISO 13485 & AS 9100 Certified Company Prototyping and Design Validation/Verification Turnkey Manufacturing Allied Parts Development Defense and Avionics IT Peripherals Telecommunication Industrial Controls/ Automation Instrumentation Medical Electronics Railway Signaling Navigation Systems Automotive . Power & Energy Sourcing Support Embedded Design Services Job work PWA’s Servicing Support OEM Product Mftg.. Product Testing Full Module Assembly Testing

13. About Kaynes Technology

14. Recap • Manufacturing Getting Redefined • Understanding “Low Volume – High Mix” Manufacturing • The Business Aspirations & Imperatives • Key Challenges • Managing Quality in “Low-Volume High-Mix” Manufacturing • How do we then deliver Best-in-Class quality? • Conclusion and Recap • About Us

15. ……Thank You !