Contract manufacturing management for an opticaldevice production company

Abstract

The use of contract manufacturer is an increasing trend in outsourcing of production and manufacturing to reduce cost and maximize the profit. Consequently, the companies that outsource their manufacturing to contract manufacturers are facing external and internal challenges to maintain competitiveness and deliver new products on time and on budget. An optical device production company is selected as Case Study Company for this research. Therefore, the objective of this research is to improve contract manufacturing management.

This study applies Six Sigma DMAIC methodology to improve assessment criteria for contract manufacturer selection. In addition, improvement in assessment criteria is consisted of manufacturing technology and capability to support new product development. Furthermore, this study utilizes strategic Advance Product Quality Planning (APQP) concepts to control and follow up New Product Introduction (NPI) activities at the selected contract manufacturer to ensure the success of new product launch. The outcomes of improvement and implementation are benchmarked against reference current new product in NPI phase, and the study is performed to understand the importance of contract manufacturing management for NPI activities. Finally, contract manufacturing assessment and contract manufacturing elements are incorporated into the supply chain process to support outsource manufacturing.

The results have shown that strategic items outperformed at the reference contract manufacturer allow product development team to select contract manufacturer that best fit their requirements, also, examine methodology to manage contract manufacturer which have better visibility to control the progress and minimize the impact of any delayed activities.