Readings Corporate Fantasies M-Flex Chapter
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M-FLEX MULTI-FINELINE ELECTRONIX Chapter from Upcoming Book: “Corporate Fantasies That Came True” M-FLEX MULTI-FINELINE ELECTRONIX, INC. I. Company History/Situation M-Flex was a start-up company in the early 1980s that designed and manufactured flexible printed circuit boards. However, after a decade, they had not become profitable. They asked Phil Harding, a businessman who helped failing companies, to assist them in a turnaround and grow the company. He realized he couldn’t do it all by himself, and began developing the people within the Company. II. Reasons M-Flex Elected to do Company-wide Training Under Harding, the new President, the Company began to become profitable, but he believed his staff could improve. They were like cowboys, going off in their own directions: most of the management team had been with the Company for a minimum of eight years, and many had been promoted from within without any training in management skills or human relations that were necessary for the Company to survive and succeed. Harding realized that “the Company needed to get training no matter what, because the education everyone needed, they didn’t get in school. Training opened attitudinal changes. State funding for the training made it easier.” III. Challenges The Company did not have a clear vision of where it was going. The vision of market trends was unclear, what the competition was doing was unknown, and the feasible/applicable industries and customers for their product appeared limited. The long term vision of the managers was unclear since the focus was on day-to-day operations rather than long-range goals.
2) The culture was to deliver the products to the customers. Delivery and quality control were frequent problems, and the culture was to throw manpower at the problems without understanding the causes of the problems. Brute force, overkill and luck were the culture. “Values” was not a common word in their language; therefore, there was no focus on any particular behavior. The company values were a mixture that typically happens: strong-willed individuals on the corporate staff influenced the rest of the staff, and hence the organization. Therefore, the company values were random in nature—not focused or aligned—depending on the values of the strong individuals who did not have a clear vision of where they were going, a mission of how to get there, and the values that would take them to their vision. Neither the supervisors nor the management recognized the need to develop themselves or the organization. Personal development was non-existent. B. Culture Transformation The initial training focused on soft skills, such as taking responsibility, personal effectiveness and communication, team-building, and effective meetings. The hard skills: process-mapping, cycle-time reductions and statistical process control followed the soft skill training. Teams launched the identified projects in the tactical plan. All training and projects were designed to achieve the goals in accord with the Vision statement. The program was structured in this way in order to create a culture transformation, and shift values to open up people’s thinking in order to implement the training.
A thorough assessment of the Company revealed there was no vision, mission statement or established values. A thorough analysis of the culture, management team, organizational dynamics, manufacturing operations, quality control, and sales and marketing was done. The recommendations dealt with what actions should be taken and what training was necessary to achieve M-Flex’s objectives and goals. The top twenty managers participated in a workshop “Taking M-Flex to its Next Level of Success” workshop. The workshop addressed work team building & understanding what it will take to take the company to the Next Level. The Company management team met with NSG for a strategic planning session, and developed a consensus of their vision for their three-to-five year plan. The management team created their Mission Statement: who their customers/markets would be; what their products would be; how they could produce them; what would make M-Flex distinctive as compared to their competitors; and why they were in business. The team defined and created their Values by a consensus decision. The Values serve as the driving force of the Company and how it is going to operate, as well as a foundation for decisions and behaviors for both management and employees. Tactical planning sessions followed. The purpose of this plan was to create and implement the plan details to achieve the vision. The results of the tactical plan session produced the Critical Business Success Factors, their metrics, goals and projects to be implemented to achieve the vision, and the major performance issues that needed improvement for the Company to succeed. A year-long, company-wide training program was launched with separate curriculums for managers, supervisors, engineers and the work force. All participants were involved in classroom training, as well as lab sessions to practice skills taught in class. Senil Patel, Design/Engineer/Program Manager said, “The training was very beneficial, although it was fast, with many things going on. It was difficult at first to pay attention and absorb everything, but it was excellent. We had Design of Experiments (DOE) training, especially important for engineering, and the Statistical Process Control (SPC), also very necessary. The managers and supervisors learned management concepts and leadership skills.
Gabriel Sanchez, Director of Sales and Marketing, says, “Customer Service is a very cooperative department here at M-Flex; the people do jobs beyond their requirements. Before NSG, we had management who grew up at M-Flex and didn’t have any other training. There was a tremendous amount of information to absorb, and we did learn a lot. We now make people accountable, which we didn’t do before. We now have meetings with an agenda, and the business is more focused. We know now if we can’t satisfy ourselves internally, then we can’t satisfy our customers’ requirements. Customer satisfaction significantly improved.” Senil Patel, Design Engineer/Program Manager felt, “The training demonstrated that communication is very, very important: what you ask for and what you get depends on being specific. Becoming aware of other department’s problems allowed us to be more understanding of their concerns. People from different departments saw the benefit of communicating clearly with other departments, and it improved relationships all around. I notice a difference in the systematic approach of those who have been trained, and I think training should be on a continuous basis in order to include new employees.” Quality Specialist Sheila Akins said the training benefited her in many ways such as “Simple communications issues, like how to set an agenda and conduct a meeting. Relationship classes helped the most. I still have my notebooks, and when I need to be reminded of anything, I go back and reference the material. I took the classes with the engineering group, and there are new people here now who benefit from my notes.” Terri Cruz, Purchasing and Inventory Control Manager; “Being open to change from constructive criticism within the group before the training was pretty much unheard of in the Company, as well as strategic planning, and coming to consensus in a group,. NSG was very successful in giving us a foundation and many useful tools. We learned to brainstorm together, do a plan to see where we were headed, what we needed to do to get there, improve communication and make decisions. The first few sessions had the most impact, especially the first strategic meeting about the direction of the Company, its mission, values and quality statements. The first few meetings stating our goals with other managers were very successful, too, because we hadn’t done that before. Setting goals allowed us to accomplish them in an organized manner, and in unison. These were the very best results of the NSG training.” Jean Connick, Quality engineer: “The SPC worked because everything is manual here, not computerized, and people got a good grasp of it; it helped the operators, because, after taking the classes, if there was an issue, they’d come to you…there was more open communication on the floor. The training worked better with some more than others, because with seventeen different languages spoken, some understood more than others. If people didn’t understand the language, they had an option to draw a solution, I went into the train-the-trainer program, which greatly assists problem-solving, so I can break things down for them. One of the results of the training is that now the employees have no problem coming and saying they have a problem; they aren’t intimidated.” She felt management was more accessible, and some even go to Mr. Harding. She supports and implements the incentive program and rewarding those who catch something beyond their responsibilities. VI. Approaches Taken: A. The Managers Started Working as a Team: Representatives of each function set requirements for internal customers, developed metrics for performance af outcome, agreed on goals, and developed recovery plans to achieve the goals. President and CEO Phil Harding felt he saw a major improvement in teamwork. He can review the e-mails between departments and see how things are being resolved. “I don’t have to get involved now, because people have learned to have an understanding of each other’s needs and problems.” He added, “There is an improvement among employees and managers, and many of the long-term people have gained respect for each other.” Romeo Visan: “Another very important aspect of our growth was related to the assembly business. We’ve gotten seriously involved in developing our assembly facility, Advanced Manufacturing Technology division (AMT), which is 100% owned by M-Flex. In other words, we’ve turned into a contract manufacturer where we have a turn-key product. That has increased the volume and provided added value by performing assembly,” Training of Managers Improved Their Personal Skills: Reza Meshgin, Director of Engineering, said: “I came to this company out of college. I had prior jobs, but not as an engineer, so I learned things in the training about my new position, and eventually was promoted to Director. It was certainly worthwhile. The people we have here who went through the training are still performing according to their capabilities, which were enhanced by that training.” B. Incentive Programs Were Initiated: M-Flex currently has an incentive plan to reward people who make suggestions that save the company money, improve safety, or catch quality-control errors. Senil Patel became aware of the incentive program for outstanding contributions over and above the job requirements. The Tiger Team focused on problem solving and used Cause-and-Effect Diagrams, The Five Whys and Force Field Analysis to help productivity; Communications improved between departments. The key was having the departments interface with each other in timely, clear communication with regard to their internal customers’ requirements. On-time delivery increased and quality improved as profits increased. Chris Farley, Human Resources Manager, said: “We’ve designed product commodity groups that concentrate on certain products from engineering to customer service, so everyone knows what is happening with the orders. That’s a very good thing we developed from the workshops. It took a while to get it all going smoothly, but it has been extremely successful.”
After the training, sales tripled within three years. The profits quadrupled in the same time period. There was a 67% reduction in RMAs. CFO Craig Riedel said, “Return Material Authorizations (RMA) is one-third what it was a year ago. Quality has improved, and scrap dramatically decreased. We upgraded systems that had been manually oriented, and made a major upgrade in MRP (Material Requirements Planning).” M-Flex has been built on a very stable, consistent approach with low management turnover. This important factor allows them to maintain a strong foundation, and their conservative, consistent approach has paid off well. Mr. Harding said, “Our growth is great, but what is amazing is that we are the only company growing in our industry.” Gabriel Sanchez, Director of Sales and Marketing, stated that “the Company was doing about $18 million when I was hired eight years ago, and M-Flex has really taken off since the training was completed. They are pro-active, with a lot more planning and communication, especially with the major Original Equipment Manufacturing (OEMs) we have now. Those are things we’ve been working on, as well as qualifying new accounts before they come on. We went after the market in a focused manner, and it’s paying off. We’ve grown 122% just in the last few months.” “Opening up the facility in China made a significant impact on the success of M-Flex today,“ says Reza Meshgin. “I feel that It increased our ability to produce more volume, and without it, we would have maxed out the capacity of the United States plant, and not been able to grow as much. We also utilized our Singapore facility, so in the last two years we’ve had significant growth.” The Engineering Director adds, “One key factor: we make a niche product, and there is a lot of market for it. I also think we’re very good at producing this product, and because of our planning and keeping costs low, we’re both thrifty and profitable. We’re unlike our competitors, who have high management turnover.
If you don’t know where you’re going, any road will get you somewhere. Once a vision statement was created to identify where M-Flex was going, then a mission statement was created which depicted how they were going to get there. Then the values were developed and defined as the company values. The senior staff’s role is to maintain the focus on the vision, operate the mission, and be a role model and ensure the values are implemented on all levels. # # #
CULTURE The culture was to deliver the goods to the customers, but delivery and quality were frequent problems. Brute force, overkill and luck were the culture.
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