The Case of the Solectron Corporation

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Table of Contents

Introduction
Discussion
Conclusion
References

Introduction

The case of the Solectron Corporation, an American company, founded in 1977, provides an opportunity to assess the transformation of the organization involved in electronics manufacturing. The answers to the questions provide help to identify the key changes that have taken place in the operating environment of the corporation, its main areas of work, mechanisms for improving interaction with suppliers and customers, as well as future development prospects. Based on the evaluation of Solectron’s business and its needs, short-term and long-term goals may be identified.

Discussion

Initially, Solectron was a company that supplied electronic components. Later, as Simchi-Levi et al. (2021) note, the organization grew to the status of a supply chain integrator and focused its activities on contract manufacturing. The principle of reducing the time of delivery to the target market was laid at the heart of the business. At the end of the 20th century, Solectron relied on technological optimization and expansion in the material base, thereby increasing the number of consumers and improving the quality of service by attracting skilled labor and reducing prices (Simchi-Levi et al., 2021). According to Sharma et al. (2018), contract manufacturing exporters achieve enhanced performance when utilizing an exploitation strategy and “seeking exploration opportunities” (p. 271). Therefore, the company’s activities proved to be successful and in demand.

By advancing its global expansion strategy, Solectron has achieved an increase in partner contracts with numerous vendors. Due to this, the printed circuit boards produced by the company have become its final product supplied to the target market. The improvement of customer service is carried out through the rational distribution of manufacturing facilities globally to address the specific needs of different regions. Kim and Schoenherr (2018) argue that the practice of information integration allows for making the right decisions quickly and efficiently. Following this strategy, Solectron has evolved from a contract manufacturing supplier to a supply chain integrator, improving its services and increasing operational efficiency.

Organizational culture has become one of the main factors allowing Solectron to successfully integrate its acquisitions. Shifts in the perception of market activities and interactions between employees have helped the company reshape the course of work on a new plane. As Tarba et al. (2017) remark, when organizing the activities of individual teams with specific functional responsibilities, the company has started to develop productive integration plans. In addition, appropriate time frames have been identified as crucial markers influencing the success of activities. Any mode of integration requires an evaluation of all available information, which, according to Keller and Alsdorf (2012), is a natural practice even in a spiritual context. As a result, by planning and compiling checklists, Solectron has been able to achieve the tasks set.

The company’s culture greatly influenced its market success and recognition. Simchi-Levi et al. (2021) state that, according to Solectron’s managers, the lowest costs directly correlate with quality standards, and in the 1970s-1980s, the organization promoted superior customer service. By the turn of the 21st century, the company had won numerous awards, but it continued to pursue a policy of continuous improvement (Simchi-Levi et al., 2021). Building productive relationships with suppliers and original equipment manufacturers became one of the critical success factors. As Cui (2019) argues, this way of working allows for growth potential. Low switching costs had an impact on the organization’s culture during the downturn of 2001, but Solectron managed to gain a good reputation and enter the Asian market, which was a valuable step.

In the future, Solectron should explore new industries to attract more customers. One of the promising industries is solar energy supply because, as Radavičius et al. (2021) state, establishing supply chains for such a product can help optimize green production. The company should also work on the production of high-quality components and the development of a resource base to expand markets. Improving logistics processes is a natural step toward innovative growth and improved interaction with target consumers.

In the short term, Solectron should work to reduce cost and inventory levels. Radzuan et al. (2018) emphasize the importance of vendor-managed inventory as a strategy to address the aforementioned objectives through detailed target market analysis and forecasting. In Solectron’s case, attention to Asian distribution channels is one of the top priorities. In the long term, the company should focus on improving its operational flexibility and take appropriate actions. As potentially valuable steps, market expansion and batch ordering are promising areas of work. In addition, the organization should improve relationships with both customers and suppliers to successfully plan activities and implement the necessary tasks to fulfill partnership agreements, thereby strengthening its brand name.

Conclusion

The analysis of Solectron’s case allows for identifying the key stages in the development of the corporation’s activities and highlighting success factors. Based on the details of the case and findings from relevant sources, the main drivers of transformational change are described, and the role of organizational culture is presented from a business impact perspective. The future directions of Solectron’s work are defined, and the steps to take in the short and long term are described, namely the expansion of the target market and the optimization of operational flexibility.

References

Cui, Q. (2019). Quality investment, and the contract manufacturer’s encroachment. European Journal of Operational Research, 279(2), 407-418. Web.

Keller, T. & Alsdorf, K. (2012). Every good endeavor: Connecting your work to God’s work. Penguin Random House.

Kim, Y. H., & Schoenherr, T. (2018). The effects of supply chain integration on the cost efficiency of contract manufacturing. Journal of Supply Chain Management, 54(3), 42-64. Web.

Radavičius, T., Van Der Heide, A., Palitzsch, W., Rommens, T., Denafas, J., & Tvaronavičienė, M. (2021). Circular solar industry supply chain through product technological design changes. Insights into Regional Development, 3(3), 10-30. Web.

Radzuan, K., Omar, M. F., Nawi, M. N. M., Rahim, M. K. I. A., & Yaakob, M. (2018). Vendor managed inventory practices: A case in manufacturing companies. International Journal of Supply Chain Management, 7(4), 196-201.

Sharma, R. R., Nguyen, T. K., & Crick, D. (2018). Exploitation strategy and performance of contract manufacturing exporters: The mediating roles of exploration strategy and marketing capability. Journal of International Management, 24(3), 271-283. Web.

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2021). Designing and managing the supply chain: Concepts, strategies and case studies (4^th ed.). McGraw-Hill Education.

Tarba, S. Y., Ahammad, M. F., Junni, P., Stokes, P., & Morag, O. (2017). The impact of organizational culture differences, synergy potential, and autonomy granted to the acquired high-tech firms on the M&A performance. Group & Organization Management, 44(3), 483-520. Web.

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The Case of the Solectron Corporation

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