Quality and Efficiency in Sync: An Electronics Manufacturer’s Leap Forward
reduction in work-in-process (WIP) inventory
reduction in raw material stock, improving inventory turnover
saved per year over 3 years through cost optimization
drop in product defect rate, nearing world-class quality levels
Total Savings
The Challenge
A leading multinational electronics manufacturer in Indonesia, serving the global camera market with a 45% market share, faced a critical moment of transformation. Pressured by a sudden demand surge from its U.S. headquarters, the plant was expected to double its production capacity in a short timeframe.
However, this target came with internal obstacles. The company was wrestling with a high defect rate, consistently averaging 3.54%, which far exceeded its quality ceiling of 0.5%. The issue not only increased scrap and rework costs but also strained relationships with customers as complaints began to rise. Meanwhile, the shop floor suffered from unbalanced production flows, frequent downtime, and bloated inventory, all of which blocked scaling efforts.
What the company needed was not just incremental fixes, but a structural shift in the way quality, operations, and efficiency were managed.
SSCX Approach
SSCX International partnered with the client to architect a full Operational Excellence & Cost Optimization program. Grounded in Lean Six Sigma, SSCX began by identifying high-impact initiatives using a benefit/effort matrix, aligning them with P&L, balance sheet, and cash flow impact.
Improvement projects were deployed under the DMAIC framework. One focused specifically on defect reduction through a data-driven quality transformation. Others tackled inventory management, production flow balancing, and overall equipment effectiveness.
Key tools and techniques used:
Value Stream Mapping to visualize inefficiencies
Control Charts and Capability Analysis for baselining
Fishbone Diagrams to identify root causes
Design of Experiments (DOE) to determine optimal process parameters
Rather than rely on assumptions, the SSCX team led structured experiments to validate every change before full rollout.
Exploration & Validation
The team discovered that defects clustered around specific production stages. Root cause brainstorming identified experimental variables tied to equipment settings and material conditions. SSCX applied full-factorial DOE, isolating three main contributors to high defects.
In parallel, inventory bottlenecks were traced back to batching inefficiencies, imbalanced WIP, and lack of supplier coordination. A pilot kanban pull system was introduced and cut WIP by 60% in the test cell, confirming feasibility.
Just as crucial: everything was backed by hard data. From control limits to baseline yield, no improvement was rolled out without clear statistical evidence of impact.
The Solution
With validated root causes in hand, the company:
Standardized optimized process parameters identified via DOE
Introduced real-time SPC monitoring to detect drift and maintain process stability
Overhauled maintenance schedules to prevent equipment-based defects
Trained operators and engineers in the “why” behind the changes to drive ownership
For inventory:
Raw material stock was slashed by 50% through vendor-managed inventory and smarter replenishment
WIP levels dropped 65% through pull scheduling and flow balancing
Floor space previously used for excess inventory was reallocated to support increased production
Governance routines were embedded, with daily performance reviews and response triggers to sustain improvements.
The Result
The transformation was comprehensive:
📉 Defect rate dropped close to 0.5%, saving $398K/year in scrap/rework
📦 Inventory turns increased sharply, releasing working capital and reducing storage overhead
⚙️ Operational savings of $12–18 million/year achieved and sustained over 3 years
🔁 End-to-end flow became smoother, making capacity expansion realistic without major capex
But the biggest win was cultural: frontline teams began leading small improvements themselves, supported by leadership that now understood operational excellence as a strategic lever.
What We Learned
This case proves that quality improvement is a gateway to business scalability. Instead of viewing defects and delays as inevitable, SSCX helped the client convert pain points into performance levers.
The combination of data, discipline, and daily execution enabled a complex organization to simplify—and scale. Quality and efficiency no longer pulled in different directions. Now, they move in sync.
