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We're Floating the ICEBERG

John Murphy, VP of Operations


Yes, I know all icebergs float. The problem with icebergs is that the problems lie below the surface. Well, we've been working very hard in the last 8 months to bring our manufacturing problems above the surface so we can address and solve them. Please allow me to share what we've been doing to reduce our lead times to manageable levels for you.

Much of the success that S-TEC has enjoyed over the years is due to the service we provide for you, the S-TEC dealer, which include fast response times to your requirements. As you all know, over the past year our lead times have increased drastically. The country's economic prosperity has led to a situation in which demand has out paced our capability and capacity. S-TEC did not envision the demand sustained over recent months and fell behind in honoring your orders and lead time needs. We have been involved in a major effort to solve these problems for the last 6 to 8 months. Our efforts are finally starting to show some results. Let me share some of our growing pains and solutions with you.

At the beginning of the year, our materials systems were still geared for 1990's sales rates. In order to support the higher sales volumes we have been experiencing, we hired a new Materials Manager, Kyle Farley. His task is to bring these systems up-to-date by accomplishing the following:

• Re-vamping our Manufacturing Resource Planning (MRP) system and bringing the MRP system into full utilization.
• Insuring raw materials are properly managed so that your orders can be shipped on time.
• Improving our relations with existing vendors by developing "partnership" relationships.
• Hiring a professional Production Scheduler.
• Re-organizing the Purchasing Department to help add focus to troublesome areas.

In June of 1999, S-TEC hired a new Quality Assurance Director, Brian Lovejoy, who is tasked with the following projects:

• Improving our materials ac-ceptance program, and communicating and working with our suppliers to improve product acceptance to design standards.
• Training our personnel within the QA department to accomplish their tasks in a more professional manner.
• Updating quality policies and procedures.

Already in progress is the development of better test equipment to aid us in the incoming quality inspection process.

We added a new Manufacturing Manager, Bob Lundgren, to our staff. Bob is well versed in modern manufacturing techniques and will manage numerous projects including:

• Introducing Focused Factories or "CELLS" concentrating on increased through-put of a single product.
• Re-organization of the production lines, seeking improved processes that will assure greater
• product output, better quality, and overall increased productivity.
• Improved documentation of manufacturing processes.
• Adding manufacturing aids that will assist employees in assembling a product faster and in a more consistent, repeatable fashion, building quality into the product in the process.

To date, we have doubled our daily production of System 55 autopilots and we are working to double that number again, because your sales levels demand it.

In the Information Technologies Department, developments have been made to allow departments and managers to communicate and respond quickly to challenges without the need for "sit down" meetings.

The Manufacturing Engineering Department hired Bob Hawkins, a Manufacturing Engineer with vast experience in electronic design, assembly, and materials management. Projects Bob will be working on include:

• Improving existing and overseeing the design and construction of new testing equipment.
• Working with each of the Cells to improve processes and insure proper utilization of materials.
• Replacing labor intensive through-hole PC board assembly with computer Surface Mount Technologies (SMT).

We have also established a Manufacturing Training Department. John Bracke, an Industrial trainer, was hired in January 2000.

All new employees will complete a basic training course prior to reporting to the production floor.

The training department has also implemented an Interconnecting and Packaging Electronic (IPC) approved Solder Certification Course for employees. The course is free of charge but is conducted on the employee's time, not company time. The response has been great.

While we got behind the power curve, we are working very hard to improve the current situation. We are striving to improve quality and quantity of our existing products. S-TEC is also working hard to introduce new products that will decrease the pilot's workload.

We have made numerous changes in a very short period of time, but we have not changed our "can-do" attitude you have learned to expect from S-TEC. Stick with us and we'll all prosper in the long run.