Units of Lexmark International Inc., Johnson & Johnson's Cordis Corp., Essilor International Group's Sofi and Foxconn Electronics Inc. disclosed business developments in conjunction with the maquiladora industry conference in El Paso.
Representatives made conference presentations, and some conference attendees took organized tours Aug. 10 of certain Lexmark and Cordis facilities.
Lexington, Ky.-based Lexmark wants to boost supply-base quality for its vertically integrated maquiladoras in two facilities in Ciudad Juarez and one in Chihuahua. About 230 miles separate the cities.
``A lot of work moved back from China,'' said Kenn Farrell, general manager of Mexico operations for Lexmark's printer service and solution division. ``We spent two years looking for sources in Mexico'' to obtain better injection molding and better plating capabilities. Lexmark outsources molding for its printer cartridges.
``We want to surround ourselves with suppliers,'' Farrell said during remarks to plant visitors.
Plastics processor Nypro Inc. of Clinton, Mass., is supplying Lexmark with some components from a Chihuahua plant it acquired from Advance Dial Co. in 2002. Nypro currently is setting up a new molding operation in a Ciudad Juarez facility.
The El Paso plant of Plastic Molding Technology Inc. is another Lexmark supplier, Farrell said.
In North America, Lexmark outsources production of EP cartridges in a SCI Systems Inc. plant in Ciudad Juarez and laser printer assemblies at a Key Tronic Corp. in Reynosa, Mexico. In-house, Lexmark makes inkjet print heads in Ciudad Juarez, Chihuahua and Lexington, and toner and photoconductive drums in Boulder, Colo. It also does manufacturing in Brazil, three sites in Europe and eight locations in Asia.
Lexmark finds it is cost-effective to make toner cartridges in Mexico for Western Hemisphere markets although it is more expensive than doing the work in China.
``China is 2.3 times cheaper in labor hours than Mexico,'' Farrell said. Among Mexico's advantages, however, is production flexibility with the capability for quick line changes to meet market shifts.
Lexmark gets its molds made in China, but Farrell sees that as a problem. ``We need mold makers'' in Mexico, he said.
Lexmark adopted a multidiscipline business plan for the Ciudad Juarez bottle-assembly plants. Over three years, Lexmark conducted 20 projects that saved nearly $3.5 million on fixed assets, said conference presenter Mario Carmona, plant manager. Productivity increased 63 percent.
Carmona's plant reduced accidents by 33 percent, customer quality complaints by 75 percent, late shipments by 90 percent and scrap cost by 73 percent, he said.
Lexmark's PSS division supplies laser cartridges to business customers. The Consumer Printer Division in Ciudad Juarez has produced inkjet cartridges for the retail market since 1996.
Lexmark has moved its product and component qualification laboratories to Ciudad Juarez from Lexington, but continues to make some technical components in the United States.
Prior to March 1991, Lexmark was the information products unit of IBM Corp.
Gary Lopez described remarkable gains at Cordis maquiladora Cordis de Mexico SA de CV in Ciudad Juarez. The site has more than 25 production lines.
>From 2003-06, total productivity improved 73.4 percent, volume grew to 15 million units from 6 million and yield increased to 92 percent from 85 percent, said Lopez, manager of Cordis plants in Ciudad Juarez and Miami Lakes, Fla. Both sites focus on catheters and stents.
Simultaneously, the company reduced its space in Ciudad Juarez from 185,000 square feet to 112,000 square feet and its inventory from 48 million units to 19 million units.
Employment, now about 1,700, also dropped.
``A relentless obsession for continuous improvement is the key,'' Lopez said. ``Stretch goals are now incorporated in all stable environments.''
The process was painful at times. ``We lost 50 percent of our supervisors in moving from the batch mode to the [continuous-improvement] process,'' Lopez said.
Three work cells with clean room conditions produce 1.6 million guiding catheters per year. As viewed on a tour, Ciudad Juarez workers injection molded the devices on 30-ton Newbury presses and fused 40-inch lengths of braided wire with a polytetrafluoroethylene tube assembly.
The Cordis facility won a 2007 Shingo Prize for Excellence in Manufacturing and a 2006 IndustryWeek magazine best-plant designation.
In early 1996, health-care giant J&J acquired Cordis, now part of J&J's medical devices and diagnostics segment.
In Chihuahua, an operation of ophthalmic industry giant Essilor experienced significant losses in 2004-05, repositioned operations in 2006 and has regained momentum, said Alain Robert, managing director of Sofi de Mexico.
In lens production, Sofi casts lightweight thermosetting allyl diglycol carbonate resin, which is known as CR39, between glass molds in a steel tool.
Global influences pushed the Sofi de Chihuahua SA de CV plant toward production of high-index lenses while yielding other work to lower-labor-cost Essilor plants in Asia. The changes included Chihuahua absorbing some production from a St. Petersburg, Fla., plant that closed in 2001.
Sofi in Chihuahua made 18 million lenses with 1,120 employees in 2000. It projects 2007 production of 14.7 million lenses with about 700 workers.
Robert and his team created a continuous-improvement department in December.
Essilor is based in Charenton-le-Pont, France.
Foxconn Mexico Precision Industry Co. SA de CV in Chihuahua is ``constantly reinventing processes'' in manufacturing cellular telephones, said Fernando IbaÃ±ez, plant manager.
Beyond agility, adaptability and alignment, managers of the facility are learning to involve more than 8,000 employees in the demands of a socially responsible supply chain, IbaÃ±ez said.
Foxconn in Chihuahua makes cell phones for Motorola Inc., Nokia Oyj and joint venture Sony Ericsson Mobile Communications AB.
In 2008, Foxconn expects to add production for Samsung Electronics Co. Ltd.
At the same time, ``we are trying to diversify'' into other product lines, IbaÃ±ez said.
Parent company Foxconn is based in Tucheng, Taiwan.