ANADIGICS, Inc (NASDAQ: ANAD) is a leading provider of semiconductor solutions in the broadband wireless and wireline communications markets. The company pioneered commercial applications for GaAs ICs. This award winning company is ISO 14001:1996 certified.
ANADIGICS was operating on a 24/7 basis and the plant was “sold out.” Whatever it produced was sold, which is why the company needed to address the capacity issue in order to improve delivery to its key customers or lose their business. In addition, the company had unacceptable yields and quality excursions. By Q3’2008, customers were beginning to look elsewhere for their product and the effects of this loss was realized in declining ANAD stock price. ANADIGICS needed to implement production changes to regain a competitive edge in the market and turn its declining stock price around.
ANADIGICS met with NJMEP to discuss implementing Lean Manufacturing as a means to resolving their situation. As a result of that meeting, NJMEP conducted a Lean opportunity assessment. Implementing Lean was important because it is highly regarded. One of their top customers requested that ANADIGICS utilize Lean to improve their operational performance. In addition to the assessment, NJMEP identified funding to help with the transition to Lean and assisted ANADIGICS in the application for a New Jersey Department of Labor Customized Workforce Training Grant “NJMEP was instrumental in guiding us through the complex paperwork and developing a course listing that fit our needs. State funding allowed us to proceed with a comprehensive Lean plan at a pace that produced dramatic results. Had we not received state funding, our ability to implement Lean manufacturing training would have been curtailed by the declining business and the global downturn,” reported Douglas Dopp, V.P. Wafer Fabrication.
ANADIGICS worked with AMCG USA, part of the NJMEP consultant team who are experts at Lean implementation, to develop a formal implementation plan and communicated the plan to everyone in the organization. Initially there was great concern among the employees about the possibility of losing their jobs; the declining business had already resulted in work force reductions. “They didn’t understand the power of the Lean principles to impact business results, nor the value of the new skills they were being taught. Their jobs are more secure since they have additional skills and the factory is performing better than ever,” Dopp pointed out.
According to Dopp, Principles of Lean, 5S, and TPM have had the greatest affect to date. Dopp told us, “The Lean principles, one of which focused on the factory floor and the involvement of each employee in the improvement effort, created the most enthusiasm since employees felt a part of the change process. With 5S, employees received all the tools necessary to perform their job with high quality and proficiency.”
Factory cycletime, the time from the start of production to finish, dropped from 80 days to less than 50 days during the first grant time period. It has subsequently dropped to 30 days.
We asked Mr. Dopp if Lean helped reduce production costs and if so which process change has had the most impact. His response, “We have seen >30% reduction. Reductions in chemical use, rework reduction, yield enhancement and the ability to create more product with less direct labor (productivity enhancements) have lowered production costs. These improvements have allowed ANADIGICS to become profitable (Q2’10) earlier and at a lower revenue level. One of the principles of Lean is the elimination of rework. The elimination of rework resulted in the reduced use of chemicals and the reduction of chemical waste. ” he added.
Implementing Lean at ANADIGICS has been a continuing process of improvement and they are becoming more aggressive in the improvement efforts. As a result, the company achieved lead-time reduction, and quality improvement. They have won back customers and business is now growing faster than that of its competitors.
ANADIGICS began its Lean transformation Q4’08. The company had experienced a major decline in its stock as a result of its customers walking due to delivery and quality issues. The new Lean business model changed all that. ANADIGICS’ stock has been climbing back ever since, largely due to the operational improvements made through Lean.
As a result of its success, ANADIGICS applied for and received a subsequent grant of $428K. The funding will enable ANADIGICS to train the rest of the company. They also intend to rollout Lean to the other elements of the supply chain and to its business partners as part of its commitment to continuous process improvement.