EMC runs a lean operation: Playing hockey with doughnut holes

I had the opportunity to visit EMC’s manufacturing facility in Apex, NC this afternoon.  Brent Taylor, who I met the week before at Procurement Leader’s, took me on a tour of the plant.

One of the first interesting things about EMC is that like many other manufacturers in the industry, EMC’s demand is highly cyclical, and has a “hockey stick” effect at the end of the quarter.  50% of revenue shipped takes place in the last 3 days of the quarter.  As Brent describes it, “part of it is the way we sell, and customers are looking for the best deals, and so it is a game we always play!”

To cope with this hockey stock effect, EMC has a highly lean and flexible manufacturing facility.  The company has a large open space in the center of the facility called the “doughnut hole” – which is essentially a 10-15% buffer area that they can use to accommodate any sudden surges in demand that might come up.  They also have almost all of their assembly and kitting cells on rollers, meaning that it can be moved around on a moment’s notice, oftentimes over a weekend – to cope with a sudden unexpected demand for a product.

They also use a “inventory train” concept – which is a cart with rolling stock.  The cart goes around the factory, and identifies empty kanbans that are required to pull material.  The material is then pulled from a “supermarket” stock on the floor – which in turn triggers a replenishment from the warehouse that is next door.  The warehouse in turn triggers replenishment from suppliers.  Major suppliers include Flextronics, Jabil, and Foxconn…contract manufacturers who produce finished components that are then assembled, configured, and tested for major server clients.  EMC serves a lot of large corporations and universities that want servers that are literally “plug and play”.

The facility operates in a constant state of readiness, and must deal with a high degree of demand variability.  EMC is also actively engaged in sustainability initiatives, which is a big driver in the server market.

I learned a lot this afternoon – and hope to learn more in the coming months!