With far-sighted leadership, Micron EMS is set to touch new heights

An SME with a futuristic and holistic vision, Micron EMS believes in sustainability and that there are no short cuts to success. Today, it is in the process of backward integration in order to be a single window comprehensive service provider to its customers

By Srabani Sen

Friday, September 14, 2012: Few companies, particularly SMEs, manage to retain their pace of growth even during challenging periods like a global recession. Micron EMS is one of those rare firms that actually has managed the impossible, sustaining a growth rate of 22 per cent even during these recessionary times.

Started in 2003, in the heart of the silicon city of India—Bengaluru, Micron EMS is today one of the leading electronics manufacturing service (EMS) providers, focused on delivering complete end to end manufacturing solutions to technology companies.

Under the guidance of its managing director, Kalpana Naagaraj, Micron EMS has achieved considerable success in a short span of time. When Kalpana started her EMS business in 2003, although it had potential, it was not a sought after industry for a woman as it was almost completely

male dominated. Yet, she entered this space to make a name for herself. She faced a number of hurdles which she overcame by setting her own rules and benchmarks. She believes in smart leadership choice—“When you hire people who are smarter than you, you prove you are smarter than them,” she says.

As she says, “My ambition of starting an EMS company was reinforced after I worked in L&T Mysore, the most sophisticated of all electronics manufacturing giants, which gave me all that was necessary from a management a business perspective to kick start a professional EMS company that would cater to Indian clients.” Of course, she is technically sound and has perseverance to pursue her ambitions. The very best of the electronics manufacturing processes and business practices of L&T became the guiding path in laying the foundations for Micron EMS—with the core values of professionalism, transparency and honesty in all business transactions.

Operating principles

Employees at Micron EMS believe in transparency as the key to success. They have worked hard to develop a work culture that provides opportunities to learn, innovate and experiment with new ideas. “We provide excellent opportunities to our employees to think different, experiment and innovate as these are the key mantras to marching ahead in the industry,” says Kalpana.

Kalpana sharpened Micron’s strategic focus and improved its operating efficiency and execution, as well as its financial performance and customer focus. She has full confidence in her team, which consists of 80 highly qualified people. “In this business, people are the driving force. So we assembled the best team, and together we made a pledge to ourselves and to our customers to be a dependable EMS partner. This became the rallying concept around which we are committed to delivering quality and services that are unparalleled in our field,” she says.

Micron management values its people as its assets, and respects their knowledge and contributions. “Our success is because of the commitment and dedication of our workforce. The development and implementation of global quality standards is also the backbone of our company’s success,” says Kalpana.

The latest trends in technology are continually implemented within the organisation through audio visual training programmes with the belief that an educated workforce has a better capability to contribute value by generating innovative ideas and solutions at all the stages of an EMS solution.

Challenges encountered

Kalpana feels that success for today’s manufacturers depends on the ability to respond quickly to constantly changing customer demands—while keeping costs low and efficiency high. Yet effectively managing the “demand-driven supply chain” is highly challenging in today’s increasingly outsourced and complex environment. Both original equipment manufacturers (OEMs) and contract manufacturers (CMs) must now deftly orchestrate the activities of a diverse group of companies in addition to their own internal operations in order to meet customer requirements. Further she says, that the success of a small enterprise revolves around the entrepreneur and its employees, provided the employees are skilled and efficient.

As in any business, Micron EMS also faced many hurdles. “There were two main challenges—getting funds and finding the lateral hires with the right bandwidth to work comfortably for a woman. Now both are history, but being a first generation entrepreneur, I had my share of somersaults where I hit the dust and rose from the ashes with more grit. Now, Micron EMS can cater to the most stringent international standards of EMS services,” says Kalpana.

Adequate and timely supply of credit facilities is an important problem faced by smallscale industries. This is partly due to scarcity of capital and partly due to weak creditworthiness of small units in the country. Finance is always perennial shortage for any business. In her business’ infancy, Kalpana had no immovable collateral to offer to the banks and without any established business credit lines. “It was extremely difficult to convince banks about credit facilities during startup as there was no family legacy, and I was a first generation entrepreneur. Now we have overcome that problem as we have attained some critical mass,” she says.

Today, when she looks back, Kalpana believes that she owes part of her success to the shrewd, conservative officers of the State Bank of Mysore, who advised her on financial matters and funding. Over the years, she has acquired the financial and management acumen to take her enterprise to the next level of sustained growth.

Gaining the trust of customers was another challenge. Big firms were in operation when Micron EMS was set up. As a new entrant, it took a lot of effort to build trust with the customers.

Component availability is another major issue faced in the EMS industry. Component prices and availability are not uniform worldwide. Since the bill of material (BOM) cost makes up majority of the cost of an electronic assembly, efficient BOM pricing can yield significant savings. “We at Micron have consolidators in key regions of the world, allowing us to simultaneously price BOMs in multiple regions of the world. These consolidators then procure the components at the lowest cost and ship it to us. The cost savings from our efficient buying process is passed on directly to the customers,” she informs.

Kalpana realises that different products require different approaches for efficient and dependable manufacturing. Influencing factors include quantities/volumes, complexity, component mix and availability, level of design maturity, timeliness/demand cycles, business factors. To help meet the customer requirements, she has developed flexible and adaptable infrastructure, allowing her to offer comprehensive and best value solutions to the customers.

Another challenge faced by the company was the lack of a skilled workforce. Being a very highly skilled and process oriented business, when the company was established it had to recruit raw hands and train them intensely.

Sourcing electronic parts at a reasonable price and establishing its own facility at Bengaluru when real estate prices were soaring were some other hurdles the company had to cross.

Accolades all the way

Micron EMS is proud of its record for satisfying and retaining its customers. It has the ability to adapt to its customers’ needs within very short procurement cycle times. “We are highly transparent and our customers have the freedom to interact with the operations-in-charge directly, rather than going through the organisation’s hierarchy. We have retained our customers through our dedicated services, and so far, we have never lost a customer,” explains Kalpana.

Micron EMS has OEM supplies exclusively manufactured by us, with no second source for them. We have made a road map for applying for awards and getting ISO-14001, and 18001 within the next 12 months, she says.

“The company has some products that are self-certified, and have been audited/approved by its customers, wherein its quality is as good as or even better than those with certifications. We at Micron take a pragmatic approach to certifications, which we believe is a win-win strategy both for our customers and suppliers,” says Kalpana. “Our hybrid approach bringing our engineering, procurement and manufacturing infrastructure together with our procurement and manufacturing resources allow us to offer the customer significant overall cost savings,” she adds.

According to Kalpana, the setting up of a professionally managed enterprise is a huge achievement and her ability to identify lateral hires is a great source of satisfaction. Micron has started its journey of backward integration, and in this process, it has acquired a PCB unit for captive and market consumption. “We have expanded into the LED lighting arena as an OEM with high mix and high technology involvement,” she informs.

Micron EMS experienced a paradigm shift when it needed to find an effective way to deal with the oscillating cash flow that occurred as projects ended and new ones had not yet started. Growing the company to steadier critical mass did not appear possible. It appeared that either expanding by developing and manufacturing its own product or manufacturing products for someone else would be an appropriate solution to this dilemma. The answer came in 2005, when it did R&D work for an American company, which resulted in a big order from the US firm’s Indian counterpart. This was the turning point in Micron EMS’ growth and there has been no looking back since then.

Manufacturing facility and infrastructure

Micron EMS started its manufacturing unit in 2003. It has the inhouse capabilities to place 250,000 components per day with chip shooting and reflow, as well as 50,000 soldering joints per day, with facilities for ball grid array (BGA) rework and re-balling up to 55 x 55 mm packages. Single and double sided PCBs for captive consumption are also manufactured in-house.

Spread over an area of 2787 sq m (30,000 sq ft), its manufacturing unit is a total ESD safe environment, with facilities for SMT and through hole manufacturing, testing, packaging and delivery, including fine pitch QFPs, box building, systems integration, RoHS and lead free manufacturing, parts development, as well as sourcing from the Far East, USA and Europe. It has a high speed SMT line from Panasonic and an assembly line from Essemtec for flexible and fine pitch placement.

Strategy to sustain growth

Micron EMS relies heavily on the factors of trust and transparency in business to build confidence in its customers. According to Kalpana, sustainability in business is possible as the demand for locally manufactured products is increasing. Brand owners are outsourcing their manufacturing needs based on increasing flexibility in production, the need to reduce manufacturing costs and the time to market as product lifecycles get compressed. Other factors leading to sustainability in business are Micron’s eco-friendly manufacturing processes, RoHS offerings, CSR activities, end to end solutions, EMS related services, support offerings for particular sectors (like establishing markets, vendor development support, improving yields, and similar value creation for the customer). “We stay ahead of our competitors by creating a niche market, offering services related to EMS ODM, creating value for customers and by quickly attending to all their product related problems,” says Kalpana.

Micron is a member of the international Surface Mount Technology Association (SMTA). “The association’s publications and white papers on alloys and processes help us in adapting and fine tuning our current processes for better yield, which, in turn, aids us in adapting to very high quality standards,” points out Kalpana.

Ambitious plans

Under Kalpana’s guidance, Micron plans to venture into automotive embedded systems, which is a very niche field. With a vision for strategic and focused growth, the company is set to penetrate new arenas. “As per our strategy, we are focusing on expanding into the high mix and high technology EMS segment. We are also committed to improving our manufacturing processes and offer turnkey solutions to help our customers remain cost effective and concentrate on their core competencies,” explains Kalpana, who does not believe in gender based capabilities. “There are no rules as long as you are ethical and truthful to clients. One needs to take a holistic view since there are no short cuts to prosperity. We believe in the concept of ‘What we promise is what we give’. This attitude makes us a dependable EMS supplier,” she says.

“We also pursue our principle of ‘quality first and customer upmost’ and will keep on offering our customers with excellent service and steady support,” concludes Kalpana.

Various machines at Micron EMS plant

• Panasonic pick and place M/c up to 30,000 CPH
• Essemtec flexi-placer M/c up to 4000 CPH
• Essemtec reflow oven
• Zephyrtronics BGA rework and reballing machine
• Wave soldering facilities
• Backup reflow oven
• Full plant power backup
• General testing facilities
• Custom test jig development facilities

Services provided

Electronic manufacturing services

• Design, engineering and prototyping services
• High and medium volume and high mix production of printed circuit board assemblies (PCBAs)—both, through-hole and SMT
• ROHS and lead free manufacturing
• MCPCB design and manufacture
• Full box build/HLA/system integration and testing
• All types of parts development
• Rapid prototyping of parts
• Packaging design and supplies
• Testing facilities, specific customised test jigs
• Logistics support in line with INCOTERMS 2000

Energy management solutions

• Complete range of LED lighting systems—focus light, down lights, false ceiling lights, bulbs, tubelitghs, Low and high bay light, etc
• Solar based products
• Solar power systems—grid connected and non-grid connected

Micron EMS has a strong presence in medical systems, power metering, telecom, LED lighting, industrial controls, test and measurement, and access control systems. “As we are very strong on the technology side, we can offer excellent value added services to our customers,” says Kalpana. “To extend our bandwidth beyond this, we offer energy audits, propose green energy solutions and also e-waste recycling support as per WEEE requirements to our customers,” she adds.

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