Endicott Interconnect Technologies, Big Blue background

Manufacturing in Action, Source : The Manufacturer US
Published : June 2006

Endicott Interconnect Technologies combines an IBM heritage with investments and forward thinking to compete in the marketplace. Linda Seid Frembes finds out more

During the computer boom of the last 30 years, many technology companies left their indelible mark on small towns and big cities across the country. Such is the case in Endicott, NY, the birthplace of computing giant IBM. With a population of 13,000, Endicott’s community was closely tied to the happenings at the local interconnect plant. So when IBM announced plans to divest its interconnect business in Endicott, a group of Binghamton-area business owners decided to acquire it.

On November 1, 2002, Endicott Interconnect Technologies, Inc. (EIT) was fully divested from IBM. “We came into work that day and it was the same equipment and the same people, so operations were easy to turn over,” said Jim Fuller, vice president, PCB and semiconductor packaging fabrication. “But we were disconnected from the IBM support backbone, like HR and IT. It was in those areas that we needed to invent from scratch.”

The 1,500 employees quickly learned the ropes and have developed EIT into a global supplier of chip packaging, printed circuit boards and electronic assemblies, electro-mechanical equipment, and technical services. “The people who work here have a unique enthusiasm. It’s a small town, and many people have been here for more than 15 years,” noted Fuller, who has been employed at the plant for 23 years.

But to understand EIT’s enthusiasm and dedication, one must look at the company’s products. EIT’s printed circuit boards (PCBs) are 24 inches by 28 inches in size and up to a quarter inch thick. These types of PCBs are used for extremely mission-critical applications in the medical, military, aerospace, and financial markets. To service these markets, EIT focuses on core manufacturing competencies that include glass impregnation, photomask production, standard/high-temp laminations, drilling (laser and mechanical), plating (copper, gold, tin/lead, palladium, nickel), testing, component placement, and precision tooling. “We also manufacture printed wiring board and chip carrier substrate in the same facility,” Fuller added, “while other companies may do that separately. It’s difficult to get both products on the same line, but we can do it due to our investment in technology and our high-end capacity.”

Raw materials for the Fabrication Group include basic plating and etching chemicals; some are replenished using min/max, while some are consigned. Laminate materials are unique to a customer, so the material depends on the product attribute. Fuller advises that his group keeps some protective materials in inventory “but not a lot.” Raw materials are managed using EIT’s SAP system.

For customer orders, the engagement process and incubation period are unique to each market. There is an initial sales pitch and then the development of a test vehicle (or test product). If the work is awarded, then the application engineering department will review it and help with the new product introduction (getting the first set of parts through the line). Several engineering groups remain involved until the new product passes the production readiness review, a series of quality and application tests. The order then is approved for unconstrained production and is scheduled for manufacturing as needed.

According to Fuller, EIT’s production floor is more cellular manufacturing than line-of-sight. “There are a variety of different routing schemes,” he added, “nothing is standard. We set up sectors based on the process, but some sectors do not change. For example, the plating lines cannot be picked up and moved very quickly. Some are located in two different buildings, since the Fabrication Group itself is spread across no less than 10 buildings.”

The company enjoys long-term relationships with its suppliers, with many dating back to the IBM days. Fuller explained that there are 10 vendors who maintain on-site office space so they can spend time in the organization and remain familiar with the operations. “Our big four are glass cloth, plating, copper, and drill bits,” said Fuller. “We keep a close relationship with our suppliers in these areas. Suppliers can make or break your operations.”

Since EIT’s customers rely on them for quality and reliability, those requirements flow back into the supply chain as well. EIT typically has a five- to 10-time better quality rate than others in the industry. As a result, suppliers are rigidly managed and cannot change the process or the locations. “If there are three tools but only two are approved for use with us,” Fuller noted, “then the supplier has to use those two.”

EIT’s certifications include ISO 9001:2000 and ISO 14001. “Continuous improvement is in the quality policy and in everything we do,” said Fuller. “We embrace six sigma techniques but not a formal program. Instead, we use those techniques as problem-solving tools. When you run a program, there is an expected end. We want our continuous improvement to be a continual organizational movement.”

Additional military certifications allow the company to be considered for military contracts. To bid for such work, EIT has to manufacture standardized test vehicles, which are then compared with the competition. “The industry has changed. PCBs have mostly moved offshore, so there’s a void of high-tech capabilities. Unlike our competition, EIT spends four to five percent of its revenue on research and development,” said Fuller. “There are military advances in technology that cannot go offshore, so we’ll be in a good position to get that business. Incubation time is two to three years, but it may be a 10- to 12-year program. Military technology needs to be tried and true, so it doesn’t change that often.”

In addition to the military market, EIT still ships to IBM facilities around the country. At the time of the divestment, 80 percent of EIT’s shipped product was for IBM, compared to 40 percent now. That percentage includes 11 different procurement streams into independent IBM divisions.

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