Kim Adams Jeff Boynton Julie Nguyen Henry Wei Prof. Greco Finance 570

Kim AdamsJeff BoyntonJulie NguyenHenry Wei

Prof. GrecoFinance 570

•Company background

•Quality overview

•Offshore outsoucing

•Conclusion

Company Background

• Mer-Mar is a well established, Southern California contract manufacturing and assembly company

• Servicing the Southwest with high quality manufacturing for over 30 years

• Located in Hesperia, California

• Maintained customers for over 20 years

Company Background

• Mer-Mar is a quality supplier– ISO-9001 certified in 1999

• Employs 50 devoted workers– All employees receive full benefits– Many team members have been with Mer-Mar for

20+ years

Company Background

Company Background

• Mer-Mar principals are “second Generation owners”– John Merell, President

• 25 years at Mer-Mar in operations

– Jeff Menkes, VP• 20+ years in electronic design of IC’s and PCB

Mer-Mar Markets

• Mer-Mar has been profitable every year for over 30 years specializing in the following markets:

– Medical Electronics– Aerospace– Automotive– Entertainment and Leisure– Homeland Security

Mer-Mar’s*Products

* Competitors*Quality Overview

Mer-Mar Product Overview

• Mer-Mar products include:

– Electronics Assembly– SMT through-hole, BGA, Flip Chip– Mechanical Assembly– “Box Build”

Competitors

• Direct– Golden West Technologies– Probe Manufacturing

• Regional

• National– Flextronics– Sanmina

Core Competencies

• Core competencies– Flexibility

– Quality

– Reliability

• Competitive Advantage– High desert location

Mer Mar’s Capabilities

• 22,000 sq. ft Facility– 3 shift capability

• Extensive Test capabilities– Mer-Mar equipment

– Customer provided equipment

• Capable of turning boards within weeks from complete material receipt

Review of Customer Requirements

• Assurance that customer requirements are met by:

– Contract Review at receipt of purchase order

– Customer Purchase Order Planning– Purchase Order Compliance Inspection

– Receiving Inspection

– Board Level Inspection

– Testing

Process Control

• Process Control is accomplished by– Assembly aids– Review of machine settings before each job– Inspection at numerous steps in the process

– Equipment Calibration

– Quality Improvement Team Review• Process Review

– QITCAR (Quality Improvement Team Corrective Action Report)

– Internal Audits

Mer-Mar&

Offshore Outsourcing

MerMar & Outsourcing

Mer Mar currently does NOT

offshore outsource

Why Mer-Mar chooses not to outsource

• Product offering characteristics– Low to medium volume

– High mix

– High “touch” assembly

– Requires automation and skilled labor

Why Mer-Mar chooses not to outsource

• Quality– Eliminates potential for increased failure rates

– Critical nature of products

Why Mer-Mar chooses not to outsource

• Customer service– Personalized

– Quick turnaround orders

– Prompt response to service calls

Why Mer-Mar chooses not to outsource

• Proximity– Eliminates potential long lead time

– Spares readily available

– Eliminates customs barriers

Why Mer-Mar chooses not to outsource

• Workforce concerns– Training

– Language Barriers

– Loyalty to many long-term employees

MerMar & Outsourcing

Dedication to producing American-made products using American workers

Why Mer-Mar chooses not to outsource

• Threat to U.S. economy– American pride

– Unemployment rates

– No regulation

Mer-Mar’s views on Outsourcing

• Offshore outsourcing is not for every company

• Outsourcing “makes sense” for high volume consumer goods

• Companies often rush to follow outsourcing trends

• Outsourcing companies often do not consider soft costs

Conclusion

Conclusion

• Mer-Mar does not consider offshore outsourcing a viable option

• Mer-Mar feels threatened by outsourcing trends but believes customers will continue to rely upon them based on their core competencies

Conclusion

This concludes our presentation.

Questions ????