SKIRMISHER

In August, 2005, as Microsoft was gearing up production, an engineer raised a hand and said, “Stop. You have to shut down the line.” This wasn’t just a brief moment. The engineer spoke up repeatedly.

That engineer, who asked not to be identified, had deep experience in manufacturing. When production results were really off kilter, stopping a line and tracing a problem back to its roots was the answer. But the higher-ranking engineers, managers and executives chose to risk going forward. There wasn’t a universal backlash from the engineering ranks, according to one engineering source.

Nobody listened to that engineer — who spoke on condition of anonymity — apparently because console launches are always hurried affairs. Yields — the percentage of working products in a given batch of total products produced — generally start low. As the manufacturers conduct statistical analysis and tight controls on every step in assembly, they learn how to drive the yields up.

Still, the picture wasn’t pretty. The defect rate for the machines was an abysmal 68 percent at that point, according to several sources. That meant for every 100 machines that Microsoft’s contract manufacturers, Flextronics and Wistron, made at their factories in China, 68 didn’t work. At the recent dinner, Bach denied that there was a big concern about defects at that point in time.

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