Solutions for Profits Seminar (I)

I joined a seminar entitled “Solutions for Profits” which was organized by International Supply Chain Education Alliance (ISCEA) on 18 Oct 2008. The speakers were my classmates in Certified Lean Master program who shared their project and achievement.

In the beginning, Mr. Henry Soo (Director of Operation, ISCEA.HK) gave an opening speech called “Story: Who touch my cheese?” He demonstrated “Harmony Couple” through “Satisfactory allocation” and “Win-win solution” by using “holistic operation mechanism and education for people to achieve problem solving capability”.

The keynote speaker, Mr. Mike Sheahan (Authorized CLM tutor) gave a talk named “Peak Oil: The impact on Global Supply Chains”.

The following points were summarized.
· Hubbert’s Law: Once you extract half the oil from a given field, production begins to decline.
· Non-energy cost reduction
- Even higher levels of quality
· Agility / Quick Response
- Reliable delivery / small lots
· Eliminate waste

He also introduced TLS which was a strategy combined TOC, Lean & Six Sigma.
TOC:
· Constraint: Energy supply & cost
· Get the most from what you have
· Seek alternative
· Maximum throughput
Lean:
· Focus on Value Added process
· Reduce Non Value Added process
· Quicker delivery of mixed loads
Six Sigma:
· Uncover hidden problems
· Correct root cause
· Reduce variation

He also quoted Mr. Masaaki Imai’s (President of Kaizen Institutes) 3 important conditions for Kaizen strategy which were:
1. Top Management Commitment
2. Top Management Commitment
3. Top Management Commitment


The second speaker was Mr. Tom Ho Fai (Engineer, SAE Magnetics (HK) Ltd.). His project aimed to improve equipment maintenance efficiency and parts inventory. Some problems were identified such as manual records and manual daily data input, inaccurate inventory quantity, sudden machine down and no parts number, etc.

Create Flow – Information flow
· Using barcode system & system record instead of manual
· 5S
Leverage Pull
· Pull signal for part request
· Reduce engineer time in search parts

He obtained improved results as shown below:
· Warehouse management system implementation and value added (VA) ratio increased from 3.8% to 4.3%
· Store keeper efficiency enhancement that In/out process time reduced 70%
· Data handling and PR follow-up time reduced 75%
· Inventory accuracy improved from 95% to 99.5%

Tom concluded the key success factors were:
1. Clear defined value and value stream
2. Promotion & education on lean mid-set
3. Communication

The third speaker was Ms. Lydia So (GM of Production, Tungtex (Holdings) Co. Ltd.). The product type of Tungtex was OEM & ODM of ladies fashion, skill apparel, shirt, etc.

She defined the specify values as follows:
· Delivery lead-time (DLT) is one of the prime concerns of customers (norm is 100day)
She found that the current situations are:
· Production is by bundle flow in large production line and high WIP (work-in-progress)
· Due Day Performance (DDP) is 85%
· Long change over time (~3 day)
· Re-work rate is high (>80%)

Then she employed lean principle to using value stream, one piece flow, U-shape production line, kanban / supermarket pull system, etc.
After that the productivity improved 83%; rework rate reduced from 8% to 0%; change-over time reduced from 3 day to 30 min.

Lydia shared the lesson learnt as follows:
· Top Management Commitment
· Team work & front line staff participate
· Effective training before implement
· Strong logistic support is required
· Lean transformation is basically a cultural change

The last topic was TOC success story presented by Mr. Gary Chui (TOC Manager, Sabrina Scala Leatherwear Ltd.). He shared TOC experience to us such as Current Reality Study (CRS), Thoughput Dollar Day (TDD) and Simplified Drum-Buffer-Rope (SDBR) & Buffer Management (BM), etc.

Gary reported the result after the TOC project as follows:

1. WIP reduction 70%
2. Production lead time reduction 65%
3. Due-date performance 100% over 180 days (means that Throughput Dollars Days as zero over 180 days)
4. Throughput and Net Profit for the improved centre were increased with over 50%
5. People teamwork and collaboration are getting highest level compared with last year.

In his conclusion, he used the statement from John Foster Dulles - "The measure of success is not whether you have a touch problem, but rather if it is the same problem that you had last year."

Their future plan in process of on-going improvement with ultimate goal is making the current total sales level equals to Net profit in next 4-6 years.

The seminar was very success and we were looking for the second section on 22 Nov 2008.

For more information, please visit http://www.iscea.hk/ .