Applying Lean Principles to Supply Chain Management

The seminar entitled “Lean Thinking for Supply Stream” was organized by Institute for Supply Management – Pearl River Delta (ISM-PRD) and co-organized by Hong Kong Society for Quality (HKSQ) on 29 October 2010. This talk shared the lean supply chain management including strategic sourcing, supplier quality, supplier development in lean manufacturing and cost management.

In the beginning, Mr. Daniel Chan (the President of ISM-PRD and Global PCB Council Chairman of IBM China / Hong Kong Limited) gave an opening speech and introduced Dr. Marcus Chao.

We were honor to invite Dr. Marcus Chao as the speaker and he is the Founder & CEO of Lean China Enterprise (LEC), an affiliate of Lean Global Network. LEC is a non-profit organization aiming at promoting and educating lean practices in Great China.

Firstly, Dr. Chao explained what Lean Thinking was. There were four steps:
i) Focuse on customer needs (Customer Expectation)
ii) Define current value stream process and stabilize its current state (Understand Process)
iii) Go to Gemba to find problems and eliminate wastes (Find Gap and Wastes)
iv) Continuous improvement based on PDCA (Remove it)

Dr. Chao said creating a lean supply stream were to minimize waste and maximize value that was a key competitive advantage.

Dr. Chao introduced Lean Supply Stream was considered the following elements in every step.
Valuable – Henry Ford, Taiichi Ohno, Business Process Re-engineering
Capable – Total Quality Management, Six Sigma
Available – Total Productive Maintenance
Adequate – Theory of Constraints
Flexible – Toyota Production System

Three important concepts “Flow”, “Pull” and “Leveling” were mentioned by Dr. Chao.

Dr. Chao stated Toyota was the most advanced Lean Supply Stream that 300 suppliers from mostly first and second tier were cooperated for last 60 years (very stable group). Toyota used equity interlocked policy. For traditional companies relationship with supplier companies, they were short-term, price-based and minimum information exchange and visibility in the same value stream.

Then Dr. Chao introduced two critical enablers for customer companies to change relationships with suppliers below.
i) Cost management: Target pricing to achieve lowest total cost of ownership
ii) Supplier Development: Joint supply stream analysis to make sure every step is valuable, capable, available, adequate and flexible, as well as, linked and coordinated by flow, pull and leveling.

One of important practice called “Gemba walk” which should involve every company and department touching the supply stream to verify the “current state”, to envision ta short term “future state” and to develop a longer term “ideal state”.

Finally, Dr. Chao summarized the strategies to apply Lean Thinking in the following points:
· Build a reasonable size of supply base
· Quality first
· Cost management
· Supplier development
· Lean Logistics

During Q&A session, some participants questioned if reduced number of suppliers, they would communicate with each other to raise the price. Mr. Daniel Chan shared a hybrid concept to adopt part of Lean principle because of culture deviation. Another question was about Toyota recall case, Dr. Chao replied that it was because Toyota expanded to fast to control and their suppliers were not ready.

At the end, Dr. Chao introduced two books named “The Gold Mine I” and “The Gold Mine II” written by Freddy Ballé and Michael Ballé to us.

Mr. Daniel Chan represented ISM-PRD to present a souvenir to Dr. Marcus Chao.

I represented HKSQ to present a souvenir to Dr. Marcus Chao.

After the seminar, we had a dinner with Dr. Chao, ISM-PRD executive members and HKSQ ex-co members.

For more information:
Lean Enterprise China: www.leanchina.org/en_index.asp
ISM-PRD: www.ismprd.org
HKSQ: www.hksq.org


Lunch with Dr. Ronald Sequeira

I am very happy to meet my MPhil supervisor Dr. Ronald Sequeira and we had lunch in CityU Chinese Restaurant in the City University of Hong Kong today. We took a photo before lunch outside CityU.

Dr. Ronald Sequeira is my Research Enlightener since 1994. Before studying MPhil. in Chemistry (Atmospheric Chemistry), I was appointed by Dr. R. Sequeira as Part-time Research Assistant under the project entitled “Validation of Available Hong Kong Aerosol Data for Preliminary Analysis and Interpretation with Reference to Air Pollution and Atmospheric Chemistry” from Nov 1993 to Oct 1994. In this period, I was undergraduate student of BSc. Applied Physics. Why Dr. Ronald Sequeira employed me? It is because my background was like him that studied both Physics and Chemistry.

My MPhil thesis title was “Detailed investigations on the inorganic chemical constituents of atmospheric aerosol and various deposition in Hong Kong” and I graduated in 1997. I was also appointed as part-time Research Assistant in the project named “Investigations on the Persistent Poor Visibility in the Hong Kong Atmosphere” from Feb to Jun 1997.

I took a photo with my supervisor in front of the Department of Biology and Chemistry today (29 Oct 2010) and compared the photo we took in 1997.

Photo in 2010

Photo in 1997

How time flies! But my supervisor does not change. He is still wise and funny. One important thing is that he is still researching in his interested topic.

One of Dr. Ronald Sequeira famous papers was “Monsoonal deposition of sea salt and air pollutants over Bombay“ in 1976.

R. Sequeira and K.H. Lai (1998) “The effect of meteorological parameters and aerosol constituents on visibility in urban Hong Kong” Atmospheric Environment, 32, No.16, pp2865-2871.
R. Sequeira, M.R. Peart and K.H. Lai (1996) “A Comparison between Filtered and Unfiltered Atmospheric Depositions from a rural area in Hong Kong” Atmospheric Environment, 30, pp3221-3224.


CityU Materials Science Students visit HKSTP

I am glad that Dr. Dan Chiu (Department of Physics and Materials Science, City University of Hong Kong) and his students visited Hong Kong Science and Technology Parks (HKSTP) on 28th October 2010. It aims to introduce the science and technology development in Hong Kong to science students.

Firstly, I introduced the HKSTP and the quality management system in Technology Support Centre (TSC) to students, including ISO 9001, OHSAS 18001 and ISO 27001 certification, as well as, HOKLAS (ISO 17025) accreditation. After that, students visited our different laboratories such as Probe and Test Development Centre (PTDC), Reliability Laboratory (RL), Wireless Communications Test Laboratory (WCTL), IC Failure Analysis Laboratory (ICFAL), Material Analysis Laboratory (MAL) and Biotechnology Support Laboratory (BSL)

After that they visited the Charles K. Kao Auditorium (Golden Egg) of HKSTP and took photo for memory.

We took photo inside Golden Egg. (It has around 280 seat.)

During visit of BSL, students are very interested in the door design for dark room (Avoiding light leakage) and disinfection process using autoclave.

Many students in pure or applied science were found without the training on Quality Management. Therefore, Hong Kong Society for Quality had arranged a certification course entitled “Quality Management for Laboratory” to CityU’s student every year.

Recently, School of Energy and Environment, City University of Hong Kong moved into HKSTP. It aims to be a leading School in the Asia-Pacific region specializing in cutting-edge research in energy and environment and in the training of energy and environment professionals.

Department of Physics and Materials Science, City University of Hong Kong: http://www.ap.cityu.edu.hk/index.aspx?id=20061207152852&lang=e
School of Energy and Environment: http://www6.cityu.edu.hk/see/
HKSQ Training Course - http://www.hksq.org/nevents.htm#seminars


Introduction to European Foundation for Quality Management (EFQM) Excellence Model

The seminar entitled “Introduction to European Foundation for Quality Management (EFQM)” was organized by Hong Kong Society for Quality (HKSQ) and co-organized by America Society for Quality (ASQ) on 25 October 2010. The model was launched in 1991 and based on the fundamental concepts of excellence. The details of seminar were summarized for sharing.

Ms. Carla Guerra (Programme Manager of Partnerships and Publications, EFQM) was the speaker and her topic included introduction of EFQM model and EFQM membership foundation.

In the beginning, Ms. Guerra briefed EFQM model through 9 steps.

The 1st step was ONE Model. It included Body of Knowledge (BoK) about sustainable high performing organization, as well as, organization beliefs and values. It used a framework to align and benchmarking with others.

The 2nd step was TWO Sides. The framework separated into Enablers and Results. Enablers contained different working approach which could impact the result. Results demonstrated organization performance in the past, present and future.

The 3rd step was THREE Dimensions such as Concepts, Criteria and Comparison.

The 4th step was FOUR Stakeholders to be balance. They were Shareholders, Customers, People and Society.

The 5th step was FIVE Enablers.
Leadership: the power of make it or break it
Strategy: to plan and follow-up
People: staff connecting the resources with the processes
Partnerships & Resources: all things needs
Products & Services: results obtained

The 6th step was SIX Working Practices / Criterion Part
There were 132 working example for member sharing.

The 7th step was SEVEN Questions on Enabler and Results.

The 8th step was EIGHT Fundamental Concepts.
i) Achieving Balanced Results: a balanced set of result met both the short and long term needs.
ii) Adding Value for Customers: create value by understanding and anticipating customer needs and expectations
iii) Leading with Vision, Inspiration & Integrity: Leadership to shape the future and make it happen
iv) Managing by Processes: structured and strategically aligned processes using fact-based decision making
v) Succeeding through People: culture of empowerment for the organization and personal goals
vi) Nurturing Creativity & Innovation: continual and systematic innovation by harnessing the creativity of their stakeholders
vii) Building Partnerships: built trusting relationships with various partners to ensure mutual success
viii) Taking Responsibility for a Sustainable Future: culture and ethical mindset, clear values and the highest standards for organizational behaviour.

The 9th step was NINE Criteria.
For Enablers: Leadership, People, Strategy, Partnership & Resources and Processes, Products & Services
For Results: People Results, Customer Results, Society Results and Key Results

Then Ms. Guerra introduced what is EFQM.
EFQM is a global non-for-profit membership foundation based in Brussels, Belgium since 1989. With more than 500 members covering more than 55 countries and 50 industries, they provide a unique platform for organizations to learn from each other and improve performance.

EFQM had three competencies including Assessment, Accelerating Learning and Bringing Diverse Companies Together.

EFQM had four key services.
Assessing – Plot your progress
Sharing – Exchange your experiences
Training – Treasure your talent
Recognition – Celebrate your success

EFQM has more than 500 members, some members showed below.

After the presentation, Mr. Humphrey Lee (Vice-chairman of HKSQ) shared his experience on EFQM in Philips. Many discussions performed with Ms. Carla Guerra in this session.

I represented HKSQ to present a souvenir to Ms. Guerra.

I also received a souvenir from Ms. Guerra.

For more information:
HKSQ: http://www.hksq.org/
EFQM: http://www.efqm.org/

Seminar on Support to Testing and Certification Industry

The seminar on Support to Testing and Certification Industry was organized by Hong Kong Council for Testing and Certification (HKCTC) and co-organized by Association of Construction Materials Testing Laboratories, Hong Kong Association of Medical Laboratories, Hong Kong Association of Testing, Inspection and Certification (HKTIC) and Hong Kong Productivity Council (HKPC) on 25 October 2010. I attended the seminar and I would like to summarize it for sharing the valuable topic to industries.

The first speaker was Prof. Ching Pak-chung (Chairman of HKCTC) and his topic entitled “Update of Work of the Hong Kong Council for Testing and Certification”. Prof. Ching said the vision of HKCTC was “Hong Kong to develop into a testing and certification hub in the region by reinforcing the branding of Tested in Hong Kong, Certified in Hong Kong.”

Prof. Ching mentioned that Hong Kong Accreditation Service (HKAS) recruited additional staff and a new accreditation service such as ISO 22000, reference materials producers, examination of herbs and forensic areas were developing. Moreover, career talks in several universities were organized. HKCTC had linking up universities, Vocational Training Council (VTC) and the industry to promote more internship opportunities for students. Moreover, HKCTC worked with ICAC, VTC, Gov Laboratories (GL) and HKAS to organize different technical seminars.

When Prof. Ching talked about panel on promoting Testing and Certification Services in the Chinese Medicine, he introduced Dr. Lai who was a panel convener.

Then Prof. Ching said to promote “Tested in Hong Kong, Certified in Hong Kong” in different trade fairs through HKTDC’s Platforms. The following activities will be performed:
For Location:
· HK International Building and decoration Materials and Hardware Fair (27-30 October 2010)
· World SME Expo 2010 (2-4 December 2010)
· HK Toys and Games Fair (10-13 January 2011)
· HK Fashion Week for Fall/Winter (17-20 Jan 2011)
· HK House ware Fair (April 2011)

For Overseas:
· China Hi-Tech Fair, Shenzhen (16-21 November 2010)
· International Consumer Electronic Show, Las Vegas (6-9 Jan 2011)
· Spilwarenmesse International Toy Fair, Nunbery (3-8 February 2011)

At the end, he briefed the first step for laboratories to undertake testing work for China Compulsory Certification (CCC) System through Closer Economic Partnership Arrangement (CEPA) – Supplement VII.

The second speaker was Mr. Tsang Kam-lam (General Manager, Env Mgt Division, HKPC) and his presentation title was “Support by Hong Kong Productivity Council to Testing and Certification Industry”.

Mr. Tsang said HKPC was established in 1967 as a statutory organization and responsible to promote productivity excellence to Hong Kong firms. Mr. Tsang said there were two major objectives recently. They were reduction of carbon and upgrade to transform the existing industry.

The first key initiative was cleaner production partnership programme.

The second key initiative was Hong Kong TURN Programme.

HKPC had strong technological capabilities included 28 Centres of Excellence and some achieved HOKLAS accreditation.

Then he introduced four key HKPC’s support to the testing and certification Industry.
i) Capacity Building (development of professional recognition scheme and involving of Hong Kong Qualification Framework)
ii) Collaboration in the Development of New Testing Methods and Certification Schemes
iii) Facility Sharing (e.g. EMC Lab, Reliability Lab, Watch & Clock Lab and Odour Lab)
iv) Market Promotion by Strengthening Connection with Manufacturers in PRD

Ms. May Fan (Deputy Programme Coordinator – Business Sector, Independent Commission Against Corruption – ICAC) and her presentation entitled “Ethics in Practice” which included “Importance of Professional Integrity”, “Prevention of Bribery Ordinance”, “Proper Handling of Ethical Challenge” and “Corruption Prevention Services of ICAC”.

Professional Integrity was the core value in the Testing and Certification Industry.

Ms. Fan said Professional Integrity, Quality Assurance and High Efficiency were three key elements to form Hong Kong Brand.

In order to ensure fair-play, protect interest of stakeholders and prevent breach of trust between agent and principal, Prevention of Bribery Ordinance established to control corruption. To prevention accepting bribe, 4As examination should be concerned.
4As – Agent, Accepts, Act and Approval

Ms. Fan said the definition of Advantage (in Section 2 of PBO) included the followings: Gift, loan, fee, reward or commission; employment or contract; payment, release or discharge or loan or liability; service or favour, as well as, exercise of any right or power. However, entertainment could be exception if food or drink for immediate consumption on any occasion.
For testing and certification, four prone areas were identified in the following diagram. Moreover, false document (false report / record) was involved in section 9(3) of PBO.

Then Ms. Fan showed an example that the typical case in China. In this case, it is still illegal because C was not notified. The following points should be noted.
· A director is an agent
· Importance of written company policy
· Principal’s permission subject to scrutiny
· Indirect acceptance of bribe
· Jurisdiction of Prevention of Bribery Ordinance
· Custom and practice not a defence

The following diagram showed the corruption prevention plan.

After that I raised one question related to management system consultant firm and certification body (CB). The industrial practice was that consultant firm got commission from CB (usually >10%) if consultant introduced their customer to CB.

Mr. Fan said consultant became an agent of the customer, so customer should be informed and agreed, even though bosses of consultant firm and CB agreed.

Mr. Francis Leung (Manager – Product Standards, HKAS) was the fourth speaker and his titled named “Services of Product Standards Information Bureau”.

In the beginning, Mr. Leung introduced Hong Kong’s Practice on Standards and different types of standards.

Then he briefed the support services of Product Standards Information Bureau (PSIB) including offer of standard documentation and copy.

Product Standards Library was open to the public.

Lastly, Mr. Leung mentioned that PSIB represented Hong Kong in Asia-Pacific Economic Cooperation Sub-Committee on Standards and Conformance (APEC SCSC), International Organization for Standardization (ISO) and Pacific Area Standards Congress (PASC).
The last speaker was Mr. Kenneth Wong (Manager – Technopreneurial Funding, ITC) and his presentation was “Small Entrepreneur Research Assistance Programme (SERAP)”.

Firstly, Mr. Kenneth introduced the Innovation and Technology Fund which was launched in 1999 with 4 funding programmes.

Then Small Entrepreneur Research Assistance Programme (SERAP) was introduced. SERAP fund could provide seed money up to HK$4 million which based on dollar-to-dollar matching. Usually, the project period should be within 24 months and it did not take equity interest or share in Intellectual Property Rights (IPR). Some assessment criteria were stated.

Finally, Mr. Wong mentioned the “Cash Rebate Scheme” which used to encourage local R&D investment.

Tour of Facilities in HKPC was arranged at the end.


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