Controlling the Max Stock level of Tajco.doc

controlling the max stock level of tajco 摘要宁波特艾科机械制造有限公司是一家丹麦独资企业，成立于2005年，是世界上顶尖的汽车排气系统扩充器供应商，产品销往欧洲、美国及澳大利亚。主要客户包括宝马、戴姆勒-克莱斯勒、大众、通用及沃尔沃等著名的汽车制造商。 近年来，中国工厂一直表现出强劲的发展势头，人员的的规模从原来的几个人增加到约400人。但事实上，近年来随着原材料和劳动力成本在不断提高，产品的售价却没有多大提升的空间， 故不断降低产品成本显得越来越重要。21世纪企业间的竞争是供应链的竞争， 供应链之间的竞争则是基于时间和客户需求的竞争， 而库存管理则是供应链中提高集成化， 敏捷化和快速响应市场需求的关键因素，库存管理直接影响供应链起点到终点的实际绩效。一方面，外部及内部各环节需要保证按时供应；另一方面流程各环节库存越小越好。因此，总部要求最大库存水平从原来100%的上减低到75%。本论文前期先对公司的库存量居高不下问题从物料需求计划运作现状和库存绩效评价进行分析。采取swot分析法分析现有的物料需求计划优劣点，优化了计划管理职能机构又从kpi角度分析如何提高和影响物料需求计划的绩效输出。经前期仔细的调查分析及切实可行的设计，中期认真地建设实施和后期的客观评估，本论文中的特艾科公司的库存问题得到显著改善，达到了目标值75%。实践证明，在经济全球化，竞争市场日益加剧，合作和双赢愈加需要，物流和供应链如火如荼的今天，完全可以通过降低库存成本，提高管理效率，增强企业竞争力。关键词：库存；物料需求计划；库存绩效指标，汽车排气系统扩充器abstractestablished in 2005, ningbo tajco manufacturing., ltd is the only manufacturing company of tajco, a headquartered in grindsted, denmark, one of the leading suppliers of tailpipes for the automotive industry worldwide, and provides products for bmw, daimler, chrysler, volvo, vw/audi and general motors corporations. these years tacjo manufacturing have got rapid development ,but in fact, with the continues increase of raw materials and labor cost, there is no much room to rise up the price of the product, that how to reduce product cost becomes more and more important. the logistics costs are large part of operating costs, reduce inventory costs is the most significant way to reduce the logistic cost. on one hand, the external and internal links need to ensure timely supply, on the other hand, the inventory must keep as small as possible. this year the headquarters request the max stock level need to be reduced to 75% from the original 100%. what this thesis writes first includes a review of problems of mrp and kpi. use swot to analyze the mrp making process and improve the responsibility and organization,. and build good kpi system to improve the current working process in practice.through careful investigation and analysis, operable plan in prophase, serious implement in metaphase and objective estimation in anaphase, the inventory of tajco has got significant improvement and the max stock level has been reduced to 75%. it has been proved that in the economic globalization, we can reduce the inventory cost to improve management efficiency then enhance the business competiveness.key words: inventory, mrp, inventory kpt, exhaust tailpipes for automotive industrytable of contentspages1. introduction 12. summary of preliminary research2 2.1 problem2 2 .2 problem analysis22.2.1 companys current situation22.2.2 need and want analysis32.2.3 swot analysis43. project objective and hypothesis53.1.1 project goal and objective53.1.2 project hypothesis54. project rationale55. project design 7 5.1 planning activities75.1.1 general planning75.1.2 time scale and person involved85.2 costing9 5.3 risk analysis10 5.3.1 person related 10 5.3.2 time related 10 5.3.3 payment related10 5.4 management and control116. project implementation11 6.1 general introduction of time, place of project implementation11 6.2 general introduction of time, place of project implementation11 6.3 mornitoring127. results and discussion12 7.1 results12 7.2 discussing148. conclusion15bibliography17appendix i. questionnaire18appendix ii. to do list19appendix iii. 204improving max stock level of tajco 1. introduction i am the vice logistics manager of tajco manufacturing., ltd. and have been worked here for 3 years. these years, we have got rapid development and become one of the leading suppliers of tailpipes for the automotive industry worldwide, and provide products for bmw, daimler, chrysler, volvo, vw/audi and general motors corporations. really with the increasing on price of raw material and labor cost, how to control the inventory cost becomes more and more important for us. in the end of 2011, the max stock level even reached 100% that headquarter requested that we must control the max stock level under 75%. in order to control max stock level under 75%, we must find out the reasons why we have so big inventory and try our best to optimize the current situation. it is believed that we can take measures to manage them. also as a logistics manager, it is my task and responsibility, and to prove my ability.2. summary of preliminary research 2.1 problemthe problem i am facing is that our max stock level is very high because of poor mrp running process and bad kpi system.2.2 problem analysis2.2.1 companys current situationl financial resources the total sales turnover is reached to rmb 600 million in 2011, and the annual growth rate is above 25%, the target sales figure will be rmb 700 m for 2012. the max stock level of 2011 is 100%, 2012 we got the demand to reduce this to under 75%,l human resourcesour company has more than 400 employees working in 7 departments, they are project dept., production dept., engineering dept., financial dept., logistics dept., quality assurance dept and hr&adm dept. logistics have 3 functions: purchasing, warehouse and import & export.l physical resourcesour company established since 2005, take up an area of 16,000 square meters in downtown ningbo. the traffic is convenient, about 5 minutes to highway, 15 minutes to railway station, 30 minutes to the ningbo international airport, 60 minutes to the beilun port and 3 hours to shanghai port .in our company, we have advanced machines to ensure the product quality and plenty of equipments to ensure on time delivery. ts16949, iso 14000 and ohsas18002 passed to provide quality and environmental standard.l logistics operation flow l mpr calculation flowl max stock level 2.2.2 need and want analysis to get a clear idea of the why we have so high max stock level, we have studied our work flow of the entire demand and supply chain management. here are the four layers1) the frame of demand and supply chain which contains assessing to the order and forecast, shipping and after-sales service.2) the planning process which is referring to the capacity plan, production plan, inventory plan and purchase plan.3) the execution is referring to the execution of the production, purchase, warehouse and logistics.4) the dealing with the aftermath is referring to the engineering change and rtv-suppliers. to follow this, we need to have main production planner to deal with the on time delivery, material planner to issue material order to purchasing, and daily production planner. production dept just needs to follow the production plan and adherence to schedule, purchasing just need to follow the material plan and focus on the on time delivery from supplier. that we can know the planners are really the “producers” of the inventory, and the target is to fulfill the need of production-material planning and the needs of customer-production planning. 2.2.3 swot analysis based on the results of situation analysis and needs analysis of the center, i came up with the following swot profile:strength the function of planning has been independent from warehouse in jan, 2012 and we have recruited the experienced one planning supervisors and 1 planners. the top management pays close attention to the planning process and we can get sufficient support. the direct cost from planning side is comparative lower, as the human resource and the information system related management cost are limited.weakness the output from mrp is not so ideal. the calculated demand is higher than the real demand which causes great stock inventory that freeze the funds, this is a main problem. the calculated demand is lower than the real demand which affect the planning schedule and the delivery schedule. the calculated delivery time is earlier than the real need time (normally it is 2 days) which causes the problem of goods storage and moving also freeze the funds. the calculated delivery time is later than the real need time which affect the planning schedule and the delivery schedule. opportunity in 2012, the planning function is independent and all planning will be handled to the function which is showing the planning are the core of the manufacturing process. threat the planning function is a new function and except one planner, the other 3 employee are all news that they need time to familiar with the company. currently planning is responsible for the mps, issue the material request to purchaser, weekly material call-in. and shipping schedule. the daily planning is responsible by the production dept.the situation is severe and we need to improve the responsibility and organizations. our ultimate goal is to have the max stock level under 75%. to achieve this goal, the company needs to deal appropriately with all of its weaknesses as well as some threats. if our company can make good use of its strengths, grasp some golden opportunities, avoid the threats, and overcome its weaknesses, we will realize this. the immediate objective of this project is to define the key factors causing the present problematic situation. 3. project objective and hypothesis3.1 project goal and objectivethe problem i am facing is that our max stock level is very high because of poor mrp making process and bad kpi system. the goal of my project is to improve the responsibility and organizations and set up a good kpi system to have the max stock level control finally. the objectives are to control the max stock level under 75%.3.2 project hypothesisan inventory is basically a detailed list of all the items in stock. inventory consists of raw materials, work-in-process and finished goods. in todays highly competitive market, businesses need to maintain an appropriate level of stock to meet the customer demands at any time. inventory management is part of the supply chain management. it is hypothesized that through improvement of the planning process and kpi, the max stock level will be reduced to 75% within two months.4. project rationalein order to have expected result to control the max stock level to 75%, we first need to optimize our planning responsibility and organizations, so i read some books and articles relevant to this subject. some of them impressed me so much, like what john cheng said. john cheng stressed the importance of planning in one of his book “manufacturing inventory control techniques (2011)”. another key character david parmenter, the king of the kpis, states the utilization of key performance indicators in his books “key performance indicators: developing, implementing, and using winning kpis (2007)”. some helpful techniques and methods introduced by john hilton in his book “practical business project and proposal (2001)”. the rationales on which my project will be based are as follows:john cheng pointed out “planning is the brain of the entire supply chain, is a demand chain. if planning is done well, purchasing and production can follow the demand relax.” since we have the independent planning function, i believe that the planning reorganization could bring us high efficiency and reduce the max stock level. this is where my hope lies.for discussing kpi, david parmenter said: “the fact that kpis is just the few main indicators that management of a business must identify, so that they focus on the right things. something to remember all the time when you are implementing bscs, dashboards and the like.” i have confidence that after setting good kpi system, our inventory management can perform as good as those big companies.hilton (2001) introduced those particular techniques and elements used in preparing a business proposal in the book titled “practical business project and proposal”. i used some of them to help me carry out my project, such as face-to-face interviews, focus groups, swot analysis, flowchart, project framework, and etc.“practical project design”(gu yueguo, 2002) demonstrates a complete procedure from the planning of a project to presenting project report step by step with convincing examples, which also includes problem analysis, project design, project implementation and project evaluation. 5. project design5.1 planning activities5.1.1 general planningtime scaletaskspersonsweek 1design the new organization of planningjoanna/hrweek 2recruit one daily production plannerjennifer/hrweek 3transfer daily e-plating planning job to the planning function.celty/cheng qiongfangweek 4transfer daily metal work planning job to the planning function.nick/danis week 5 1. all orders are passed to one window 2. public notice of the new organizationjennifer/tim/ hanne /joanna/hrweek 61. set new kpisjoanna/financial 5.1.2 time scale and person involvedby the end of week 1, joanna ( i ) should design the new organizations with hr to have it finalized. the function of planning is just independent, and the daily production planning now is handling by the production dept. we must combine all planning into one function since scheduling planning and material planning are inseparable and interaction. if they are into one function, there are big advantages not only rise up the professional degree of planning but also convergence the material planning and production planning, short the communicate time to improve the efficiency. that the l/t is reduced and max stock level will be reduced. by the end of week 2, jennifer /hr need to arrange interview for the schedule planners. we have one vacancy if we need to transfer the daily production planning from production dept.by the end of week 3, celty will handling all daily e-plating. she must keep contact with cheng qiongfang who is do daily planning in the production dept to get enough capacity information and some bottle neck. by the end of week 4, nick will handle all daily metal work. he must keep contact with danis who is do daily planning in the production dept to get enough capacity information and some bottle neck. by the end of week 5, 1)we will inform hanne/dk that all orders include prototypes orders which is to project team tim need to send to one window, that is jennifer. after this, jennifer will follow all orders. 2) hr will have issue a public notice of the new organizations of logistics. by the end of week 6, we set up the new kpis which secure to reduce the max stock level.5.2 costingmoney invested in this project is as follows:planner annual salary: rmb48,0005.3 risks analysisbefore putting the plan into practice, i find the following problems that might affect the successful implementation of this project. these risks are generally fall into three categories:5.3.1 person relatedfrom generally speaking, the planning function is new to the factory and the planners are all new, i have to training and monitoring them daily. we are all busy and need to get fully support from other function on the project.5.3.2 time relatedwithin one week to recruit one planner need more time than schedule. the delay will cause problem for the project.5.4 management and controlsince it is impossible to eradicate all these risks, i have thought of some measures to control these risks.l discuss with general manager about this project, tell her the advantages, the cost and the risks. try to gain acceptance of the general manager as soon as possible.l hold a meeting with all related staff, tell them the plan and time scale. stress on them that the plan should be acted on time and i should be informed on every problem met during the implementation.6. project implementation6.1 general introduction of time, place of project implementationmy project implementation was conducted during mar 1st, 2012 to may31th, 2012. most of those design and construction of the project was taken place in our factory.6.2. general introduction of time, place of project implementationon the first stage of implementation, it took me one week to design the layout of this project, then another week to discuss with my general manager about it and talk to all related person. the time used is same as planned without any delay. it was the busiest period for me from week 3 to week 5, i carried out several things. first we follow the daily e-plating planning as soon as possible. secondly, we have to handling all daily planning. thirdly, we follow all orders from dk. week 6 is more challenging to me, as this is the week we need to get the agreement with financial to set up the new kpis, this is a hard time for us.6.3. monitoringin order to see whether my project is going on as planned while it is in progress, i adopted some method when monitoring the whole process.first i prepare a to do list with every things we need to finish, see appendix ii. i referred to it regularly to check whether things were happening in the planned way.next, a very useful thing that i had done while the projects is in progress was to keep a portfolio of all my documents prepared while planning and implementing the project and record of all meetings and decisions that were taken as the project proceeds.7. results and discussion7.1 resultsin order to analyze the results after projects implementation, some data like the lead time (from order receiving date to order delivery date), rate of inventory turnover, otd from supplier, otd to customer and max stock level compare with last years records. these data are categorized as below:item2011mar. to may, 2012raise or downthe lead time (from order receiving date to order delivery date)2015+25%rate of inventory turnover11.26+26%otd from supplier90%98%+8%otd to customer95.5%98%+3%m