Presentation SLOB Material Reduction

1. MATERIAL SLOB REDUCTION
VIETNAM PLANT
Champion:
Tran Dinh Giang
Project Leader:
Nguyen Thi Thanh Thuy
(Green Belt)
Team Member:
Le Quang Minh
Tran Thanh Nhan
Pham Minh Ha
Pham Thanh Thai
Vo Thi Kien Tram
Tong Thi Kim Giao

2. 2
1.No more using or action for old materials in production line.
2.Place Purchased Order with incorrect materials code
3.Excessive planning of materials
DMAIC
DEFINE – BUSINESS ERRORS

3. 3
1.Current materials are replaced by new materials base
on request from region immediately.
2.Termination of producing some specific product.
DMAIC
DEFINE – BARRIERS

4. 4
PRIMARY METRIC 01:
•Reduce 5% Value of SLOB by Year end of 2011
•Base line : 678 Million VND
•Target = SLOB Value: 644 Million VND ( End of 2012)
DMAIC
DEFINE – METRICS
SECONDARY METRIC:
•Keep the write-off of materials SLOB lower than a specific amount.
•Baseline : Not available
• Target = % Write-off is lower than 60% of SLOB

5. 5
DMAIC
MEASURE – SUMMARY CLUES
CLUES
1-- CLUE 1
Effect of Safety Stock /MOQ , Leadtime ( Material Planning & Pruchase Order Tracking
process) -->Purchased amount higher than actual request
2-- CLUE 2
Incorrect Items or excessive amount have been entered in PR/PO ( Purchase
Requisition Creation Work flow)
3-- CLUE 3
Incorrect Material Planning Data/ Deviation Physical stock & booked Data ( Material
Planning & Material Receipt process)
4-- CLUE 4
Phase out process been taken with out Inventory control communication( Product phase
out process)
5-- CLUE 5
Bill of Material are change / OR Change source supply of Material Material Planning
process & PR Creation process)
FOCUSED PROBLEMS

6. 6
05
CLUES
5Whys
Prioritization
FMEA
…
ANALYSIS – ROOT CAUSE SUMMARY
04
ROOT
CAUSES
Root cause #X1: Lack of knowledge on the inventory planning &
effect of key factors (safety stocks, supply lead time, forecast).

Root cause #X 2: No tracking system is in place OR lack of
supervision to assure the complete tracking on the daily basis
Root cause #X3: Phase out procedure for Material was not set up
Root cause #X4: No process of stocks count is in place or implemented.
DMAIC

7. 7
Before After
IMPROVE :Lack of knowledge inventory planning  effect of key factors (safety stocks, supply…
S1
1.Setup the process to identify the
method of planning by training course
2.Implement the BOM-based calculation
as demand cross-check tool.
DMAIC
X1# :
Lack of knowledge inventory planning
 effect of key factors (safety stocks,
supply lead time, forecast)

8. 8
After
IMPROVE :Lack of knowledge inventory planning  effect of key factors (safety stocks, supply…
DMAIC
2.Setup the process to identify the method of
planning by training course

9. 9
After
IMPROVE :Lack of knowledge inventory planning  effect of key factors (safety stocks, supply…
DMAIC
2.Implement the BOM-based calculation as
demand cross-check tool.
IMPLEMENT APPROVED BILL OF MATERIAL
WILL BE CHANGED

10. Before
After

DMAIC
X2:No template to track and follow
up Material Delivery.

S2-Set up daily basis tracking
template for Material Delivery by SKU
IMPROVE – DAILY BASIS TRACKING TEMPLATE FOR MATERIAL DELIVERY
After

11. 11
# X4: No process of stocks count
is in place or implemented
IMPROVE –No process of stocks count is in place or implemented
Before After
DMAIC
 # S4 : Set up Cycle Count process
Classify the items
by ABC class
Schedule the
cycle count based
on ABC class
CYCLE COUNT
End of Cycle
Count
Record for further
re-count
Any variance?
Approved?
Review the items
list with ABC class
No
Extract the book
numbers from the
system
Re-count the
items having
variance
Record the stock
count result &
variance (if any)
No
Conduct the cycle
count as per
schedule
Yes
3 times
Investigate the
variance
Any root
cause?
No
Plan corrective &
preventive actions
Report the stocks
count result &
C&P actions plan
Yes

12. 12
Before After
IMPROVE: Phase out procedure for F/G & Material were not set up
S3-Set up Phase out process for
Material
DMAIC
#X3: Phase out procedure for F/G &
Material were not set up

13. 13
Before After
IMPROVE: Quick Action for SLOB Material
Take some quick action
DMAIC
Still keep at stock in long time, non take
action to reduce SLOB of component
Ite m Cod e P rod uct De scri ption Un it P riceQty
On
Ha nd
Am o unt
(V ND)
P ro po se d Actio ns P ictu re
VPTL-JT43 Was te Pipe Conne ctor S trap VP-JT43133,79848765,159,626Can be s e nt to Thailand
PC-N 06000-WTBoltcap s e t for e nthove n&plaza WT13,3132,84637,888,798Can be s e nt to Thailand
VF-7120210TON CA HAN DGR IPS - ABS 330,0005718,810,000Can be s e nt to Thailand
PC-N 06000-BNBoltcap s e t for e nthove n&plaza BN54,22620010,845,200Can be s e nt to Thailand
D-680 Conce a le d flus h valve 7,710,0001 7,710,000Can be s e nt to Thailand
VP-JT43N Was te pipe conne ctor only 317000014116,035445,105,540Can be s e nt to Thailand
4720000-WTTON IC /M OM EN T SEAT & COVER (WT)482,1855 2,410,925Can be s e nt to Thailand
VPVN CAP00-UWTPlas tic Bolt Cap 2,970 7492,224,530Can be s e nt to Thailand
472000S-WTTON IC SLOW CLOSIN G SEAT & COVER WT546,0002 1,092,000Can be s e nt to Thailand
1. Resend SLOB Component to
Thailand , Korea
After
I tem Code Product Descri pti on Uni t P ri ceQ ty On
Ha nd
Am ount
(V ND)
P roposed Acti ons Pi cture
VPVN160100 Wall Fixing Se t For Lavatory8,050 516 4,153,800
Can be use d for other mode ls but
ne ed to change some parts.
500M 97-NOC
TANK FITTINGS FOR
SAVONA TF-2097
193,435 100 19,343,500
Can be use d for other mode ls but
ne ed to change some parts.
CN2407V05100 Dual Flush Outle t valve A240767,939 280 19,022,920
Should be se t, include d wate r
control,
if only outle t valve , nothing to do.
TF1400002-02 Outlet vavle of AS14, Hamilton, Athe na102,354 100 10,235,400
Should be se t, include d wate r
control,
if only outle t valve , nothing to do.
TF13HA201-01 Inle t valve of AS13HA2 35,000 60 2,100,000
Should include flus h valve , if not,
can not be us e d.
2. Reuse and re-fix some component

14. 14
TREND OF TARGET ACHIVEMENT
SLOB MATERIAL VALUE BY MONTHLY
667
722 704 685 685
618 618
587
623 622 643 638 637
-
200
400
600
800
SL OB Aging
> 4 Year
(2011.12)
SL OB Aging
> 4 Year
(2012.01)
SL OB Aging
> 4 Year
(2012.02)
SL OB Aging
> 4 Year
(2012.03)
SL OB Aging
> 4 Year
(2012.04)
SL OB Aging
> 4 Year
(2012.05)
SL OB Aging
> 4 Year
(2012.06)
SL OB Aging
> 4 Year
(2012.07)
SL OB Aging
> 4 Year
(2012.08)
SL OB Aging
> 4 Year
(2012.09)
SL OB Aging
> 4 Year
(2012.10)
SL OB Aging
> 4 Year
(2012.11)
SL OB Aging
> 4 Year
(2012.12)
Monthly
S
L
O
B

V
a
l
u
e
(

M
V
n
d
)
Period
SLOB Aging > 4
Year (2011.12)
SLOB Aging >
4 Year
(2012.01)
SLOB Aging >
4 Year
(2012.02)
SLOB Aging >
4 Year
(2012.03)
SLOB Aging >
4 Year
(2012.04)
SLOB Aging >
4 Year
(2012.05)
SLOB Aging >
4 Year
(2012.06)
SLOB Aging >
4 Year
(2012.07)
SLOB Aging > 4
Year (2012.08)
SLOB Aging >
4 Year
(2012.09)
SLOB Aging > 4
Year (2012.10)
SLOB Aging > 4
Year (2012.11)
SLOB Aging > 4
Year (2012.12)
Result 667 722 704 685 685 618 618 587 623 622 643 638 637
Target 644 644 644 644 644 644 644 644 644 644 644 644 644

15. 15
CONTROL - CONTROL PLAN
DMAIC
X Control Method Who &When Reaction Plan
Sustain-ability
Check
List the critical
to be controlled here
Refer to FMEA & list
control method for the X here
Indicate the resposible
person
and target implement
Describe the back-up
plan if X out-of-control
Describe the audit
plan & track result
(X
1-1) Lack of knowledge on the inventory
planning & effect of key factors (safety
stocks, supply lead time, forecast).
(1)Setup the process to identify the method
of planning by trainning course
(2)Implement the BOM-based calculation
as demand cross-check tool.
SOIP /NPD/Lab
Reset up planning
method
base on strategy / yearMonthly
No tracking system is in place OR lack of
supervision to assure the complete tracking
on the daily basis.( X
2-2)
Setup the tracking system & deliver the
coaching to SOIP team to assure the
implementation of tracking in the standard
way by tracking template , arrange meeting
with Supply chain Manger ( Monthly)
SOIP Team/Mr.Giang
Arrange Monthly MeetingMonthly
Phase out procedure for Material were not
set up ( X
7-4)
(1) Setup the process to phase out product
& material clearly,
(2) Communicate to all related group before
work out:check current inventory postpone
phase out step until use them out of stock
SOIP Team/Mr.Giang/ NPD
Control phase out
process
is implemented Quaterly
No process of stocks count is in place or
implemented.( X
8 -3)
Setup the process to describe about stock
count process& establish the timelines of
regular review.
SOIP /Finance/WH Team
Review / control for
apply
process on track Monthly

16. 16
SUMMARY OF PROJECT RESULT
DMAIC
Improvement Results of Project Y & y:
Before : SLOB Material : 678 Mil After : Result : 637 Mil vs. target : 644 Mil end of
2012
 Benefits Delivered:
Release space for Warehouse storage
Contribute : 41Mil Direct Saving

17. 17
Team workChange mindset
KEY LEARNINGS
DMAIC
LIXIL VALUES


Optimizes resource : Reach that Lixil value when we reduce Material SLOB value to contribute
direct saving for company
Release space when warehouse storage capacity is limited
Reduce write off list value for SLOB when they becoming damaged since kept a long time.

Changing mindset with logical thinking &
analysis method efficiency when apply Six
Sigma
Well knowledge planning & inventory
management are shared base on team work
spirit