New production planning system - Luvata Hitachi Cable Thailand

LHCT is engaged in the manufacture of smooth and inner grooved copper tubes for the AC industry in the South Asian market. The company produces about 18 000 tons of copper tube annually, its customers being major Japanese AC manufacturers in Thailand as well as subcontractors supplying heat exchangers and piping parts.

Challenging production planning

LHCT wanted to solve three problems in production process with the help of a new production planning system.

“The amount of work orders had grown too big to be scheduled manually, the shop floor control system was missing thus making it appear like a black box, and there was no transparency between different functions in the supply chain,” explains Jouni Satola, managing director of LHCT.

Tieto’s Lean System with Works Balancer was chosen as the solution. During the implementation of Lean System with Works Balancer, the company was still part of the Finnish Outokumpu Group. Lean System with Works Balancer was known to be a proven concept with low risk, as Tieto had successfully delivered the system to Outokumpu before. The implementation was completed in just five and a half months, a month ahead of schedule.

The main target for the Lean System was to have a modest 15 % increase in the monthly production capacity. Until today the company has reached an 80 % increase in the capacity mainly by developing processes in accordance with lean manufacturing principles and only with some minor investments on the equipment.

According to Warapot Leaungwutiwiroj, production manager at LHCT, the average lead-time has decreased from eight to only three days.

“At the same time the inventory turns have dropped from 40 days to only seventeen days at present,” says to Rungrot Juntharatip, IT-manager.

Great sales support tool

Due to the fluctuating AC demand in Asia, the company has developed a gate-keeping method for facilitating sales. A diagram provides sales people with an up-to-date load situation of bottleneck resources. This helps them to proactively make customers promises they can keep. Production planning manager Surasit Hiranyapuek, who is responsible for planning and coordination with sales at LHCT, tells that he normally uses Works Balancer once a week for planning, checking the changes and for scheduling.

Challenge
The production planning system at LHCT was facing many challenges. The amount of work orders had grown too big to be scheduled manually, the shop floor control system was missing thus making it appear like a black box, and there was no transparency between different functions in the supply chain.

Solution
Tieto’s Lean System with Works Balancer was chosen as the solution. During the implementation, the company was still part of the Finnish Outokumpu Group. Tieto had successfully delivered Lean System with Works Balancer to Outokumpu before so it was known to be a proven concept.

Results
The main target for the Lean System was to have a 15 percent increase in the monthly production capacity. This target has been exceeded by far. The company has reached a 80 percent increase in the capacity mainly by developing processes and only with some minor investments on the equipment – and with 7 percent fewer people. The average lead-time has decreased from eight to only three days and the inventory turns have dropped from 40 days to 17 days.