| Currently, High Mix & Low volume manufacture is a usual service way which EMS Company often meets, it is also one advantage to increase competition power. But HMLV with more different model, complex process, and Urgent order will cause high operation cost which will lead to low profit rate, even to the bad. This paper will analysis one EMS company in HMLV situation , H3C product is the research object, will analysis operation from business ,procedure, material complement aspects, in order to find the root cause of high-cost and corrective ways.From Business aspect, analysis through order qty, order lead time, variance of order, ECO…. Problems found:1. Lack of review of order when business dept received them2. Too many order changes happened, which cause the increase of qty of urgent order.3. Order's lead time is short, which cause urgent material purchase to increase material purchase cost, also lead to manufacture high cost, such as labor, equipment.The way to solve the problem, business dept. should follow:1. Cut in order review when it is received, and base on minimal economic qty to receive. When receive the order, Order review team review manufacture capacity and material requirement.2. Provide payable value-add services, such as ATE. Set up urgent order focus team, to deal with urgent order, provide new product running to increase priceAt material aspect, analysis through: common material supplement, supplier original location, flexible supplement , pre-buy procedure, so that we find the time difference between pre-order and pre-material, find the reason of high-cost of material purchase:1. High percentage of order change which increase material cost 2. Long purchase lead time, found: almost more than half of material delay > 5 wks, so that can not meet demand of H3C's prompt order change.3. Common analysis of purchase, >80 supplier provide <10 kinds of material, have to hire more buyers to face supplier4. Analysis of flexible purchase. To meet customer requirement, should shorten purchase lead time < 2 wks which will increase cost also.5. From supplier original location, 49 suppliers within Guangdong province, occupy 45% of all supplier, will increase purchase lead time and freight cost.So actions should be taken:1. Negotiate with customer to let manufacturer manage suppliers2. Global sourcing to add purchase value.3. Supplier localization process and reduce supplier qty.At production aspect, from analysis of process, value stream to find problem,First, too many models and changeover cause high cost. Second, unreasonable layout of equipment, cause too many movement and transferring. Third is bad management in high expense. So should cut in Lean production and cost control:1. Enhance Lean Kaizen activities2. Optimize line layout3. Improve changeover procedure4. Strictly control expense, such as: EOT approval procedure, OT expense control, space / water / electrical expense control, increase equipment utilization rate to reduce depreciation by way of SMED, device PI, productivity improvement.In one word, from analysis of systems, procedures and measures, we have found proper ways to handling HMLV production, to control operation expense under certain level. At the same time, increase operation profit space by global sourcing and quotation. After these Kaizen, H3C project's profit rate will climb up. |
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