Value Stream Based Midea Microwave Oven Orders Fulfillment Cycle Improvement Research

Operation, Cost and Efficiency are the three most important factors for the competitiveness. Excellent operation, reasonable cost and high efficiency can bring the company to the path of sustainable development. BTW, in the times of products no difference, labor cost keeping on increasing, the currency for developing countries going up and down, the world economy full of uncertainty, if the company wants to maintain sustainable development, the company should perform much better in efficiency than the competitors, thus to winning more market chance. For MTO manufacturers, the length of the order cycle is of importance to the whole assets turnover.Midea microwave oven Company, with the annual output of 30 million units, takes 40% of export market share and 50% of domestic market share. Among these 30 million units, overseas takes 80%, thus shortening the order cycle of overseas sales orders is essential to the efficiency of this company. Shortening the order cycle can also reduce the bullwhip effect and smooth the whole process. The market share of Midea microwave have increased to be 40% until year 2014 from 10% in year 2006, while the order cycle only decreased by 1%, so the we achieved the increase of the volume by increasing the resource instead of efficiency improvement.With Midea microwave oven as background, this article analyzed the order full cycle from end to end with Lean production and Value Stream Mapping. The full cycle is split to be 4 sub-cycles. a: order replacement cycle, this includes the delivery time inquiry period. b: order processing period, c production period including purchasing period; d shipment period. The reason of waste in order placement is because there is no commitment to customers. All the orders have to be confirmed one by one after confirmation from factory. The will result in the waiting waste due to times difference issue; for order processing, there are two reasons causing this, one is the process itself not reasonable, the other is the way of processing, all are manual processing and the energy of human being will limit the speed. For production cycle, the capacity is not well –prepared due to low forecast accuracy rate, thus the orders have to be postponed due to no capacity, and the purchasing period will also affect the production period. For shipment, part of the reasons is from customer and the OEM business mode. In the 3rd chapter, by way of ABC and 20/80, all customers are rated and commitment will be made according to different rating. For order processing, with way of BPR, we have cancelled some unnecessary stops and automatic this processing, thus to avoid waiting due to people’s energy limit. For the capacity issue, we used 5-steps of forecasting to make the forecast more accurate thus to avoid too many orders postponed due to no capacity prepared. The material is also distinguished to be different types according to purchasing cycle. Advancing some material purchasing can also help in this issue. For the shipment period where it is difficult due it is affected by customer decision and OEM business mode, we also have some measures to stimulate sales people to keep on negotiating with customers. After all the measures, the order cycle is shortened and the on-time delivery is improved. Customer satisfaction is also enhanced. The more accurate forecast also make the demand and the production match better, which make the production stable and the whole process more smooth.