MFCA CASES IN VIETNAMAPEC MFCA WORKSHOP IN MALAYSIA

PREPARED BY: IMT

Purpose

Sharing on HOW

•To introduce MFCA to the country

•To make it successful in different cases

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Source: - Tuoi Tre Newspaper

We need to protect our environment before it’s too late…

Progress

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2010

2011

2012

2013

2014

2015

2016

Initial research

AOTS training

in JPPublic

workshop

First consulting

case

Lecturing tours

Continue training and consulting

1200 attendances100 companies10 consulting cases

Focus on1. Top management2. Associations

MFCA Cases

Wire and cable

Tobacco

Candy

Plastic can

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Case 1: optical cable➢Charter capital

1308 B VND ~ $58M

➢Capacity

Optical cable : 1,200,000 km /year

Bronze cable: 1,500,000 km/year

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Plan for MFCA trial

7

Oct Nov Dec

1 MFCA Seminar for top leader 6

2 Team formulation 17

3MFCA Seminar for all employees. Team meeting

21

4Detail work with team. Define target product, draft flows, think about how to collect data

22

5 Collect data and calculate 23-25

6 Recheck on fieldwork 26

7 Explanation and kaizen thinking session 26

8 Implement the kaizen plan 27--5

9 Follow-up 6

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Member

8

Project manager Chief of Production

Member A Secretary

Member B Standard cost dept

Member C Engineering dept

Member D Accounting dept (COGS)

Member E Accounting dept

Member F Procurement dept

Experienced, powerful person

Can push related departments especially

Accounting

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Challenges to consultantFirst case in Vietnam

Fully automatic Austria production line

Near zero-defect (as reported)

High expectation from BOM

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10

Select “future” target product (ADSS24）

Coloring SZ strandingLoose tube Outer sheath

Process

Inner sheath

Final product

Future most potential product

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Coloring SZ Loose tube Outer sheath

Product

PBTJellyFRP

Wiper

Inner sheath

Fiber coreUV inkAcetolWiper

Nitrogen

FRPDummy

Loose tubeBinder strandPolyester tape

Black tape

HDPE 6062

HDPE 6062 Aramid yarn

Hot ingotBlack tape

Fiber core cut-out

PBTJellyFRP

Wiper

Loose tubePolyester tape

HDPE 6062 Aramid yarn(cut out)

HDPE 6062

Material Flow

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MATERIAL

Fiber core 360,000 PBT Plastic 62,000 FRP 48,800

UV Ink 5,000 Jelly 24,400 Dummy 9,000

Acetol 0 FRP 2,200 Binder 3,600

Wiper 0 Wiper 0 Black tape 2,800

Nitrogen 400 Poly tape 20,200

Total 365,400 Total 88,600 Total 84,400

Coloring*PPC 337,400

②Loose tube*PPC 424,600

③SZ stranding*PPC 508,800

92.34% 99.67% 100.0%

Loss 28,000Fiber

Cutout 26,820 Loss 1,400 Loss 200

% 7.66% % 0.33% % 0.04%

Total cost Total cost Total cost

Input cost 365,400 100% Input cost 454,000 100% Input cost 538,400 100%

Loss 28,000 7.66% Loss 29,400 6.48% Loss 29,600 5.50%

*PPC 337,400 92.34% *PPC 424,600 93.52% *PPC 508,800 94.50%

*PPC : Positive Product Cost

Inp

ut

Loss

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Flowcost matrix

Coloring Loose tube SZ stranding Inner sheath Outer sheath Total

Input

Material cost 365,400 88,600 84,400 71,600 453,400 1,063,400

System cost 5,400 20,400 23,200 38,000 38,000 125,000

Utility cost 200 2,000 800 17,800 17,800 38,600

Total 371,000 111,000 108,400 127,400 509,200 1,227,000

Loss

Material cost 28,000 1,400 200 200 26,000 55,800

System cost 414 83 19 30 3,131 3,677

Utility cost 15 7 1 7 970 1,001

Waste treatment 0 0 0 0 0 0

Total 28,429 1,491 220 237 30,101 60,478

Material cost System cost Utility cost Waste treatment Total

Total cost 1,063,400 125,000 38,600 0 1,227,000

Positive product 1,007,600 121,323 37,599 0 1,166,522

Loss 55,800 3,677 1,001 0 60,478

Loss ratio 5.2% 2.9% 2.6% #DIV/0! 4.9%

13

: USD

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Result and lesson learnedWe can finish it within 20 days since

- The team were very talented and engaged

- Management team were open to listen to result and recommendation

- ERP system helped a lot in cost retrieval and allocation

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Lessons learned1. You may choose multiple process analysis approach by the beginning

2. Gemba check is nessessary

3. MFCA can help us visualizing losses even in “hard” case

4. It is up to specific case to use %mass or %monetary value in loss ratio allocation

5. We need to be open to proper cost allocation method in Utility and System cost

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Case 2: tobaccoCompany introduction

- Product: packed cigarette

- Capacity: 180 million pack/year

- No of employee: 325

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Challenges to consultant

Toxic environment hard to keep concentration

No ERP data collection might be problematic

Cost accounting was not so advanced data aggregration might be problematic

People are exciting about LEAN tend to compare MFCA with other Lean tools

New machine investment was on the way want to delay the project

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Input

Process

Negative

product

Box

PackingNylon pack

Bunch

wrapping

Bunch

nylon

cover

Lot

packaging

Fiber

Glue

Cover paper

Filter paper

Filter

Alu paper

Label

Glue

Box paper

Seal

Nylon

paper

Seal

string

Nylon

paper

Glue

Sealing

nylon

Sealing

string

Carton box

Tape

Nylon bag

Fiber

Cover paper

Filter paper

Filter

Alu paper

Label

Box paper

Seal

Broken

cigar

Broken

box

Nylon

paper

Seal

string

Cigar box

Nylon

paper

Seal

string

Sealing

nylon

Sealing

string

Broken

box

Wrapping

cigarette

Carton box

Tape

Nylon bag

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InputOutput

Positive product Loss

STT Material Input (a) Unit

Process Wrapping cigarette 175,154.1 165,423.0 9,731.1

1 Fiber 144,147.8 Kg 135,297.1 8,850.7

2 Cover paper 6,820.3 Kg 6,560.5 259.9

3 Filter cover 2,961.4 Kg 2,915.2 46.2

4 Filter 20,044.6 Kg 19,537.5 507.1

5 Glue 1,180.0 Kg 1,112.7 67.3

Process Packing box 51,676.4 51,222.7 453.7

1 Alu paper 6,939.7 Kg 6,857.8 81.9

2 Label 38,635.0 Kg 38,364.6 270.4

3 Box paper 5,154.8 Kg 5,107.3 47.4

4 Glue 947.0 Kg 893.0 54.0

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Sợi14,414,777,000

Giấy bạc416,379,600

Giấy vấn272,812,860

Bao nhãn1,545,400,000

Kiếng gói195,828,360

Giấy ĐL207,296,460

Giấy khung128,868,805

Chæ góii40,871,250

Đầu lọc3,006,689,580

Keo37,880,000

Keo47,200,000

Tem0

Tổng 17,948,775,900 Tổng 2,128,528,405 Total 236,699,610

BTP hữu ích 16,971,320,951 BTP hữu ích 19,080,773,524 BTP hữu ích 19,316,782,618

94.55% 99.90% 100.00%

Hao phí 977,454,949 Hao phí 19,075,832 Hao phí 690,516

% hao phí 5.45% % hao phí 0.90% % hao phí 0.29%

Tổng chi phí Tổng chi phí Tổng chi phí

Đầu vào 100% Đầu vào 100% Đầu vào 100%

Hao phí 5.45% Hao phí 4.96% Hao phí 4.91%

Hữu ích 94.55% Hữu ích 95.04% Hữu ích 95.09%

Công

đoạn VẤN ĐIẾU Công đoạn Đóng bao gói

Đ

ầ

u

v

à

o

C/Đoạn Bọc kiếng gói

17,948,775,900 20,314,003,915

H

a

o

p

h

í

16,971,320,951

977,454,949

20,077,304,305

996,530,781

19,080,773,524

997,221,297

19,316,782,618

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Wrapping cigaretteBox

PackingNylon pack

IN

OUT

P

Total Total Total

Loss%

Loss%

Loss%

Input

Loss

P.product

Input

Loss

P.product

Input

Loss

P.product

Positive product

Positive product

Positive product

Phong tút561,270,600

Kieáng tuùt107,641,128

Thuøng carton231,570,000

Keo34,440,000

Chæ tuùt6,952,050

Bao nylon56,800,000

Băng keo4,512,000

Total 595,710,600 Total 114,593,178 Total 292,882,000

BTP hữu ích 19,906,545,117 BTP hữu ích 20,020,481,684 TP hữu ích 20,312,629,906

99.97% 100.00% 100.00%

Hao phí 5,948,101 Hao phí 656,611 Hao phí 733,777

% hao phí 1.00% % hao phí 0.57% % hao phí 0.25%

Tổng chi phí Tổng chi phí Tổng chi phí

Đầu vào 100% Đầu vào 100% Đầu vào 100%

Hao phí 4.80% Hao phí 4.77% Hao phí 4.71%

Hữu ích 95.20% Hữu ích 95.23% Hữu ích 95.29%

C/Đoạn Đóng thùngCông đoạn Đóng tút C/Đoạn Bọc kiếng tút

21,024,307,69320,909,714,515

1,003,169,398

19,906,545,117

1,003,826,009

20,020,481,684

21,317,189,693

1,004,559,787

20,312,629,906

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Bunch wrapping Bunch nylon cover Lot packaging

Total

Loss%

Input

Loss

P.product

Positive product

Loss%

Input

Loss

P.product

Loss%

Input

Loss

P.product

Positive product

Positive product

Total Total

Vấn điếu Đóng gói bao Bọc kiếng gói Đóng tút Bọc kiếng tút Đóng thùng Tổng cộng

Đầu vào

C.PHÍ NGUYÊN LIỆU 17,948,775,900 2,128,528,405 236,699,610 595,710,600 114,593,178 292,882,000 21,317,189,693

C.PHÍ HỆ THỐNG 1,165,827,601 175,377,272 17,250,223 48,875,633 8,625,112 21,562,779 1,437,518,620

C.PHÍ TIỆN ÍCH 191,208,823 28,763,843 2,829,230 8,016,153 1,414,615 3,536,538 235,769,202

Tổng 19,305,812,324 2,332,669,519 256,779,064 652,602,386 124,632,905 22,990,477,515

Hao phí

C.PHÍ NGUYÊN LIỆU 977,454,949 19,075,832 690,516 5,948,101 656,611 733,777 1,004,559,787

C.PHÍ HỆ THỐNG 63,488,673 1,571,728 50,324 488,018 49,421 54,023 65,702,186

C.PHÍ TIỆN ÍCH 10,412,856 257,781 8,254 80,040 8,106 8,860 10,775,896

C.PHÍ X/LÝ CHẤT THẢI 0 0 0 0 0 0 0

Tổng 1,051,356,477 20,905,341 749,093 6,516,159 714,138 796,660 1,081,037,869

TỔNG CHI PHÍ

CHI PHÍ HỮU DỤNG

CHI PHÍ HAO PHÍ

TỶ LỆ HAO PHÍ

C.PHÍ NGUYÊN LiỆU C.PHÍ TIỆN ÍCH C.PHÍ X/LÝ CHẤT THẢI TỔNG CỘNG

21,317,189,693 235,769,202

C.PHÍ HỆ THỐNG

1,437,518,620 22,990,477,5150

21,909,439,646

1,081,037,869

4.71% 4.6% #DIV/0!4.6% 4.7%

1,004,559,787 10,775,896

1,371,816,434

65,702,186 0

20,312,629,906 224,993,306 0

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Cigar wrapping Box packaging Nylon wrapping Bunch pack. Bunch nylon p. Lot packaging TOTAL

MC SC UC WT TOTAL

INPUT

MC

SC

UC

TOTAL

LOSS

MC

SC

UC

TOTAL

TOTAL COST

POSITIVE COST

LOSS COST

LOSS RATIO

Result & lesson learnedResult

50% fiber loss cut down in 6 months new cutting machine investment

Gain more profit by using less fiber better humidity control

Lessons learned

- MFCA implementation is still possible without ERP, but needs more time

- People are asking about MFCA software modelling

- In case of lacking ERP and low competent accounting, experienced and enthusiastic planning dept would help

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Case 3: candyRevenue: 1250 B VND ~55M USD (2015)

Profit: 64.2 B VND ~ 3M USD

Capital: 154 B VND ~ 6.9M USD

Market cap: 940 B VND ~ 42M USD

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Source: www.21food.com

Challenges to consultant

Old devices + lot of NC + lot of staffs losses that can’t be found using only MFCA

Terribly busy managers time spent together with consultant

Big losses can be visualized mental shock to employee

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MC (inc. pack) SC UC TOTAL

TOTAL COST

SOFT CANDY 5,595,996 573,283 165,940 6,335,219

HARD CANDY 14,372,049 1,359,685 440,124 16,171,858

CHERRY 1,296,828 131,641 33,256 1,461,725

Total 21,264,873 2,064,609 639,320 23,968,802

LOSS

SOFT CANDY 162,457 3,190 1,525 167,172

HARD CANDY 294,359 10,581 2,069 307,008

CHERRY 144,699 7,916 1,558 154,174

Total 601,515 21,687 5,153 628,355

2.62%

ResultReduced 30% total loss in the period of Dec 2014 - Oct 2015, in which

- Hard-candy: from 3.5% down to 2.5%

- Soft-candy: from 3.4% down to 2.5%

- Cherry: from 12% down to 7%

Reduced 20% of staffs needed

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Lesson learned

5S is still mandatory

We can’t use MFCA first, then use IE on MFCA result

In mixed-mode (half automation) manufacturing, apply MFCA together with 5S and IE is the better way

Use optimum-stress mode while working with companies

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Case 4: plastic company

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Challenges to consultant

Very aggressive team all hard-play questions and many detailed problems

Production schedule changed frequently how to monitor data

Target products were integrated into a bigger chain how to extract and allocate data

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TOTAL COST

Positive cost

Loss cost

Loss ratio

TOTAL COST

Positive cost

Loss cost

Loss ratio

8,972,186 637,707 212,867 9,822,760

12.67% 14.2% 15.7% 12.8%

70,827,902 4,500,565 1,354,254 76,682,721

61,855,716 3,862,857 1,141,388 66,859,961

40.44% 27.4% 27.5% 38.1%

MC SC UC Total

20,901,862 4,523,606 1,058,078 26,483,545

14,189,785 1,707,412 400,834 16,298,031

MC SC UC Total

35,091,646 6,231,018 1,458,912 42,781,576

ResultInitial feedback

◦ So bad to believe◦ The CEO was shocked and denial

◦ The departments felt the heat

◦ Hard to continue to other products

Later feedback◦ “Can’t live without MFCA”

◦ Immediately cost-down

◦ Continue to products of different category: molding

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Lesson learned1.Answer tough questions adequately

2.Set up adequate measurement points

3.Check all cost allocations with extra care

4.5S is still mandatory

5.We can’t use MFCA first, then use IE on MFCA result

6.In mixed-mode (half automation) manufacturing, apply MFCA together with 5S and IE is the better way

7.Use optimum-stress mode while working with companies

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