Post on 15-Aug-2015
Cast:Russel NovizaRey San PedroChris AranzasoJeff ArnesAra MasicapDiana Herrera
Project Title:
Producer: CHIQCLOG TEAM Director: Huy Q. Truong
Date: May 28, 2013
Location: Can Asian Inc. Boardroom
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Problem Stratification
No.
Proposed Problem Cost Impact
Controllability / Achievability
Result
1.Low value imported spare parts with high freight charges
PhP 184,000.00 High
7% or 23 purchases out of 307 purchases have value lower than US$200.00
2. Too many reconciling items that leads to late posting of Inventory Count and submission of FG Inventory Report
None Medium
Average of 47% reconciling items from June to November, 2012
3. Late processing of recoveries documents from HFI to FG (Delivery of FG before transfer posting)
TBD Low
4.Container deposits with deductions PhP 21,693.84 Medium
Average of 1% deductions from Jan-Dec. 2012
5.Non-moving FGs without PO Low
Introduction
Logistics Department
Purchasing
Inventory Supply Planning and Control
Physical Distribution / Warehousing
Purchasing
Inventory Supply Planning and Control
Introduction
Logistics Department
Physical Distribution / Warehousing
Process FlowPhysical Inventory Count of Finished Goods
FG Physical Inventory Count
Email Schedule of Inventory Count
Create PID for FG
Prepare Count Sheets
Logistics Asst. - PD/Warehousing
Logistics Asst. - PD/Warehousing
TPL Warehousing
Process FlowPhysical Inventory Count of Finished Goods
FG Physical Inventory Count
Email Schedule of Inventory Count
Create PID for FG
Prepare Count Sheets
Logistics Asst. - PD/Warehousing
Logistics Asst. - PD/Warehousing
TPL Warehousing
Conduct Inventory Count Finance, Logistics, TPL
Reconciliation of Inventory Count
Finance, Logistics, TPL
Agreed? ConductRecount
NO
YES
Countersign the count sheets
Finance, Logistics, TPL
Finance, Logistics, TPL
Process FlowPhysical Inventory Count of Finished Goods
Conduct Inventory Count Finance, Logistics, TPL
Reconciliation of Inventory Count
Finance, Logistics, TPL
Agreed? ConductRecount
NO
YES
Countersign the count sheets
Finance, Logistics, TPL
Finance, Logistics, TPL
Prepare summary of the count and count report including reconciling
documents
Logistics Asst. – PD/Warehousing
Validate the correct summary versus SAP
count
Finance Assistant
Post PID of Inventory Count
Logistics Assistant. – PD Warehousing
Submit inventory count report
Logistics Assistant. – PD Warehousing
Prepare summary of the count and count report including reconciling
documents
Validate the correct summary versus SAP
count
Post PID of Inventory Count
Submit inventory count report
Process FlowPhysical Inventory Count of Finished Goods
Prepare summary of the count and count report including reconciling
documents
Logistics Asst. – PD/Warehousing
Validate the correct summary versus SAP
count
Finance Assistant
Post PID of Inventory Count
Logistics Assistant. – PD Warehousing
Submit inventory count report
Logistics Assistant. – PD Warehousing
Counted FG
Problem Statement
There were an average of 47% reconciling items in pallets during FG inventory count
from June – November, 2012
Results:
Late Posting of Inventory Count and Submission of report
Reconciling Items
Months No. of Pallets
No. of Reconciling items in Pallets % Production
PD/ Warehousing
June 3,081 944 30.64% 22.49% 8.15%
July 2,555 457 17.89% 9.86% 8.73%
August 2,682 2,180 81.28% 49.55% 31.73%
September 1,866 521 27.92% 15.27% 12.65%
October 2,042 1,065 52.15% 32.03% 20.13%
November 1,530 1,127 73.66% 44.58% 29.08% 13,756 6,294 47.26% 28.96% 18.41%
Initial ObjectivesTo reduce the monthly reconciling items by 80% during FG Inventory
Count
Desired EffectPosting of Inventory Count within 10 working days from date of Count and Submission of Report within 20 days
from date of posting
Root Cause AnalysisThere were an average of 47% reconciling items in pallets
during FG inventory count from June – November, 2012
People Product
Procedure Patrons
People
PD personnel was not able to post DR before the count
DR not yet returned to Logistics PD for posting before the scheduled inventory count
FG currently being delivered to customer
As per customer's schedule
Insufficient SAP inventory
Newly produced FG not yet transferred to FG Store location
Newly produced FG not yet transferred to FG Store location
No created FGTR (Production)
Reconciliation of FG was not made on-time by TPL, PD and Production
Agreed schedule of reconciliation by TPL, PD & Production was not followed Real time posting
was not strictly implemented (Production- within 24 hours from date of Production)
Real time posting is not strictly implemented and included in the procedure of Production
No penalty for late posting of FGTR
People
PD personnel was not able to post DR before the count
DR not yet returned to Logistics PD for posting before the scheduled inventory count
FG currently being delivered to customer
As per customer's schedule
Insufficient SAP inventory
Newly produced FG not yet transferred to FG Store location Recoveries from HFI were
being delivered to customer before posting to FG storloc
Recoveries from HFI were being delivered to customer before posting to FG storloc
FGTR was not yet prepared before the delivery
Not being prioritized
Engaged in other activities
FGTR was not yet prepared before the delivery
Real time posting is not strictly implemented and included in the procedure of Production
People
Production personnel was not able to post the FGTR of recoveries on time
Accumulated FGTR over the weekends needs time to verify before posting
Documents of recoveries in conflict with database and actual
Database not regularly updated (production)
Production Staff engage in other activities
Lack of Production Staff personnel to do the database updating and FGTR posting regularly
People
Made an error in inputting the correct quantity in SAP
Quantity inputted in SAP is less than actual quantity received
Quantity inputted in SAP is more than actual quantity receivedTPL acknowledge the quantity of FG in the FGTR without counter checking
Quantity inputted in SAP is less than actual quantity received
Status of the pallets reflected in the POR are not clear if HFI or Good
Manual writing (sample attached)
Not all copies of the POR (Prod., QA, TPL) are being updated. (see attach sample)
Updating of the POR was made after segregating and distributing the copies (Prod., QA, TPL)
People
Made an error in inputting the correct quantity in SAP
Quantity inputted in SAP is less than actual quantity received
Quantity inputted in SAP is more than actual quantity receivedTPL acknowledge the quantity of FG in the FGTR without counter checking
Quantity inputted in SAP is more than actual quantity received
Status of the pallets reflected in the POR are not clear if HFI or Good
Manual writing (sample attached)
Not all copies of the POR (Prod., QA, TPL) are not being updated. (see attach sample)
Updating of the POR was made after segregating and distributing the copies (Prod., QA, TPL)
Root Cause AnalysisThere were an average of 47% reconciling items in pallets
during FG inventory count from June – November, 2012
People Product
Procedure Patrons
Product
DR was not immediately returned by Customer
Schedule of unloading was delayed
Expired Cans not counted but still on SAP
For write-off . Waiting for approval.
Separate count
Root Cause AnalysisThere were an average of 47% reconciling items in pallets
during FG inventory count from June – November, 2012
People Product
Procedure Patrons
Procedure
Insufficient SAP inventory
Newly produced FG not yet transferred to FG Store location Recoveries
from HFI delivered to customer but not yet posted to FG storloc
Late confirmation by Production Personnel
Newly produced FG not yet transferred to FG Store location
No created FGTR (Production)
Reconciliation of FG was not made on-time by TPL, PD and Production
Agreed schedule of reconciliation by TPL, PD & Production was not followed
Engaged in other activities
Real time posting was not strictly implemented (Production- within 24 hours from date of Production)
Real time posting is not included in the procedure of Production
No penalty for late posting of FGTR
Procedure
Insufficient SAP inventory
Newly produced FG not yet transferred to FG Store location Recoveries
from HFI delivered to customer but not yet posted to FG storloc
Late confirmation by Production Personnel
Recoveries from HFI delivered to customer but not yet posted to FG storloc
FGTR was not yet prepared before and after the delivery
Not being prioritized
Engaged in other activities
Real time posting was not strictly implemented
Real time posting is not included in the procedure of Production
Procedure
Insufficient SAP inventory
Newly produced FG not yet transferred to FG Store location Recoveries
from HFI delivered to customer but not yet posted to FG storloc
Late confirmation by Production Personnel