XI’AN JIAOTONG-LIVERPOOL UNIVERSITY

西 交 利 物 浦 大 学
PROPOSAL SUBMISSION COVER SHEET AY1617
Name (Surname) MBEM (Other Names) GRADIELLA MONIQUE
Student Number 1510744
Programme MSc. Operations And Supply Chain Management
Module Title Supply Chain Management Dissertation
Module Code MAN445
Assignment Title Dissertation Proposal
Submission Deadline 15TH September 2017
Module Leader Professor Hossam Ismail
Supervisor Professor Hossam Ismail

By uploading or submitting this coursework submission cover sheet, I certify the following:
· I have read and understood the definitions of PLAGIARISM, COLLUSION, and the FABRICATION
Of DATA, as outlined in the Postgraduate Student Handbook of Xi’an Jiaotong-Liverpool
University and as posted on the University Website.
· This work is my own, original work produced specifically for this assignment. It does not
misrepresent the work of another person or institution as my own. Additionally, it is a
submission that has not been previously published, or submitted to another module.
· This work is not the product of unauthorized collaboration between myself and others.
· This work is free of embellished or fabricated data.

I understand that PLAGIARISM, COLLUSION and the FABRICATION OF DATA are serious disciplinary
offences. By uploading or submitting this cover sheet, I acknowledge that I am subject to disciplinary
action if I am found to have committed such acts.

Signature Mbem Gradiella M. Date 14th September

2017

For Academic Date Received Days Late Penalty as a %

Office use:
Agreed Mark

Final Agreed Mark

1
 MATERIALS MANAGEMENT AND OPERATIONS FLOW:
Case of Berger Precision (Kunshan) Co., Ltd.

Table of Contents
Page
Abstract 3

Introduction and background to the research topic 4

Project Objectives and Research Questions 5

Project Methodology 6

Literature Review 8

Project Implementations/ Results 12

Conclusions 12

References 13

Appendices

Word Count: 2400

Module Code: MAN??? (Proposal) IBSS Page 2

Abstract

There are a wide range of tools and managerial methods to optimize manufacturing process
productivity and planning, whereby accurate planning and control processing of materials and any
other supportive resources remain a challenge to nowadays manufacturing company. Lean in
manufacturing applied scientific method, and technique to improve performance with minimum non-
adding activities. It is important to note that, materials or resources management performance
directly impact on company production performance in term of quality, output, and the company
turnover, cost and overall profit.
This study will be conducted at Berger Precision Kunshan co., Ltd.; a manufacturing company which
processes steel as raw materials and specialized its services on product, process, Tool developments,
Assembly and many other supportive activities to customer requirements. The project will focus on
improving and optimizing process of materials planning and handling including warehousing,
materials consumption-output analysis, and production operation work flow.
This was all possible using process flow diagram and analysis are used as effective tools to
understand and improvement current processes; Observation and analysis of production processes
were conducted to identify processing which directly affect Berger Precision Kunshan (BPK) materials
management and other related waste. lean tools such as root cause analysis in problem findings and
analysis. Through application of lean principles; Inventory movement record, stock level monitoring
and materials request as new internal purchasing process were implemented and in addition to new
production Work in Process (WIP) output flow was designed to ease production processing. FIFO to
inventory handling, Kanban card signal system and supermarket FIFO in production bottleneck
process. At last not least, a new warehouse layout, storage and handling equipment were designed
and propose to optimize space utilization at BPK.
Due to time constraint and other internal factors not all solutions were fully utilized and
implemented. Therefore, it will be advisable to management to firstly carry on in further analysis
from production order data collection to evaluate output performance before making any changes to
planning. Then, proceed to a simulation or test analysis of some new process suggested in this
project.
Keys Words: lean tools, non-added value, performance, materials request form (MRF), FIFO (First in first out),

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Acknowledgements

Being admitted at XJTLU was a great opportunity to deep in my goal to pursue supply chain
management career. XJTLU’s scholarship program made easier and enable me to focus on my study.
This research is conducted through an internship period of six months which was facilitated by the
career development office of IBSS without which it wouldn’t be possible. Therefore, thank you to the
career office crew for the good work and assistance during those periods.

I am extremely grateful to Professor Hossam Ismail my supervisor for his guidance during this project.

Again, my gratitude goes to BERGER PRECISION (Kunshan) Co., Ltd the host company’s staff and Start
Up Factory Kunshan without their association in jointing resources, great supports and means for this
internship would not be as successful. Special thanks to Mr. Bernd Zoeberlein one of start Up Factory
partner and initiator of German Industry Park internship program for participating in the project,
Marcel Gut Berger’s finance and production controller, Brian Chen production supervisor for their
daily support and implication during this project; Mr. Dieter Heubuch and Mr. Thomas Moser for
their advice and guidance.
At last I would like to share the credit of work with my parent, and Family who always encouraged
and supported me to stand and overcome challenges during of my studies.

Module Code: MAN??? (Proposal) IBSS Page 4

1. Introduction and background to the research topic

For this study, the researcher is carrying out an internship at the named company for a period of six
months. The project proposal will firstly give a brief background summary of the study’s subject then,
present the project objectives which have the aim to effectively implement an effective materials
management enabling materials consumption tracking, traceability and cost reduction. Finally, an
overview of the methodology to be used in gathering data, supportive information for
recommendations and the method to be used during data analysis and the implementation phase.

Materials management was defined as the planning, directing, controlling and co-ordination of all
those activities concerned with materials and inventory requirement from the point of their inception
to their introduction into manufacturing process (L.J. De Rose, n/a). Jeff Alexander (2014) added that,
it has a major role in an organization and operational efficiency of supply chain by contributing in to
the customers’ satisfaction and overall company’s success. While acting as a backbone of
manufacturing processes.

Berger Kunshan Precision company manufacture furnished component to other manufacturing

companies in the automotive, tools manufacturers and many other actors in the mechanical industry.
The company transformed steels as its raw materials in bars shape with different diameter according
to the finished product to be produced. The high unit cost of most of the materials required a closed

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consumption control to scope with planning. Therefore, a risk such as rust issues, machines spindles
breakdown or wrong setting susceptible to affect materials utilization or consumption must be well
managed.

Whereby, the company is facing high materials cost which is constantly increasing, and unable to
justify those additional cost from planning. Inexpertly it was found out that there is no adequate
management of resources to production, translating by the absence of warehousing management,
over congestions in the warehouse storage caused by materials long dwelt or cycle time, absence of
materials request process flow and consumption control. Therefore, controlling and monitoring how
and how much materials are ordered (when, what quantity), consumed against output and its
consumption rate will help to analyse the root cause of the current situation and enable to
implement suitable operations technique to reduce materials cost.

2. Project Objectives and Research Questions

To implement and propose an effective materials management for better materials order planning,
materials consumption tracking, traceability and cost reduction as main objective, the researcher
during the execution phase must achieve pre- required objectives from the warehousing point of
view to production order execution stage. The objectives to be achieved are as follow:

 To create and implement a warehouse system record, storage layout and retrieval system
following FIFO procedure.
 To create and implement a materials request form used by production when requesting
materials for a production order.
 To be able to identify and track materials information used for any production order at any
point.
 To ease materials consumption and output analysis.
 To recommend new operations (production processes) flow using lean concept to improve in
processing products control.

To direct the study, the researcher will look through the following the questions:

 What are the factors affecting materials consumptions?

 What the company departments or processes directly affecting materials management?
 How materials are currently processed and handled?
 How materials are order planning and quantity is done?

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  What is the warehouse storage capacity and how to effective utilize it?
 What are the materials handling and utilization process flow?
 What are the causes of materials over consumption?
 What are the existing theoretical and practical measures to be implemented and suggested to
solve the problem?

3. Project Methodology

In the course of this study, data will be gathered as follow:

Data Collection:

Primary data will be gathered through observations and constant discussion with employees. The
secondary data will be collected from company data base system, Archived and all others relevant
sources.

Research Instruments:

The instruments used in this research to collect data were through:

- Interview / discussions: the company employees from production department, warehouse and
management staff were consulted on general business practices, daily operations and duties.
- Observations: during the project the researcher will be constantly conduct observations of all
related operations and activities necessary to conduct the research.
- In company data base system access: relevant information necessary for this project will be
consult and retrieve from the company data / achieves system daily.

Data Analysis:

The following are the qualitative data development methods undertake to analyse, assess data and
some recommendations.

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- Tables, Figures and Interpretations: tables and figures were used to represent and show finding
from discussion, interview and observations conducted. Interpretations of each tables and
figures will giving for better understanding of the findings.
- Fishbone Diagram: is used to identify the issues causes and effects to be deal with.
- Turbulence Audit and Impact Assessment: this will be used as an assessment tools to evaluate
and prioritize finding from fishbone diagram to determine area directly related to project topic
and deals with those issues which are feasible and within the researcher capabilities.
- Personal judgment: the researcher will also use this qualitative method to support the data
analysis.
- Continuous improvement of lean concept: for management and production related operations
optimization in minimizing waste (time and cost).

4. Literature Review
A review of online resources and papers achieved on previous research or studies done on the
project topic. Below is a brief introduction to main concept to be used and developed in this project.

4.1 Methods used to analyse data collected during this project:

4.1.1 Fishbone diagram

Commonly called a cause and effect diagram or Ishikawa diagram is a representative tool for
grouping the potential causes of a problem for identifying its root causes.

The Japanese expert in quality control called Dr. Kaoru Ishikawa invented the fishbone diagram to
assist employees in avoiding solutions that partly address the causes of a much deeper problem
(Margaret, R.,2015).

How to create a fishbone diagram:

The diagram looks like a fish’s skeleton and usually work from right to left whereby each large bone
of the fish branches out and include sub branches/bones containing more details. Margaret, R (2015)
in her article added that, this tool is used in the analytic stage of SixSigma Definition, Measure,
Analyse, Improve, Control(DMAIC) approach to solve a problem. And she went further by listing out
the root in creating a fishbone diagram:

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 - First identify the main issue to be studied and solved which will be the head of the fishbone.
- Drawing a backbone for the fish as straight line leading to the head.
- Then at least four causes contributing to the problem must be identified and connected with
arrows to the spine. These create the fishbone of the fish.
- For each cause things that contribute to their effect must be documented through
brainstorming using 5 whys or other questions root cause analysis.
- Go on until the root causes is identified.

Kerri Simon (n/a) suggested some fishbone categories as follow table and the fishbone diagram
example:
Table 1: Fishbone Suggested Categories (Kerri S., 2017)
Service Industries Manufacturing Industries Process Steps
(The 4 Ps) (The 6 Ms) (for example)
Policies Machines Determine Customers
Procedures Methods Advertise Product
People Materials Incent Purchase
Plant/Technology Measurements Sell Product
Mother Nature Ship Product
(Environment) Provide Upgrade
Manpower(People)
Figure 1: fishbone diagram example. (Kerri S., n/a)

4.1.2 Turbulence audit and impact assessment

Professor Hossam Ismail (2017) in his lecture introduced the Turbulence Impact Assessment (TIA)
objective as to identify and prioritise the turbulence factors impacting on an organisation operations
efficiency and growth. His workbook gathered and classify factors from their sources mixing internal
and external factors. Figure 2 give an example:

Fig1: environnement turbulence factor (Hossam, I., 2017)

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Turbulence Priority Index (TPI)

At this stage in his lecture explain that, this help in identifying and ranking turbulence factors
identified by allocating priority index to each factor. Figure 3 summarized the processes.

Fig.3: TPI processing example. (Hossam I., 2017)

4.2 Inventory/materials management concept in manufacturing industry:

Definition

The American Production and Inventory Control Society defines inventories as “stock items, kept at a
storage points, and used in multiple operations in a manufacturing or distribution process” (Fogarty,
& Hoffmann, 1983).

Importance

Jason Piatt (2012) in his online article highlighted that, because of machine sizes, the movement in
manufacturing process rely around people and materials/components not product. Whereby he
pointed four questions that, if accurately answered and analysed will open a large perspective to
process optimization. The following are the questions:

 How are the materials purchased?

 How are the materials received and stored?
 How are the materials moved?
 How are the materials presented to the production line?

4.3 Lean concept on process, operations improvement, and continuous improvement:

Definition

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From various online source, Lean was commonly defined as a systematic way to minimize waste
(MUDA) in a manufacturing industry while optimizing productivity (Eric B., n/a).

Concept of Lean in manufacturing and Continuous improvement

In Jim Womack and Dan Jones (1990) books “The machine that Changes the world and Lean
Thinking”, the authors enabled us to improve our knowledge of Lean, by moving the concept form
the Toyota practices to truly illustrating the principals which made the entire Toyota system works
approaching them as guiding principles.

On Leankit (2017) website, continuous improvement and respect of people were point out as the
pillar of Lean. Continuous improvement was then defined as a way to identify opportunities to
streamline operations and reduce waste to improve efficiency, effectiveness of value delivered. The
figure 4 below shows the analytic cycle in continuous improvement.

Fig4: continuous improvement cycle. (leankit, 2017)

The above literature review will be supported by reviewed published research from professors or
industry expert on companies which faced the same issues and the solutions. And finally, a review of
the company past attempt to solve the problem and the results.

4.4 Warehouse Layout and Materials Handling Equipment:

In supply chain optimization, warehouses are considered as area needing significant performances
improvement needed to be achieved (Won and Olafsson, 2005). Gu et al., (2007) added that,

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warehouses enable organizations to buffer the materials movement within the supply chain in
anticipation of changes caused by seasonality, unexpected customer order changes. Warehouse
layout could simply be defined as the floor plan and disposition of storage equipment, offices and all
area needed for materials management.

Warehouse Layout Designed:

Warehouse layout and design are very complex, whereby many trade-offs must be considered within
decisions which have conflicting objectives (Rouwenhorst et al., 2000). Many frameworks found in
the internet propose warehouse design and operations problems where Gu. Et al. (2007) proposes in
his publication three main linked areas such as design, operations, and performance evaluation.

Very few online resources paper about the redesigning of an existing warehouse, its challenges and
solutions. Among few, Tobiah R., (N/A) in final Bachelor study write a project proposal for a company
in USA whereby, the objective was to develop an alternative layout and plan that will improve daily
product handling, flow to adapt demand and sales fluctuations. From his proposal several layout
alternatives were proposed. Figure 5 as one of them.

Figure 5: current to alternative one proposed.（Tobiah R., n/a）

Layout disposition and aisles features:

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Colin Airdrie (2009) in his video introduced the main factors to consider when deciding on the floor
storage and layout through his FAST or fast pneumonic which stand for:

• F-Flow: regarding a suite of successive activities reducing motion waste.

• A-Accessibility: referred to production storage location, identification and picking system (FIFO).
Movement of picking equipment.

• S-space: being a restricting factor when planning for already built warehouse facilities. There
maximization for storage space allocation and display of storage equipment.

• T- Throughput: considering the product nature, velocity, dimension and demand frequency.
Therefore, balancing FLOW, ACCESSIBILITY, and SPACE have to be done enabling demand to match
with the throughput in quantity, and time.

In order to decide on which type of storage and handling equipment to choose, there are some
factors that need to be taken in to considerations. Figure 6 below shows aisle dimensions variance
from handlings trucks equipment’s types.

Fig 6: types of forklift and aisle. (Google, 2017)

5. Project Implementations/ Results

This section briefly presented the results content from the studies. The interpretations of data
collection analyses will be followed by recommendations that the researchers will find to be relevant
for the company continuous improvement. And on the other side as the study is conducted during an

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internship session, the researcher will have the opportunities to implement some of those
recommendations, observe the effects and bring some new ideas and processes where needed.

- Trial and error method test: this method will help the researcher in assessing and correcting
recommendations which will be implemented for them to fit and bring positive result to the
company while achieving the project objectives.
- Training: will be both for the researcher on certain software like Excel to create an effective
inventory system records.

6. Conclusions
The researcher will face challenges in data collections from employees, language barriers and limit
access to company data base all simultaneously acting as the limitations to the study.

7. References

Colin A.,(2009). Warehouse Design – Key Factors to Consider. http://www.logisticsbureau.com/warehouse-

design-key-factors-to-consider/ Accessed on 10th September 2017

Hossam I., (2017). Strategic operations management. Lecture semester 2 2016/2017. Xi’an jiaotong Liverpool
university, IBSS.

Jason Piatt (2012). Material Management in a High-Mix Production Environment: Four Questions that Identify
a Lean Operation. http://www.industryweek.com/operations/material-management-high-mix-production-
environment-four-questions-identify-lean-operatio Accessed on 6th September 2017

Gu, J., Goetschalckx, M., McGinnis, L. F., (2007), “Research on warehouse operation: A comprehensive
review”, European Journal of Operational Research, 177, 121.

Jeff Alexander., 7 November 2014. 4 Reasons Materials Management is Important to Manufacturers.

https://www.linkedin.com/pulse/20141107151745-16988556-4-reasons-materials-management-is-important-to-
manufacturers Accessed on 6th September 2017

Magee, J. F. and Boodman D. M., (1999). Production Planning and Inventory Control, 7th ed. New York.
https://www.lotsofessays.com/viewpaper/1700349.html Accessed on 10th September 2017

LeanKit (n/a). WHAT IS CONTINUOUS IMPROVEMENT? https://leankit.com/learn/kanban/continuous-

improvement/ Accessed on 10th September 2017

L.J. De Rose, (n/a). Materials Management: Meaning, Importance and Functions. Article shared by
Venkatesh.http://www.yourarticlelibrary.com/material-management/materials-management-meaning-
importance-and-functions/53156/ Accessed on 6th September 2017

Kerri Simon (n/a). The Cause and Effect (a.k.a. Fishbone) Diagram.
https://www.isixsigma.com/tools-templates/cause-effect/cause-and-effect-aka-fishbone-diagram/ Accessed on
10th September 2017

Module Code: MAN??? (Proposal) IBSS Page 14

Margaret Rouse (2015). fishbone diagram. http://whatis.techtarget.com/definition/fishbone-diagram
Accessed on 10th September 2017
Rouwenhorst, B., Reuter, B., Stockrahm, V., van Houtum, G.J., Mantel, R.J. e Zijm, W.H.M., (2000),
“Warehouse design and control: Framework and literature review”, European Journal of Operarional
Research,122, 512-533.

Tobiah R., (n/a). Warehouse Redesign Of Facility Layout, Racking System And Item Classification At
Sunrize Tackle Inc.
http://passthrough.fw-notify.net/download/460315/http://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?
article=1001&context=imesp accessed on September 10, 2017

8. Appendices
Project Time Schedule

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