tocico 2009 conference tocico conference 2009 “slti f pt i ... · content of presentation tocico...

TOCICO 2009 Conference

TOCICO CONFERENCE 2009TOCICO CONFERENCE 2009

“S l ti f P fit ” “Solution for Profits” Fashion Design Company on

Product Factory in China – from disaster to

recovery and profits !Presented ByPresented By: : Mr. Albert Kwok, Harbona Packaging Co. Ltd.Mr. Albert Kwok, Harbona Packaging Co. Ltd.

1© 2009 TOCICO. All rights reserved.

yy , g g, g gMr. Henry Soo, Mr. Henry Soo, DataDevelopDataDevelop Consulting Ltd.Consulting Ltd.

Date:Date: Nov., 2009Nov., 2009

From disaster to recovery and profits !TOCICO 2009 Conference

2008 is a year of disaster for Harbona Packaging Co. Ltd - one of the plastic bag manufacturers in China The disaster is not alone for Harbona but for manymanufacturers in China. The disaster is not alone for Harbona, but for many companies which are suffered from the economic tsunami. The disaster was brought forward by the appreciation of RMB, drastic rise of material cost, coping with the shrinkage of the market demand. In addition to economicalcoping with the shrinkage of the market demand. In addition to economical factors, Harbona suffered also from the natural disaster of an accidental flooding and so on …..

Confronting with many negative factors Harbona determinates to strike forConfronting with many negative factors, Harbona determinates to strike for survival with decisive management philosophy which had just been implemented. It is called “Solution for Profits in TOC way by DataDevelop Consulting Ltd.” in Hong Kong SAR, China. To take a step further, HarbonaConsulting Ltd. in Hong Kong SAR, China. To take a step further, Harbona takes the course to “sharpen” the management thinking by restructuring the whole management operation. The objective is now not only strike for survival but strike for more profits. Harbona is taking TOC way for bigger leap in the business. Harbona is looking for “It’s not luck” in the middle of the “crisis”. This is opening story how Harbona ‘s disaster recovery to become TOC-based company.


Content of presentationContent of presentationTOCICO 2009 Conference

• History and milestones of our companyHistory and milestones of our company

• Up and down in the past decades

Ch ll i i i i i d• Challenging situation in industry

• Market re-positioning

• Decision for Change

• Desire for Change• Desire for Change

• Discipline for Change

• Determination for Change

• Reflection on the TOC Journey


y

• Acknowledgement

Karma with TOC Karma with TOC -- my my mentor in Philips…mentor in Philips…TOCICO 2009 Conference

1984 1984 first first

editionedition

Karma with Mr. Henry Soo of DataDevelop Consulting Ltd. Why my decision to go for TOC within 5 minutes ?


Why my decision to go for TOC within 5 minutes ?

History of HarbonaHistory of HarbonaTOCICO 2009 Conference

• Harbona was formed in 1979 with 13 partners• Harbona was formed in 1979 with 13 partners

• 1980 2 sets of old machines, 120 sq. M. factory in Hong KongHong Kong

Let us enjoy one 5 minutes video to see our somewhere in timesomewhere in time


Major milestones of HarbonaMajor milestones of HarbonaTOCICO 2009 Conference

• 1981 start to export orders• 1981 start to export orders

• 1983 moved into factory building with 280 sq. M

• 1989 rent 1,200 sq. M factory in Shenzhen, China

• 1990 move into new factory with 13 production lines y p9 months 24 hours of non-stopped production

• 1992 buy the land 5,400 sq. M in Tangxia, Dongguany , q g , gg

• 1993 move into new 3,840 sq. M factory building, buy another land 8,220 sq. M, q

• 1995 Sunwill joined the company for laminated bags

2000 b i t bl t f 600 t / th6

© 2009 TOCICO. All rights reserved.

• 2000 business stable to grow for 600 tones/month

Up and down in the past decadesUp and down in the past decadesTOCICO 2009 Conference

• 2002 Business is going down with more competitors• 2002 Business is going down with more competitors

• 2004 Business in loss

• 2005 Material cost went from USD600

• 2006 TOC was introduced by Mr. Henry Sooy y

• 2007 Accident in factory and operation suspended

2008 Material went up to USD2000 and water flooding• 2008 Material went up to USD2000 and water flooding in June and caused huge lose in this year

W d id i i i i S t 08• Word wide economic crisis in Sept., 08

• Insist TOC injection after crisis


• 2009 Harbona is recovering from the disaster with profitability gain

Challenging situation in industryChallenging situation in industryTOCICO 2009 Conference

• Confronting with the basic client requirements the• Confronting with the basic client requirements, the company had to acquired certifications like ISO, GMP, Kosher…

• The competition became severe in prices delivery lead time. The material cost was on a upward trend. Harbona was looking for a revitalization and implemented TOC as a vehicle for change.

• In the TOC journey, Harbona was not an exception from the other companies confronting with the economic down turn especially in the late 2008economic down turn especially in the late 2008.

• With TOC Harbona is looking for What to change to and Ho to ca se the change


and How to cause the change

Market reMarket re--positioningpositioningTOCICO 2009 Conference

• What is important for our customers ?• What is important for our customers ?− Reliability

Responsiveness− Responsiveness

− Flexibility

V l dd d f t ’ d t− Value-added for customer’s products

• Re-forming the market segments by gaining highest value for customersvalue for customers


Fashion for your productsFashion for your productsTOCICO 2009 Conference


Decision for ChangeDecision for ChangeTOCICO 2009 Conference

• After lunar new year of 2009 board members had• After lunar new year of 2009, board members had held the 3 days of in-depth dialogue about the strategic direction of Harbona and whole team members are aligned with same Vision, Mission and Value

• In April 09 , Harbona has entered one new agreement with DataDevelop Consulting Ltd. to extend TOC for holistic implementation by Solution for Profits modelholistic implementation by Solution for Profits model – Quantum Vision


Management Management commitment in dialoguecommitment in dialogueTOCICO 2009 Conference


Desire for ChangeDesire for ChangeTOCICO 2009 Conference

• Project Time-line• Project Time-line

• How TOC save company and recover ?− Water flooding in June of 2008

− Highest oil price


Project TimeProject Time--linelineTOCICO 2009 Conference

2006 End

SDBR

2007 Mid.

Pending

2008 June

Restart• SDBR Pilot in zipper bag

• Pending after accident

• Restart after water floodingbag flooding disaster

H li ti

2009A il Holistic

implementation for plain, zipper, lamination bag

April


lamination bag

Water flooding in June of 2008Water flooding in June of 2008TOCICO 2009 Conference

Operation was Operation was suspended for suspended for aa while while and we and we are still are still k ik ikeeping keeping lowest TDD lowest TDD after disasterafter disaster


How TOC save company and recover?How TOC save company and recover?TOCICO 2009 Conference

Highest oil price and Highest oil price and lowest inventory to retain lowest inventory to retain

cash and reducecash and reduce risk !risk !

Monthly Inventory Level

cash and reducecash and reduce risk !risk !

Raw Raw material material supply supply

according according to TOC to TOC DBMDBM


Apr

Jun

Aug Oct

Dec Feb

Apr

Jun

Aug Oct

Dec Feb

Apr

Jun

Aug Oct

Dec Feb

Apr

Jun

Determination for ChangeDetermination for ChangeTOCICO 2009 Conference

• Commitment of our management and members• Commitment of our management and members

• How to induce people for change ? − Vision

− Mission

− Value


Commitment of our management and membersCommitment of our management and membersTOCICO 2009 Conference


How to induce people for change ? How to induce people for change ? TOCICO 2009 Conference

Symbolize and visualize the changeSymbolize and visualize the change


Discipline for ChangeDiscipline for ChangeTOCICO 2009 Conference

• How to cause the change ?• How to cause the change ?

• How to ensure the people making the change consistently ? Gain sharing plan with employeesconsistently ? Gain sharing plan with employees


How to cause the change ?How to cause the change ?TOCICO 2009 Conference

Synchronization and Communicationy


How to ensure the people making the change How to ensure the people making the change consistently ? Gain sharing plan with employeesconsistently ? Gain sharing plan with employees

TOCICO 2009 Conference

Current target tCurrent target throughputhroughput gapgap

Scrap lessReturn lessThroughput higher

T t thlTarget monthly average level

Adjustment is higher than estimation

Scrap moreReturn moreThroughputThroughput lower

Before stock


Open communication and post in notice board

adjustmentAdjustment is lower than

estimation

Reflection on the TOC JourneyReflection on the TOC JourneyTOCICO 2009 Conference

• Operation improvement with performance data• Operation improvement with performance data

• Sales and Marketing

• Management teamwork improvement

• Difficulty on the way and obstacles to overcomey y


Operation improvement with performance dataOperation improvement with performance dataTOCICO 2009 Conference

99% 99% DDPDDP

Water Water floodingflooding

DDPDDP



Substantial Substantial Zero Zero Throughput Throughput Dollar Days TDD Dollar Days TDD with Reliabilitywith Reliabilityyy



Substantial reduction Substantial reduction in WIPin WIP with with ResponsivenessResponsiveness



Substantial reduction Substantial reduction in total inventory with in total inventory with less cash pressureless cash pressure

Monthly Inventory Level

Apr

Jun

Aug Oct

Dec Feb

Apr

Jun

Aug Oct

Dec Feb

Apr

Jun

Aug Oct

Dec Feb

Apr

Jun



Improvement inImprovement inImprovement in Improvement in productivity for T/OE productivity for T/OE

ratioratio

Productivity Ratio - Profitability

1.4 1.6

0 20.4 0.6 0.8 1.0 1.2

0.0 0.2

Productivity (T/OE)


Sales and Marketing Sales and Marketing TOCICO 2009 Conference

• Re-segmenting target market by customer’s value• Re-segmenting target market by customer s value

• Re-forming the sales team across regions

• Re-establish the link the sales and customer services

• Re-focus on market with highest throughput ratiog g p


Management teamwork improvementManagement teamwork improvementTOCICO 2009 Conference

Bi-weekly operational review meeting in factory andand

Weekly top management communication


Difficulty on the way and obstacles to overcomeDifficulty on the way and obstacles to overcomeTOCICO 2009 Conference

• Re-training the sales force in new value and• Re-training the sales force in new value and positioning statement

• Re-forming the sales commission as win-win-win• Re-forming the sales commission as win-win-win situation

• Market demand is decreasing• Market demand is decreasing

• Green production in environmental regulation

• Food packaging safety regulation


Testimonials on toc.tvTestimonials on toc.tvTOCICO 2009 Conference

4 D story in Harbona


AcknowledgementAcknowledgementTOCICO 2009 Conference

• Thanks for my God’s blessing• Thanks for my God s blessing

• Karma with TOC from my mentor in Philips

• Coaching from Goldratt Schools

• Partnering consultants from DataDevelopg p

• Whole team of Harbona’s members and management


End of presentationEnd of presentationTOCICO 2009 Conference


About [Mr. Albert Kwok]About [Mr. Albert Kwok]TOCICO 2009 Conference

Mr Albert Kwok Leung Bute Managing Director ofMr. Albert Kwok Leung Bute, Managing Director of Harbona Packaging Co. Ltd.

••He had previously work in a multinational electronic He had previously work in a multinational electronic manufacturing business for over twenty years. During manufacturing business for over twenty years. During that period he had been working in different capacitythat period he had been working in different capacitythat period he had been working in different capacity that period he had been working in different capacity within the manufacturing environment including quality within the manufacturing environment including quality control, logistics, industrial engineering and information control, logistics, industrial engineering and information technology etctechnology etc.••He is now the director and one of the founder of He is now the director and one of the founder of Harbona packaging Co. Ltd. The company had been Harbona packaging Co. Ltd. The company had been p g g p yp g g p yestablished for nearly 30 years with core business in established for nearly 30 years with core business in plastic bag manufacturing. From time to time, he will plastic bag manufacturing. From time to time, he will lecture in various organization in Hong Kong sharing lecture in various organization in Hong Kong sharing his past experience in management.his past experience in management.••He is also a Certified Six Sigma Black Belt and a He is also a Certified Six Sigma Black Belt and a certified enterprises trainer in Chinacertified enterprises trainer in Chinacertified enterprises trainer in China.certified enterprises trainer in China.

Mr. Albert Kwok Leung ButeDip MS, H Dip EE, Dip in Mktg, AMAIA,

MIEEE, MASQ, MHKSQ, MCIM, MAPICS, MHKQMA, FLMI, PCS, HKRFP, MHKMA,

LLB,MBA

- email: [email protected]


About [Mr. Henry Soo]About [Mr. Henry Soo]TOCICO 2009 Conference

Mr. Henry Soo, Managing Director of DataDevelopy , g g pConsulting Ltd. and Director of Operation - ISCEA (International Supply Chain Education Alliance –Hong Kong, China

•He is a Certified Practitioner by TOCICO (Theory of y ( yConstraints International Certification Organization) in Supply Chain Logistics and TOC Fundamental and a Trained Project Manager (by Goldratt Consulting and Goldratt Schools).•He is a Certified Lean Master (CLM™) by ISCEA US. He is a Certified Six Sigma Black Belt by InternationalHe is a Certified Six Sigma Black Belt by International Academic for Quality Certification (IAQC) with 20 years experience of implementing enterprise software in companies throughout Greater China, will provide a range of services to highlight the power and capability of TOC, Lean, Six Sigma, ERP recovery and SCOR modeling. Now, DataDevelop focuses to providemodeling. Now, DataDevelop focuses to provide solution for profits growth without taking real risk and significant investment.•He is also Professional member of HKLA (Hong Kong Logistics Association), Vice President of Six Sigma Society of Hong Kong, member of HKMA and member of Hong Kong Society for Quality

Mr. Henry Soo-Managing Director of DataDevelop Consulting Ltd. www.datadevelop.com

of Hong Kong Society for Quality•He is Authorized Education Provider (AEP) of APICS•Founding member of TOC Learning Network – Asia PacificMy ultimate goal is helping our customers to succeedMy ultimate goal is helping our customers to succeed

- Director of Operation , ISCEA – HK, Chinawww.iscea.hkemail: [email protected]


My ultimate goal is helping our customers to succeedMy ultimate goal is helping our customers to succeed

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