Case Study - Chubuseiki
Gained a better understanding of total costs through integrating with the accounting system and succeeded in changing the awareness of inventory.
Founded in 1951 as an affiliated company of Chubu Electric Power, CHUBUSEIKI is engaged in the manufacturing, selling, and repairing of electric meters, voltage detectors, seismic detectors, etc., by utilizing the technology and experience acquired over more than 60 years. The company is also developing a smart meter that has a communication function and is one of the critical devices of the power grid “smart grid,” monitoring and operating the entire system, including communication, and supporting efficient electricity use. CHUBUSEIKI is also working on new services such as “visualization” of usage status.
Brief information about the company:
Number of Employees: 398
Headquarters Location: Aichi prefecture, Kasugai city
Founded in 1951 August
Industry: Electrical machinery and equipment manufacturing
The company has been using a built-in production management system since 2005, but at the time, there were business tasks such as:
1) Despite entering the daily work report, the actual cost, including labor costs, has not been grasped and analyzed correctly.
2) The existing system did not include inventory management.
To deliver high-quality and low-price electricity meters to the customers, CHUBUSEIKI conducted a cost analysis and considered introducing a new manufacturing management system. When considering the implementation of a new system, the main product, the watt-hour meter, was just released before the transition from the conventional disk-rotating meter to a smart meter that also has a communication function. The price competition of smart meters was more intense compared with a traditional watt-hour meter. Therefore, the company had to cut costs.
Selection criteria for a new system
The company considered three other companies’ package software and ultimately decided to select Factory-ONE because it was possible to customize the software.
Challenges while implementing a new system
The road to operation was quite challenging. We talked to almost everyone, from the group leader class to the people in charge, and determined all the issues and problems. There were various requests from each department regarding the new system, from small ones to those that could be very difficult to realize. Since there was no coordinator for manufacturing management, it took a considerable amount of time to sort out and solidify the requirements definition. Our representative created a task management table and checked off all the tasks.
If the target range managed by the system is small, later maintenance will be easier, so customization was suppressed as much as possible, and the input environment was improved by adding extra service functions without changing the system itself, thus, making it easier for the person in charge to use the system. When creating a business operations flow, we gained an understanding of the internal processes of the company by clearly dividing the business operations flow into “target business operations,” “additional service functions,” “customization,” and “non-target business operations that will not be included in the system.”
Even so, since the new system has a wide range of targets such as order receipt, order placement, inventory, shipping, and many other input items, requests started to come from each department such as “the operation was simpler before,” “we would like simpler operations” and so on. Through teaching and explaining how to operate the system to each department, workers in charge learned how to handle the system effectively.
After the test was completed and the pilot operation started, operational issues arose. Inventory changes along with the manufacturing management system, but problems occurred in parts that had been unclear due to the connection of each department, such as the delivery of slips, the timing of input to the system, and inventory. Since it was difficult to coordinate between the departments, we entered into arbitration of various cases and decided the rules.
At the end of the day, we managed to build a customized manufacturing management system that would benefit the company’s business operations and business analysis.
Benefits and Results
Now CHUBUSEIKI understands and analyzes the cost of products in more detail than before. Compared to the conventional system, the newly implemented system enabled to grasp of the processes from order receipt to sales recording and improved these processes. In addition, in terms of cost understanding, the primary purpose of the implementation, the company got a clear image of manufacturing overhead cost generation by integrating Factory-ONE with the daily work report and the accounting system.
In addition, after implementing Factory-ONE, which also includes an inventory management system, each department was able to monitor and grasp the inventory in real-time and thus, was able to change their awareness of inventory.
In the future, the company plans to consider implementing EDI service to reduce costs further while optimizing the entire supply chain management.