New business boost through production planning system - Tieto

Customer case: Luvata Hitachi Cable Thailand Ltd
Lean System ®
New business boost through
production planning system
Luvata Hitachi Cable Thailand Ltd (LHCT) is the fastest
growing supplier of air conditioning (AC) installation
tubes in Thailand. The economies of scale, the aim at
catering for the local market with world-class quality,
and the fluctuating air conditioning demand in Asia, pose
great challenges for the production planning system.
LHCT is engaged in the manufacture
of smooth and inner grooved copper
tubes for the AC industry in the South
Asian market. The company employs
270 people and produces about 18
000 tons of copper tube annually, its
customers being major Japanese AC
manufacturers in Thailand as well as
subcontractors supplying heat exchangers
and piping parts. Especially
Japanese customers demand just-intime
deliveries, which are not possible
without a proper production planning
system.
Challenging production planning
LHCT wanted to solve three problems
in production process with the help of
a new production planning system.
“The amount of work orders had
grown too big to be scheduled manually,
the shop floor control system was
missing thus making it appear like a
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black box, and there was no transparency
between different functions in
the supply chain,” explains Jouni Satola,
managing director of LHCT.
Tieto’s Lean System with Works
Balancer was chosen as the solution.
During the implementation of Lean
System with Works Balancer, the
company was still part of the Finnish
Outokumpu Group. Lean System with
Works Balancer was known to be a
proven concept with low risk, as Tieto
had successfully delivered the system
to Outokumpu before. The implementation
was completed in just five
and a half months, a month ahead of
schedule.
The main target for the Lean System
was to have a modest 15 percent
increase in the monthly production
capacity. Until today the company
has reached an 80 percent increase in
the capacity mainly by developing pro-
“The amount of work
orders had grown too
big to be scheduled
manually.”
Jouni Satola, LHCT

Customer case: Luvata Hitachi Cable Thailand Ltd
cesses in accordance with lean manufacturing
principles and only with some
minor investments on the equipment –
and with 7 percent fewer people.
According to Warapot Leaungwutiwiroj,
production manager at LHCT,
the average lead-time has decreased
from eight to only three days.
“At the same time the inventory
turns have dropped from 40 days to
only seventeen days at present,” says
to Rungrot Juntharatip, IT-manager.
Great sales support tool
Due to the fluctuating AC demand in
Challenge
The production planning system at LHCT was facing many
challenges. The amount of work orders had grown too big to be
scheduled manually, the shop floor control system was missing thus
making it appear like a black box, and there was no transparency
between different functions in the supply chain.
Solution
Tieto’s Lean System with Works Balancer was chosen as the
solution. During the implementation, the company was still part of
the Finnish Outokumpu Group. Tieto had successfully delivered
Lean System with Works Balancer to Outokumpu before so it was
known to be a proven concept.
Results
The main target for the Lean System was to have a 15 percent
increase in the monthly production capacity. This target has been
exceeded by far. The company has reached a 80 percent increase
in the capacity mainly by developing processes and only with some
minor investments on the equipment – and with 7 percent fewer
people. The average lead-time has decreased from eight to only
three days and the inventory turns have dropped from 40 days to 17
days.
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For further information please contact leansystem@tieto.com
Asia, the company has developed a
gate-keeping method for facilitating
sales. A diagram provides sales people
with an up-to-date load situation
of bottleneck resources. This helps
them to proactively make customers
promises they can keep. Production
planning manager Surasit Hiranyapuek,
who is responsible for planning
and coordination with sales at LHCT,
tells that he normally uses Works
Balancer once a week for planning,
checking the changes and for scheduling.
The average leadtime
has decreased
from eight to only
three days. “
Warapot Leaungwutiwiroj,
LHCT