For over four decades, Hanwha Techwin has been a major player in the precision machinery industry, with a track record of successfully expanding its business to encompass areas such as semiconductor manufacturing equipment, turbo compressors, and self-propelled artillery. Additionally, the company has also made a name for itself in the production of high-tech multimedia products. With its cutting-edge technology in the precision machinery field, Hanwha Techwin is poised to become a global leader in Safety & Energy. The Power Systems Division specifically focuses on aircraft engine, engine parts, and energy equipment businesses.
Project Background & Goals
Hanwha Techwin, a leading player in the precision machinery industry, has expanded its business domain to include the production of high-tech products such as aircraft engines, camera equipment, semiconductor manufacturing equipment parts, turbo compressors, and self-propelled artillery. The Power Systems Division of Hanwha Techwin, which specializes in the aircraft engine, engine parts, and energy equipment business, has implemented a Supply Chain Management (SCM) solution provided by Zionex to support the Engineer To Order (ETO) production method. This method, also known as "custom design production strategy," involves producing products with individual designs as requested by each customer. However, Hanwha Techwin faced challenges such as longer lead times for customer delivery, unsynchronized plans between factories, and difficulties in promptly responding to orders and changes in specifications. The implementation of Zionex's SCM solution aimed to address these issues and improve inventory reduction and customer on-time delivery rate by establishing a weekly and monthly production execution planning system that takes into account equipment capacity and material availability.
With the implementation of the SCM solution provided by Zionex, Hanwha Techwin embarked on a project to optimize its ETO (Engineer-to-Order) production method. The ETO strategy, also known as the "custom design production strategy," involves creating individual designs for each customer order. However, prior to the implementation of the SCM solution, Hanwha Techwin faced challenges such as long lead times for customer delivery, lack of synchronization between factory plans, and difficulty in responding promptly to changes in customer specifications.
To address these issues and improve inventory reduction and customer on-time delivery rates, Hanwha Techwin implemented the following four key strategies:
- Automation of production planning and management tasks to streamline the process and reduce human error.
- Establishment of an advanced management system that forecasts equipment load status and inventory levels on a monthly and weekly basis.
- Implementation of a system that can re-formulate the production plan within one hour in response to changes, and synchronization of information between delivery date, production plan, and material requirements schedule to ensure prompt response to changes.
- Use of a tool for monitoring continuous planned performance comparisons to track progress and identify areas for improvement.
As a result of this SCM solution implementation project, Hanwha Techwin was able to significantly reduce parts inventory days, improve production planning compliance, and achieve an implementation rate of daily work plans of over 90%. Additionally, the company was able to reduce process waiting time and reduce lead time.