Best Practice of Automotives

"Automated palletizing and container stuffing plan gives flexibility to KD business"

Operations Fields: Knockdown Plants, Hyundai Motor Company
Application: CubeMaster.NET

Background

Because of trade conflict between economic blocks, increasing transportation costs and, demands for KD exports are increasing. Yet, bottlenecks in the process of palletizing and container stuffing, which are indispensable for KD plants, prevent manufacturers from handling efficiently with ever-increasing orders. Customers complain about the delay, while workers are voicing their dissatisfaction about heavy workloads.

Objective

The objective of this project is to enhance flexibility in dealing with orders by resolving the bottleneck problem using CubeMaster.NET™ - automating palletizing and container stuffing.

How they applied CubeMaster.NET™ to their fields

Let‘s see how they could address their problems by using CubeMaster.NET™ below table. As shown in table, by using powerful simulation functions provided by CubeMaster.NET™, Hyundai Motors could cut logistics costs and boost flexibility and productivity with proper information on transportation volume, workloads (Man-hour) and so on.

Business	Before Activities	After Activities
Order Receiving	Determine order quantity based on a multiple of 30 lots.	Confirm order quantity based on transportation volume calculated by simulations.
Palletizing	Conduct tests at the real production lines with real automobile parts.	Reflect various situations and features of parts in executing simulations.
Palletizing	Create loading data by photographing and manual work.	Automatically generate 3-dimensional graphics through simulations and pattern editing.
Production Management	Determine required packaging materials in the process of palletizing.	Enable users to estimate needed packaging materials and the cost of them before actual packaging.
Production Management	Have difficulty in computing working hours required for real workload.	Enable users to estimate Man-hour for specific workload by estimating transportation volume.
Container Stuffing	Create layout data on each shipment manually.	Automatically generate 3-dimentional graphics through simulations and pattern editing.

Expected Customer Values / Benefits

As the results of applying the CubeMaster.NET™ to their fields successfully, they could solve bottlenecks and many troubles in their process to sharpen competitive advantages as a table below.

	Introduction Effects	Competitive Advantages
Logistics	Reduce the amount of palletizing materials and pallets required. Reduce # of containers required.	Reduction in costs. Increase in customer satisfaction. Increase in productivity. Increase in flexibility.
Customer	Increase accuracy of meeting the delivery date. Increase the ability to track orders and reduce. errors in invoices.
Quality	Reduce re-working.
Production	Reduce working hours in packaging and loading. Compute estimated workloads.

ROI

The table below shows the summary of costs reduction in each process and analyses of ROI and payback period based on this information. As presented in the table, $7,500 can be saved a month in palletizing, stuffing and delivery. Also, $16,000 can be saved in overseas delivery costs a month. Thus, investors can retrieve their original investments in less than 6 months and 4 times as much as their original investments over two years.

		Cost	Remark
Investment		$ 108,000	IT Investment
Cost Down	Reduced Palletizing Costs	$ 5270.3 / Mon
	Reduced Container & Delivery Costs	$ 1,700 / Mon
	Reduced Direct Labor Costs	$ 533.7 / Mon
Reduced Costs / Mon		$ 7,504	Benefit to HMC KD Factory
Oversea Delivery Costs		$ 16,000	Benefit to Oversea Factory
Total Reduction Costs / Month		$ 24,504
Life of The Project		24 Month
ROI (return on Investment)		At Least 400 %
Payback Period		Less Than 6 Month

For more information about this project, contact Dr. Andrew Chang by sending an email.