Case Study In The Electronics Industry

Shunxin Electronics Co., Ltd.

Usage:

Hongxin Electronics is one of the earliest successful clients to implement the software developed by Manager Jiang. In the early days, they successfully introduced the BOM and MRP systems using DOS. This was primarily driven by Chairman Gao’s planning and strong determination. The product encoding principles and BOM structure were established through numerous meetings and discussions, in which Chairman Gao actively participated. At that time, there were not many enterprises with the concept of computerization, either due to lagging concepts or reluctance to spend money. Manager Jiang, the general manager of Jiang’s Computers at the time, attached great importance to this opportunity and personally led the coaching efforts. Aligning the company’s SOP processes with actual SOP computer operations was a challenging task. After six months of adjustment, the system finally went live.

Performance after ERP implementation:

  1. Each computerized step required the formulation of operation specifications and positioning of when operators should perform which tasks, guiding operators on computer data entry to get them on track. This ensured internal auditing and control.
  2. The BOM structure ensured that material lists were planned in advance to prevent incorrect material usage or procurement errors during production.
  3. MRP operations: After production changes were made, the MRP could generate a material requirement list, which was then compared with inventory levels and expected inflow and outflow to generate a shortage list. The system would then automatically compare prices and identify suitable suppliers for conversion into purchase orders.
  4. Inventory decreased by 30% – 50%. Through functions such as safety stock planning, sales, and production demand planning, the MRP could reduce inventory investment by 30-50% and increase inventory turnover by 50%.
  5. Delayed deliveries reduced by 80%. By obtaining the optimal production date through production planning, on-time delivery rates increased by an average of 55%, while delayed delivery rates decreased by an average of 35%, improving customer satisfaction.
  6. Lead time shortened by 50%. Batch purchase planning through MRP reduced the time spent by purchasing personnel on document processing. Purchasing staff could focus on value analysis, source selection, negotiating strategies, understanding production issues, and thus shorten procurement time.
  7. Downtime due to material shortages decreased by 60%. Through MRP planning and improvement of production and procurement plans, part demand transparency was increased, ensuring timely and accurate arrival of parts. Estimated reduction in downtime due to material shortages was 60%.
  8. Manufacturing costs reduced by 12%. Taking into account the comprehensive effects of reduced inventory, reduced downtime (labor savings), and savings in procurement costs, it is estimated that manufacturing costs have decreased by 12%