Total Flow Management (TFM)

• Effectively reduce inventory and quickly increase profits
• Focus on timely delivery of orders to improve overall factory flow
• Typical pain points encountered by manufacturing companies in inventory and delivery:

• Low on-time delivery rate, delivery cycle exceeds market acceptable delivery cycle, low customer satisfaction
• High inventory capital occupation, huge gap with domestic and foreign outstanding peers
• Tight cash flow, currently due to factors such as the epidemic and trade war, the supply chain is more unstable, key raw materials are scarce, delivery time is long, and raw material prices continue to rise;
• For finished inventory, customers require VMI supply, with a long account period (invoice time + account period + acceptance), leading to tight cash flow in many manufacturing factories, and the increase in capital costs further squeezes profit margins.
• Lack of complete materials for production, and advanced production lines are unable to play their advantages due to the shortage of materials, resulting in low efficiency and high production costs.
• Lack of lean supply chain talent within the factory

Benefits of implementing the Total Flow Management (TFM) solution:

• Production efficiency +20%
• Inventory -30%
• On-time delivery rate +30%

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Implementation of TFM in a Discrete Factory (Case Study: Ship Engine Factory in Jiangsu):

The overall goal of inventory management is to transform the existing bimodal distribution, where excessive inventory and material shortages coexist, into a unimodal distribution where all materials are in the optimization region.

To achieve this goal, the following steps can be taken:

Step 1: Establish a raw material inventory buffer to reduce material shortages in the factory.

Step 2: Use lean tools to quickly streamline internal flow in the factory, reduce batch sizes, and ensure completeness.

Step 3: Use the OPEX-1588 business process tool to discuss finished goods inventory strategies and establish a PSI supply and demand balance plan.

Step 4: Improve the overall inventory plan and use low-inventory finished products to meet delivery requirements.

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