HANGZHOU TOKA: Detail-oriented management expert in chemical engineering – A case study on production and cost management

HANGZHOU TOKA: Detail-oriented management expert in chemical engineering – A case study on production and cost management

The degree of association and refinement of the previous system simply cannot be compared with the system currently in use. K/3 helps us to manage the data at the bottom level. With the use of lot number management, lot number can be matched with storage space. The system can then lock the lot number with corresponding storage space in dispatch of goods. If problem was found in specific lot, we could find out who is the customer of this lot of products and can fully recall the problematic products and trace the origin of the problem Logistics Manager, Hangzhou Toka
——Principal, Hangzhou Toka

Corporate profile

Founded in 1988, Hangzhou Toka is one of the 3A companies in the printing ink industry of China. Conceived with the strategic development goal of “High Starting Point, High Efficiency, and High Yield”, the Company produces from 3800 tons to 30000 tons of product annually after more than 20 years of development. The annual sale volume exceeds CNY900 million. In 2002, the Company was cited as “An Advanced Industry in Qualify Efficiency of China”. Hangzhou Toka has been accredited with the ISO 14001: 2004 international standard in environmental management system for clean production. This helps to improve the management capacity of the company and its internationalization.

The challenges:

Hangahou Toka has made a tremendous effort in upgrading its capacity in corporate management. In the early 21st century, the Company faces increasing pressure from procurement, manufacturing, and sales due to capacity and sale expansion. The traditional model of operation by hands can no longer meet the needs of the operation in a large scale. Indeed, Hangzhou Toka has established an information system earlier and the scope of application of this system covers purchase, sale, inventory control, and finance. There is no integrated planning and implementation of this system that cannot meet the needs of management upgrades. The Company then introduced another software system from overseas but this system still cannot satisfy the specific needs of the chemical engineering industry and is difficult to localize. The program was then canceled. Hangzhou Toka has pressing needs in introducing a more scientific, more reasonable ERP system amendable to the actual needs of the printing ink industry as the platform for corporate management.

The Solution:

The Kingdee K/3 is mingled with the practice of outstanding corporate management of the chemical engineering industry of China, which helps Hangzhou Toka with a total solution including group financial management, subsidiary financial management, SCM, manufacturing management, HR management, OA, CRM, mobile commerce and second development for meeting the needs of the application to its diversity of industries. It helps the Company to integrate its logistics, capital flow, information flow and external resources multilaterally.
• Through the MPS/MRP/task management, the Company can realize the reasonable coordination between the inventory level and manufacturing orders, timely feedback from production and the effective control of materials;
• Through batch costing, cost control can be more refined;
• Integration of batch management and warehouse space management allows for full tracking of quality.

Value of application:

• CNY15 M: reduce inventory level by more than CNY15 million (including the inventory of materials, semi-finished goods and finished products);
• 99.5%: After the launch for 1 year, K/3 has helped to improve inventory accuracy from less than 90% to 99.5%.
• 110 times: Management of warehousing and dispatch has been improved by at least 10 times accuracy for the realization of FIFO.
• 7 times: Inventory turnover at about 1.6 months and about 7 times in one year (100% better than industry peers)
• 100% traceability in quality management: automatic generation of lot numbers from warehousing materials to production job orders. The system will follow the principle of FIFO in materials dispensing and dispatch of finished products for shipment through matching with relevant lot numbers and storage space. Quality problems can be traced to a lot of materials being used from which purchase orders and which supplier. Full supply chain management from sale, purchase, production and post-delivery service can be realized. Quality management can be accomplished by 100% traceability. This is the benchmark of refined supply chain management in the chemical engineering industry.
• 100%: Cost accounting has been improved from 80% to higher than 95%. Batch costing can be accomplished at 100% accuracy. The profit and cost can be attributable to every lot of products from the origin.

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