Tony Shao of Mentor Graphics joins SMT Magazine China Editor Edy Yu at NEPCON 2012. They discuss cutting waste with Mentor Graphics’ Lean Materials Management system. Shao explains how this process can reduce waste by as much as 95%.

EDY YU: I’m reporting from NEPCON 2012 here in Shanghai. With me is Tony Shao, MES engineering team leader for Mentor Graphics. Nice to see you, Tony.

TONY SHAO: Thanks for inviting me, Edy,

EDY: Please tell me something about your Lean Materials Management?

TONY: As many people know, Mentor Graphics has focused on SMT and assembly software for years. During the last few years, we heard that some of our customers were having problems at their warehouses, and sometime these problems were very serious. I’m talking about problems such as material waste, or material that can’t be delivered on time. For these kinds of problems, they really need a solution. So starting in 2008, Mentor Graphics started to build some solutions for our big customers--solutions that suit their process. Nowadays, we have customers, not only in China, but all over the world, who use this system.

EDY: Could you tell me some details about how this system helps to cut waste?

TONY: When we talk about the materials management system, people will think about the MRP system first. This is a normally used Material Requirements Planning system. One weak point in this system is that, even though it can produce some general data statistics, the statistics won’t be very accurate. When people find quality problems, this MRP system can’t do anything to control them. That’s why we bring our system in; we can do very accurate material statistics that can avoid quality issues and accidents. So we remedy the inherent defects in MRP.

Let’s look at how the traditional MRP system works. When the production line needs materials, the MRP system will generate statements to push the materials to the production line. This will cost a lot of labor, while producing very little value. Our materials management system is a JIT solution, which means just in time, real-time delivery. This will reduce the WIP materials, and improve the efficiency of warehouse management. When we talk about Lean processes, how can we achieve that? One way is to eliminate waste. We will reduce the movement of materials; sometimes when we move materials from that side to this side, it will cost a lot of waste and money. Our real-time delivery can reduce this waste by 95%.

EDY: Do you really mean that 95% of waste can be eliminated?

TONY: Yes, correct. I think everyone will be curious about how this real-time delivery actually works. First, we have a very good tool to do the pre-process planning, so we can generate some work orders according to our production plan, and link these work orders to our system. The system will automatically calculate and optimize the use of materials. So when we prepare the materials, we will consider arranging similar products together, which will reduce the changes for the production lines and products to keep our manufacturing at the highest efficiency.

Further, our system is linked with the equipment, so we can get real-time access to the data. This data includes statements, traceability, and process consistency. This information is already in our database; the system provides access to this data, which will bring more value than doing these things separately. This is a small investment, but it brings customers a lot of benefits. We get feedback from customers who said it only took them a couple of weeks to gain their investment back.

EDY: Thank you very much.

TONY: Thank you.