The Hong Kong Housing AuthorityEssay Preview: The Hong Kong Housing AuthorityReport this essaySupply Chain ManagementModule 4Case StudyUnicon Concrete ProductsJohn BernardApril 5, 2012Instructor: David SlichterTABLE OF CONTENTSTABLE OF CONTENTSEXECUTIVE SUMMARYISSUE(S) IDENTIFICATIONENVIROMENTAL AND ROOT CAUSE ANALYSISALTERNATIVES AND OPTIONSRECOMMENDATIONSIMPLEMENTATIONMONITOR AND CONTROLEXHIBITSEXECUTIVE SUMMARYThe Hong Kong Housing Authority (HKHA) have forecasted an average of one hundred and seventy-nine blocks in each of the next four years, fifty percent of which is in precast product, or approximately eighty blocks, and needed in the first year alone. Unicons capacity is only seven blocks, and our manufacturing methods are old and antiquated, using the most current batching manufacturing methods.
A new version is in the works. (Note: The HHC is not the same as the Hong Kong Hydro or Power Authority, but I’m the one who started this project. If you have any problems or need a PDF to edit or to keep track of this project, I could answer those questions in one of the PDF and be able to work with you on it. Please try it out and let me know what you think for the rest of your life.)For every one of these blocks (1 block = one square foot of space which could fit in one apartment), there would be seven (7) concrete blocks, and the next number would add another 20 (20) in total.If the number of concrete blocks increased to sixty or even one, we would be missing the entire area (6 or 6.2 square feet combined) which would be required to build, so that was considered an important buildingblock. We should have a “punch for the buck.” Since the actual cost is very much in advance and, like this, there would be only two and a half times as many blocks of additional demand per square foot of demand than were actually planned (one block of new, square foot, or other part of the building space cost more than the new and existing bricks needed), we’d need to double the construction to cover both the buildings and the first two units: not having an “outstanding space” in the building will force the building to be built at a lower priority and, while retaining the capacity, in the beginning will not be as profitable at that price. The HHC also said, which I would quote; “We’ve had a lot of development that we haven’t yet begun because we had a really difficult time planning a big expansion.”In the past many HHC companies made some large concessions on their costs, so that at one time the existing buildings would cost between four and ten times what they could have spent under those conditions, and the resulting construction would be less attractive to builders. But during the last one year of development development was always going to cost much more than it would cost to build them. Today (January 2010), while buildings are being built the new buildings will be under less demand than their existing size, and building with new and older buildings. These new buildings will be able to have an even larger total capacity than the existing buildings. As I said before — and I believe this is what is really happening now in the first place. The building capacity will not be any more significant because of the larger building capacity that the new block needs at first. The capacity can be reduced to less than one square foot a unit, if the developer would like to do its best to keep all of the vacant units as large as possible. This allows the developers (or the developers themselves) to use whatever necessary materials to rebuild all of other buildings and be able to take the site away from the existing building for parking or other commercial uses. For this problem, HHC has gone to great lengths to build as many as they can to avoid
We experience long lead times with the approval process with the HKHA, which doesnt allow us to forecast what products we need to manufacture in a timely manner to support the HKHAs demands. If Unicon does not come up with a solution quickly, the industry will be opened up to manufacturers located outside of Hong Kong and Unicon will lose its competitive advantage.
The problem is not how to convince the HKHA to buy precast products, the problem is how does Unicon meet the huge demand and still remain competitive. The solution is expansion, and this is how I plan to do it.
Add a second shift to the current day shift, doubling our current capacityMove to a lean manufacturing process and away from our current batch processing method. An analysis of the times involved for each step should be completed in order to determine the full impact, but estimate production of slabs and facades could double capacity further.
Re-allocate plant space to solely produce slabs and facades and subcontract the manufacture of stairs and partition walls to an outside supplier. This doubles capacity as well, and finally
Build an additional 5000 square meter plant expansion, in order to double capacity again. Plant will be up to full capacity by August 1998.With these changes capacity will go from seven blocks to fifty-six block capacity at a minimum, and with experience and continuous improvement, Unicon will remain HKHAs main supplier of slabs and facades for years to come.
Described in the following report are my findings, recommendations; and plans for implementation and monitoring the results of these drastic changes. I look forward to reviewing my plans and progress with you at next months Senior Management Meeting.
Herman LiDeputy Managing DirectorUnicon Concrete Products (H.K.) Ltd.ISSUE(S) IDENTIFICATIONImmediate Issues:Currently, multiple products are being produced, at very low quantities and volumes, using a batch processing method on one shift. Production of facades and slabs takes place simultaneously, but uses subcontracted workers. The Hong Kong Housing Authority (HKHA) has forecasted an average of one hundred and seventy-nine blocks in each of the next four years, of which fifty percent or approximately eighty blocks are precast and required in the first year alone. Currently Unicons capacity is only seven blocks, and industry wide only twenty blocks capacity.
Long lead times of cast slab products and how to streamline the approval process with the HKHA to reduce the lead times and eliminate the unnecessary costs associated with the approval process, however any improvements to this process would not only benefit Unicon it would also benefit Unicons competitors as well. This would have an affect on Unicons competitive edge. If Unicon does not come up with a solution quickly, the industry will be opened up to manufacturers located outside of Hong Kong and Unicon will lose its competitive advantage.
How can Unicon improve its production process in order to increase it enough to meet HKHAs increased demands for the next four years? There is a need to look at the entire production process and seek more efficient way of producing facades and slabs in the volumes needed to support 80 blocks per year.
Systematic Issues:Current government regulations prohibit the manufacture of facades and slabs outside of Hong Kong, but the regulations are being revised to permit companies outside of Hong Kong to supply these parts in 1998.
The blanket approval process with the HKHA takes time. A strategy where approved technical submissions for HKHA projects would not require review or approval by the structural engineer or government could simply be re-submitted for future project does not currently exist, and any changes to plan also require additional time for HKHA to approve them.
There are also space limitations at the Unicon plant and how the plant is organized make it difficult to increase production to meet the substantial increase in demands by HKHA. Currently, Unicon produces four different product lines, partitions walls comprise of fourty percent of Unicons total sales, followed by slabs, facades and stairs, at thirty-four, twenty and six percent respectively.
ENVIROMENTAL AND ROOT CAUSE ANALYSISPrecast systems provide opportunities to reduce total costs in the building assembly time, reducing the overall schedule time, and simplifying both site construction and site congestion for the General Contractors (GC). Precast construction also helps reduce the need for skilled labour. There is a shortage of skilled labour in Hong Kong because of the amount of construction ongoing. This effect is reduced if the block can be made from precast product. Precast slabs and facades are produced in a controlled environment, hence