On one of our final days in China, we visited SEW Eurodrive in Suzhou (a city 100km west of Shanghai). SEW Eurodrive is a manufacturer of motors, gearboxes and electrical components. At the Suzhou mainly gearboxes are assembled, around 300.000 each year. These gearboxes are connected to their motor and shipped to the customer. These customers are all located in the eastern part of China. In 2002, SEW Eurodrive started in Suzhou with a service and maintenance location.
The production of a product begins when the orders comes in from a customer, so there is a clear pull system. After the order comes in, the product goes into production. This takes around 4 days and consists of assembly, painting and quality control. After these 4 days and if the customer has paid, the product is received by the customer 2 weeks later.
The payment of the customer is actually one of the biggest problems they face at the moment. When the order is made, the customer needs to make an initial payment for the product. Then the product goes into production and the customer needs to make a final payment when the product is finished and ready for shipping. But this final payment is regularly not made by the customer. This leaves SEW Eurodrive with a huge supply of not delivered products. After some time when the payment is still not received, the products will be taken apart again and recycled.
SEW Eurodrive started 10 years ago with the implementation of LEAN. Originally there was no ordered material flow in the factory, with the implementation of Lean this layout was completely changed. Several improvements are:
- Tool boards
- Work stations closer to warehouse
- Tools for product series have the same color.
- Fixed places for equipment
Our visit consisted of an opening presentation, a tour around the factory and a reflection session. In this reflection we presented our observations from the factory tour and compared them with Rotterdam factory. The biggest difference between these two factory’s is the size of the stock. In Rotterdam there wasn’t hardly any stock and in Suzhou almost half the factory consisted of stock.