As one of Thailand’s biggest tractor and agricultural machinery manufacturers, SIAM KUBOTA has set a course to continually enhancing the quality of its production line and its products, refining its production management strategy, and logistics in order to elevate efficiency throughout the supply chain.
Under the brands of “Kubota” and “Tra Chang”, Siam Kubota Corporation Co., Ltd. has been focusing on developing its agricultural products to best of its ability and to serve the diverse needs of the industry. Its products range from tractors and implements, combine harvesters, transplanters, excavators, diesel engines, power tillers, and other spare parts. Production line and logistics management strategies have always been a high priority, and has shown to be a large factor to increasing competitiveness, cutting costs, and helping to exalt Thailand’s economic development. Mr. Veerasak Kullachaipanich, Production Planning and Logistics Manager at Siam Kubota Corporation Co., Ltd. recently sat down with us at LM to talk about the framework and direction of Siam Kubota’s production plan and logistics management strategy that aims to bring out the best of their potential, as well as the methods of selecting the company’s logistics providers.
A manufacturer’s production plan and logistics management strategy are essential elements that can affect the versatility and smoothness of the production process and product distribution. They are also amongst the top factors that can most influence cost management. Because of this, Siam Kubota pays close attention to efficiently planning its production and selecting a logistics provider that is the most suitable to the company’s operation. This is due to the fact that Siam Kubota firmly believes in producing and operating with a service provider who believes in punctuality, safety, and lean manufacturing. The company brings every step of the logistics process into consideration in order to further enhance efficiency and reducing unnecessary procedures, including acquiring parts from suppliers, delivery procedures, and product distribution.
Make It Lean
Although Siam Kubota has recently enlarged its production line, the functional areas in the factory still remain practically the same. This is because the company has an effective production plan and logistics management strategy. Mr. Kullachaipanich deems that if Siam Kubota increases its models and product lines, the functional areas, spare parts production management and inventory must still be able to be managed within the existing factory’s parameter even though the turnover of spare parts and other parts might significantly double. “With good logistics planning and management, we can appropriately manage inventory,” said Mr. Kullachaipanich. “Each batch of parts we receive has been accurately calculated and planned for in the production process. When production is completed, we cautiously examine the product and immediately initiate the distribution process. This is done to reduce wasted time, control inventory costs, and reduce unnecessary procedure, which can minimize both functional areas and operating costs and can also boost up the versatility of the manufacturing process.”
According to sales forecast, Siam Kubota has a disparate volume of production each month. The monthly demand for each product usually differs during each agricultural season. For example, during the preparation season, tractors and power tillers are the equipment most in demand; in the cropping season, the demand for power tillers and transplanters usually increases; while demand for combine harvesters normally peaks during the harvesting season. “In each agricultural season we increase production of the products with the most demand, resulting in higher demand of their spare parts. In turn, providers adjust in order to meet with the needs of the company, which all together allows our production line and distribution process to operate smoothly throughout the entire supply chain,” revealed Mr. Kullachaipanich.
Make It Flow
Because Siam Kubota is widely recognized as a manufacturer with high quality and credibility, the distribution of products to dealers must be delivered by a trustworthy logistics provider who can efficiently and punctually deliver the product while being able to maintain the quality of Siam Kubota’s goods. Kubota’s tractor drivers or drivers of other agricultural machinery who are involved in domestic or overseas delivery are obligated to participate in a training based on Siam Kubota’s standards. This training is compulsory for both drivers from logistics providers and from SIAM KUBOTA. It can help guarantee that the product will be safe without any marks or scratches happening in the delivery process. “Before we load the cargo into a container or onto a trailer, we thoroughly investigate the cargo to ensure that the product is without any dents or scratches. Logistics providers in turn must also contribute to the quality guarantee. This way, we can be certain that the cargo will reach the destination in the same condition as it was when it left the factory. The cargo must not have any scratches, dents, breakages, or other damages. Even though our products are sturdy tractors or agricultural machinery that will be used ruggedly, we do not accept any kind of defect happening to the cargo before it reaches the customer. Our delivery standard must be equal to that of automobile.”
Siam Kubota has set a key performance indicator (KPI) for logistics providers who service the company to evaluate and assess service quality. The KPI is subjected to the principle that there must be zero accidents. The providers have to manage and operate to reduce the possibility of an accident as much as possible. The company believes that even in an emergency where the cargo is damaged and compensated by the providers, the consequence of the accident can be more widespread. Compensation, therefore, is not what the company seeks from its providers. Mr. Kullachaipanich emphasized that “We expect both safety of the product and safety to society as a whole. Siam Kubota is determined to encourage providers who possess responsibility and are conscience towards society and the environment. We are a big organization, so supporting a provider who has high moral values and is responsible towards society is a matter we take seriously.”
In its great successes and its continuous development, we can see that not only do an efficient management plan and a competent policy strategy matter, but choosing a business partner who can operate professionally, creditably, and trustworthily can also yield dividends and a smoothly functioning company. It can also contribute to more efficiency in operating costs, social responsibility, as well as underpinning the company’s future operation and success.