Analyzing the kaizen event application in direct material management at intel products vietnam co , ltd

28 CHAPTER 3: ANALYSIS OF THE KAIZEN EVENT APPLICATION IN THE DIRECT MATERIAL MANAGEMENT AT INTEL PRODUCTS VIETNAM.. 32 3.2 Analysis of Kaizen Event application in Direct Material Manage

LIST OF ACRONYMS

LIST OF TABLES

Table 2.1: Seven Quality Tools 19

Table 3.1: Ideal state 38

Table 3.2: Waste Identification 38

Table 4.1: Roles and responsibility 48

Table 4.2: Problem statement 51

Table 4.3: Define role and responsibility 59

Table 4.3: Total lots counted on system 60

Table 4.5: The changes in the consume of units before and after using new process 61

LIST OF FIGURES

Figure 1.1: Intel logo 4

Figure 1.2: Intel Products Vietnam 9

Figure 1.3: Intel Products Vietnam Organization 11

Figure 1.4: CPU Haswell Core i5 was assembled and tested in Vietnam 11

Figure 1.5: Material Overview 12

Figure 1.6: The Process of Substrate 12

Figure 1.7: Some components of a chip 13

Figure 1.8: Example of the indirect material 14

Figure 2.1: Deming’s wheel PDCA 18

Figure 3.1: The RIL event flow 34

Figure 3.2: High level flow of EPX 36

Figure 3.3: Epoxy fishbone analysis 37

Figure 3.4: Current State Map 39

Figure 3.5: Future State map 42

Figure 3.6: the differences between before & after applying new process 43

Figure 3.7: the diagram of differences between before & after applying new standard 44

Figure 3.8: Freerzer EPXS phase 2-10k before and after RIL 44

Figure 3.9: Ordering Process 44

Figure 3.10: Team member in EPX Saving RIL 46

Figure 4.1: FIFO Kanban 47

Figure 4.2: Ordering material process 48

Figure 4.3: Substrate problem 51

Figure 4.4: A hole in MBB of substrate bundle 52

Figure 4.5: small lot and expired day 53

Figure 4.6: Lot issue 53

Figure 4.7: Fishbone Chart 54

Figure 4.8: New substrate control process 57

Figure 4.9: waste in DMR 58

Figure 4.10: Lot check 60 Figure 4.11: The comparison between the difference before and after using new

TABLE OF CONTENTS

THE INSTRUCTOR’S COMMENTS i

THE REVIEWER’S COMMENTS ii

THANKFUL LETTER iii

LIST OF ACRONYMS iv

LIST OF TABLES v

LIST OF FIGURES vi

TABLE OF CONTENTS vii

INTRODUCTION 1

1 Reason for subject selection 1

2 Objectives of the research 2

3 Subject and scope of research 2

4 Research Methodology 3

5 The structure of the research 3

CHAPTER 1: INTRODUCTION OF INTEL PRODUCTS VIETNAM CO., LTD 4

1.1 General introduction about Intel Corporation 4

1.2 General introduction about Intel Products Vietnam 8

1.2.1 Preliminary information 8

1.2.2 History and development 9

1.2.3 Vision and Mission 10

1.2.4 Scope of activities 10

1.2.5 Organizational Structure 11

1.2.6 Main product 11

1.3 Direct Material Room Overview 12

CHAPTER 2: THEORETICAL BASIC 15

2.1 Quality Concept 15

2.1.1 Quality Definition 15

2.1.2 Quality Management 16

2.1.3 Quality Improvement 16

2.1.4 Quality Tool 19

2.2 The 5S Kaizen 21

2.3 The Kaizen concept 22

2.4 The Kaizen Event 23

2.4.1 The Kaizen Event definition 23

2.4.2 Purpose of the Kaizen Event 24

2.4.3 Four phases of the Kaizen Event 25

2.5 Kanban System 28

2.6 Material Management 28

CHAPTER 3: ANALYSIS OF THE KAIZEN EVENT APPLICATION IN THE DIRECT MATERIAL MANAGEMENT AT INTEL PRODUCTS VIETNAM 29

3.1 The real state of Kaizen application at Intel Products Vietnam 29

3.1.1 Four phases of a Kaizen event at Intel 29

3.1.2 Basic Kaizen Event flow at Intel: 30

3.1.3 Encouraging the employee to do Kaizen Event together 32

3.2 Analysis of Kaizen Event application in Direct Material Management at Intel Products Vietnam 33

3.2.1 Apply Kaizen Event model through the RIL event in VNAT 33

3.2.2 VNAT RIL for Phase 2 10K CNLUSFF syringes material saving 34

3.3 The Limitations in the Kaizen Event implementation process 46

CHAPTER 4: PROPOSING THE APPLICATION OF KAIZEN EVENT IN SUBSTRATE PROCESS CONTROL FOR DIRECT MATERIAL MANAGEMENT AT INTEL PRODUCTS VIETNAM 47

4.1 Substrate Control Process Improvement 47

4.1.1 Material ordering and receiving process in VNAT 47

4.1.2 Problem Statement 50

4.1.3 Find Out Solution 54

4.1.4 Estimated Flow of Implementing Kaizen for substrate control process 57

4.1.5 Estimating the effectiveness of the countermeasures 61

4.2 Some solutions to decrease limitations of the Kaizen Event at VNAT 63

CONCLUSION 63

LIST OF REFERENCES 65

APPENDIX 67

INTRODUCTION

1 Reason for subject selection

Nowadays, thanks to the rapid development of technology, the world increases profound changes in all fields from business, production to management, from trade to agriculture

at rapid speed and makes us feel amazed Started in 1970 when electronics were the first introduced, opened the door to a transformation of business processes and production systems, until 1990 when the official Internet appearance, the degree of spreading and creating a strong influence on the industrial revolution 4.0 Technologies such as cloud computing, IoT-Internet of things, AI-Artificial Intelligence, AR/VR- Virtual Reality/Augmented Reality, Big Data, Wi-Fi, Block chain, Nanotechnology, meet the expectations of users by interdisciplinary and bringing people a better life The explosion of technology cannot help to mention the great contribution of the smart chip Realizing the potential of data as well as technology is fertile ground for huge profits, the races in smart chip production are increasingly fierce among the tech tycoons This shows that the technology market is fiercely competitive, in addition to some factors such as people, products, prices, , quality is also an important factor associated with existence, development, and the success of an organization According to Barbara B Flynn (1994), quality management is first viewed as an element of the integrated approach known as World Class Manufacturing; quality management supports and is supported by JIT, human resources management, top management support, technology management and strategic management and include Material Management

With the ambition to be more successful, the name and the product of an enterprise must meet the criteria that customers expect, which is called quality If we want to have quality products in the output, we must ensure the quality materials in the input, controlling the quality of the input materials, improvements should be executed to improve the efficiency index of productivity, time, and machinery to eliminate the waste generated from the early stages of production to optimize resources

As mentioned above, the famous and powerful businesses such as Intel, Qualcomm, and Nvidia, Amazon, Google are interested in data mining through the invention of super-smart chips to gradually dominate the market share, take the competitive advantage of

the leader, they try to get ahead in the race to create top-of-the-line artificial intelligence technology, these chips starting to become more important than ever The chips go through many stages, from the preparation of materials to assembly to the packaging of finished products, each stage has its quality assurance and control processes to ensure that after the chip is produced, they can work well and release on time to give the company a competitive advantage It requires Intel Products Vietnam Co., Ltd to control input materials strictly so that the manufacturing process is operating behind smoother In addition, in the process of managing raw materials on the floor, Intel has also applied the Kaizen event and tools to support the Lean implementation, bringing efficiency to the management of materials at the company Recognizing the importance

of quality and the outstanding benefits of implementing Kaizen event for the management of raw materials for product manufacturing, as an intern at Intel Products Vietnam Co., Ltd., along with the experience and knowledge learned at Ho Chi Minh

City University of Technology and Education, I chose the topic "Analyzing The Kaizen Event Application in Direct Material Management at Intel Products Vietnam Co., Ltd " to deploy the graduation thesis

2 Objectives of the research

- Researching in the current status of Material management at Intel Products Vietnam Co., Ltd

- Researching and analyzing the Kaizen Event application in the direct material management process

- Proposing a solution to improve the application of Kaizen Event in the direct material management process for substrate

3 Subject and scope of research

- Research subject: The Kaizen event implementation to improve direct material management process

- Scope of research:

 About time: Research on Kaizen event direct material management process from March 2020 to October 2020

 About space: Researching within the workshop of Intel Products Vietnam Co., Ltd

- Collecting primary data: during the internship, I can observe the management process and directly implement some elements of the management process, thereby collecting useful data or backlog that needs to be dealt with In addition, there are some forms of collection such as consulting with buddies, interviewing CW and related departments for more data

5 The structure of the research

- Chapter 1: The Introduction of Intel Products Vietnam Co., Ltd

- Chapter 2: Theoretical Basic

- Chapter 3: Analysis of The Kaizen Event Application in The Direct Material Management at Intel Products Vietnam

- Chapter 4: Proposing The Application of Kaizen Event in Substrate Process Control for Direct Material Management at Intel Products Vietnam

CHAPTER 1: INTRODUCTION OF INTEL PRODUCTS

VIETNAM CO., LTD

1.1 General introduction about Intel Corporation

Intel Corporation was established on July 18, 1968 by Robert Noyce and Gordon Moore who pioneered the design of semiconductor Intel Corporation is an American multinational corporation and technology company and has the main office in Santa Clara, California, in Silicon Valley Intel is a combination of the words "Integrated" and

on a microchip doubles every two years, though the cost of computers is halved." Intel focuses on exploiting primary and unprocessed data, and data has great potential for developing breakthrough technologies Data has emerged as a transformational force

in an era where an explosion of devices permeate all our interactions, but data only has value when it can be turned into actionable insights In addition, the increase in value of data is inseparably linked to three tech inflections happening today – AI, 5G’s transformation of the network, the growth of the intelligent edge Organizations who can elevate these inflection points and push up actionable insights will lead the ways people can shape the world

 Products: Intel is well-known for advanced, high-performance processors for

every usage, including enterprise-scale servers, IoT devices, laptops, desktops, workstations, and mobile devices

 Processor Families: Intel® CoreTM Processors, Intel® Xeon® Processors, Intel Atom® Processors, Intel® Pentium® Processors, Intel® Celeron® Processors, … They use for managing 3D, deliver cloud computing, get insights from data analytics, push up data center effectively Additionally, many kinds of processors are used to operate mobile devices and energy-efficient servers, laptops, …

 Cloud: Intel® Xeon® Platinum Processors Family, Intel® Xeon® Gold Processors Family, Intel® Xeon® Silver Processors Family, … Lay the foundation for robust Software Defined Infrastructure (SDI) solutions across the broadest range of platforms—including software-defined compute, storage, or networking

 AI, IoT, and Machine Learning: Intel® Xeon® Platinum Processors Family, FPGA Devices, Intel® MovidiusTM Vision Processing Unit (VPU) Use existing data to get new insights, explore customer behavior patterns, and find market opportunities - all based on your existing scaling framework

 Gaming: Intel® CoreTM X-series Processor Family, Intel® CoreTM i7 Processors, Intel® CoreTM i5 Processors It's a great choice for intense gaming Play the most demanding games - while streaming or recording

 Intel’s purpose: “We create world-changing technology that enriches the lives

of every person on earth.”

With clear and ambitious goals, Intel is inspired to create more and more practical values for people, innovating technology to meet all the needs of people in modern life, to create into a world of safer, smarter, more wonderful places to live, builds healthy and energetic, exciting, full of enthusiasm communities, and increased productivity

Their ambitions and opportunity have never been greater They are at the edge of several technology inflections—AI, 5G network transformation, and the rise of the intelligent brink—that, together, will make the future of technology Silicon and software are at the core of creating global impact, and Intel is at the center of

it all

 Intel’s vision: “to be the trusted performance leader that unleashes the potential

of data.”

 Intel’s mission: “We engineer solutions for our customers’ greatest challenges

with reliable, cloud to edge computing, inspired by Moore’s Law.”

Data is dramatically shaping the future of all humankind Intel is working constantly to unleash the potential of data, leading to more active and efficient networks, and pervasive AI across smart devices Moore’s Law set the pace for the digital revolution and continues to inspire us today

 Inclusion and quality

Those values guide how employee make decisions, treat each other and serve customers

to achieve their goals Intel employee are united by our purpose, driven by values to achieve our ambitions and help our customers succeed

 Intel recognition: recognized by

 Fast Company Most Innovative

 Forbes Most Valuable Brands

 Fortune Most Admired Companies

 Fortune Change the World List

 3BL 100 Best Corporate Citizens

 Ethisphere World’s Most Ethical Companies

 JUST Capitals Just 100

 HRC Corporate Equality Index

 Bloomberg Gender Equality Index

 Working Mother’s 100 Best Companies to Work For

 Intel by numbers:

 Business

o Intel will reach total revenue of 72 billion USD in 2019

o The intellectual workforce has more than 110,000 employees across 46 countries

o Capital investment in R&D reached 13.4 billion dollars

 Manufacturing

o For every second that passes, 10 billion transistors are produced across Intel's factories Up to 100 million transistors are loaded on every mm2 of the chip

o Up to the present time, there are 16.2 billion dollars in investment,

to develop and expand factories, equipment, people, and technology

 Supply Chain

o Intel values gender equality and gender balance in the workplace,

so the company has spent $ 279 million on women-owned businesses

o In order to ensure the quality of products from the very beginning, more than 800 supplier audits are done every 5 years

o According to the Responsible Sourcing Network Intel ranked first

on the Responsible Mineral Ranking, for past six years

 Community

o Prior to the 19 COVID pandemic, Intel contributed $ 60 million to the COVID-19 response

o Intel has contributed to community building and cultural development and environmental protection through more than 17 thousand hours of volunteer service since 1995 up to now

o Intel has over 30 years of positive impact through the Intel Foundation

 Sustainability

o Intel cares about environmental issues to create sustainable development, so the company has made efforts to recycle all kinds

of waste with 93% of all non-hazardous waste recycled

o 44 billion gallons of water conserved over the past decade

o 71 percent of Intel global power was green power

1.2 General introduction about Intel Products Vietnam

1.2.1 Preliminary information

According to Explore Intel website, Vietnam facility is the seventh site in Intel's global network of assembly and test sites Intel now has over 600 facilities in 63 countries and over 106 thousand employees worldwide Intel Products Vietnam locates in Lot I2, Street D1, Saigon Hi-Tech Park, District 9, Ho Chi Minh City The investment up to

$1B has been seen as the greatest US high-tech investment in Vietnam Officially operating in May 2007, Intel Products Vietnam is increasingly more complex technologies to adapt to the continuous development of the world, IPV is very proud of:

- The First multinational investment in Vietnam

- The First mega factory in ATM

- The First Modem factory in ATM

- Delivering > 60% of ATM volume

There are mainly two types of manufacturing processes in semiconductor manufacturing: wafer fabrication (front end) and assembly and test (back end)

Assembly and Test Manufacturing (ATM) is highly impacted by market demand fluctuation because the finished goods of ATM are shipped directly to customers Now, ATM producing Intel’s latest technology chip products including 5G, AI,

Desktop, Data Centre, Cloud-computing … currently, they shipped out 2 billion units and supporting Intel’s World-Wide Market

Intel Vietnam’s purpose: “Innovate our way to be the Manufacturer of Choice for the

Industry.”

1.2.2 History and development

- In February 1997, Intel established its first representative office in Ho Chi Minh City, following in footsteps, in May 1997, a representative office in Hanoi was also built

- With initial investment of $315M, Intel Vietnam constructs the first 100k Assembly Test facilities which were announced in February 2006

Thanks to commitments on environmental protection and contribution to regional economic and technological development (The accumulated export value is over $36B (2010-2019) which is over 60% of SHTP annual export values in 2019), Intel Vietnam always has good government cooperation so Intel Vietnam takes advantage of many preferential policies for the company to develop sustainably

Figure 1.2: Intel Products Vietnam

Source: Internet

- Key milestone:

 2006–2009: From a large green field, Intel Vietnam started to transform

 2010: Organizing Happy Grand opening, and the first product Ibex Peak also was produced

 2012: First 100Mu was shipped out

 2014: Expanded Prod Portfolio SOC + CPU DT

 2015: First Product from OSAT

 2017: 10K & 100K Cleanroom expansion

 2018: Become FCCSP Lead Site

 2019: 1.5B Units Shipped

1.2.3 Vision and Mission

 Vision: Along with the common vision of Intel Corporation, Intel Vietnam also

has a great vision "Create the future of Intel and Vietnam"

Intel’s long-standing commitment to corporate responsibility and sustainability—built

on a strong foundation of transparency, governance, and ethics—is deeply integrated throughout all aspects of their business Their integrated approach has created significant value for Intel and their stakeholders by helping them mitigate risks, reduce costs, build brand value, and identify new market opportunities to apply technology to help address society’s most complex issues

 Mission: Innovate our way to be the manufacturer of choice for the industry

They are committed to continual product innovation by delivering speed, accuracy, and quality to our manufacturing process Together, we can reimagine how people and data can change our world for the better

1.2.4 Scope of activities

 Strategic Objectives:

1 Be the best in the industry

2 Be a world class workforce at peak performance

1.2.5 Organizational Structure

Intel Vietnam Organization

Figure 1.3: Intel Products Vietnam Organization

Source: Human resource department

1.2.6 Main product

According to Brian Krzanich, Intel's vice president in charge of assembling and inspecting products, most of Intel's products in the world will be assembled, tested and packaged in Vietnam Therefore, Intel Products Vietnam will be a model for the development of future generations of ATM factories and will help increase Intel's competitiveness in the market

Figure 1.4: CPU Haswell Core i5 was assembled and tested in Vietnam

Source: Internet

1.3 Direct Material Room Overview

Figure 1.5: Material Overview

Source: DMR specification

 What is Direct Material Room?

Direct material room is a substrate storage room, other direct materials such as flux, epoxy, ball, are managed by OS / Sups but instead of storing at DMR they are sent and used directly in the workshop

 DM items:

- Substrate is direct material which is assembled to attach in unit

- Substrate is displayed on system at 589 which is first operation for all products

- Flux, Epoxy, Ball, Capacitor is additionally attached in some different process to make finish product

- Traceable items: Material has lot created on WS (substrate, LID, interposer, etc.)

- Non-traceable items: Material does not have lot created on WS

Figure 1.6: The Process of Substrate

Mini store/Tool shop PM trolley (spare parts)

Spare part

Hand tools

Log book/Lable

Substrate is managed by SAP system and stored at DMR, they are controlled by WS which means wherever they come into the factory to produce product, that information will be observed by WS follow to the flow of assembly product

Figure 1.7: Some components of a chip

 System for management

process of transferring or storing products At Intel, there are many IDM in the production floor such as:

CHAPTER 2: THEORETICAL BASIC 2.1 Quality Concept

Obviously, quality can be defined in many ways, depending on who and which firms are defining and the goods or services it refers to Therefore, I will research the overview about a perspective on what quality make sense to customers and companies

 Quality from customer point of view

W Edwards Deming (1900-1993), author and consultant on quality, says that “The consumer is the most important part of the production line Quality should be aimed at the needs of the consumer, present and future.” Customers have different expectations for the product that they need and are willing to pay for The definition of quality here

is fitness for use

 Quality from producer's perspective

From this approach, the producers come out the design of specification that customers want and can afford, as referring to Operation Management book "Once the product design has been determined, the producer perceives quality to be how effectively the production process is able to conform to the specifications required by the design referred to as the quality of conformance." To attain it, the critical factors are the design, materials and equipment, training, supervision, and control

We reach the views of quality from two perspectives, manufacturers and customers, we can sum up that the meaning of quality is combined by the cooperation and participation

of desirable ideas through product design and production processes In the Operation Management book, it depicts "the final determination of quality is fitness for use, which

is the customer’s view of quality It is the consumer who makes the final judgment regarding quality, and so it is the customer’s view that must dominate"

2.1.2 Quality Management

Good quality management is critical for improving manufacturing competency and competitiveness Almost modern companies now have valued the necessity to alter their thinking in terms of quality and how that can foster their business performance Total quality management (TQM) has played an important role in business development and get considerable attention from managers in building up a strategy to achieve the quality throughout the entire organization that can meet the designed product

A handful of prominent individuals in the quality management field are W Edwards Deming (profession in statistical quality control field), Walter Shewhart (developed control charts, statistic control, the term quality assurance), Kaoru Ishikawa (Tokyo University professor promoted the use of quality circles and developed the “fishbone” (cause and effect diagram) and others quality Gurus such as Joseph M Juran, Armand

V Feigenbaum, Philip Crosby All of them have contributed and dedicated themselves

to the development of the quality area by eliminating common causes of quality problems, emphasizing the use of statistical quality control techniques to reduce variability in the production process

be got peer review valued

W E Deming defined primary responsibility when increasing the efficiency of the work done and reducing product defects, he said, was employer’s and management’s The employee was promoted extensively involved in a quality improvement program and was provided a training section for workers in quality-control techniques and methods Deming is also known for development of the Deming Wheel, or Plan-Do-Check-Act (PDCA) cycle Deming’s overall philosophy for achieving improvement is embodied in his 14 points (Total Quality Management)

1 Create constancy of purpose

2 Adopt the new philosophy

3 Cease inspection, require evidence

4 Improve the quality of incoming supplies

5 Continuously improve production

6 Train and educate all employees

7 Supervisors must help peoples

8 Drive out fear

9 Eliminate boundaries

10 Eliminate the use of slogan

11 Eliminate numerical standards

12 Let people be proud of their work

13 Encourage self-improvement

14 Commit to ever improving quality

Deming’s 14 points and PDCA cycle shows the way of his approach and it created the foundation for today’s quality management systems conducted by many successful companies

Figure 2.1: Deming’s wheel PDCA

Source: Operation Management book

 Plan

1 Clarify the problem: the problems should be pointed out, and identify where the problem/situation lies, any abnormalities must be recorded and documented

2 Break down the problem: if the problem is serious and complex, the owner will conduct a small partition to know the impact of that issue, scope, priority order and resolution

3 Set the target we will achieve: Every job needs a goal, clearly defining goals from the beginning enable to perform Kaizen more smoothly, more effectively and there is a basis for comparison before not improving

4 Analyzing the root cause: It is necessary to go to where problems occur and observe how they work for collecting evidence and data to report, 5W analysis

is used to find the root cause, for proceeding key improvement

5 Develop countermeasures: After analyzing and study the current process and collecting data, should develop a plan for improvement then decided how to measure it

 Do

Implement the plan and measure it performance when it executes the process, be advised

to implement it on the small scale in order to control it closely The important task in

Do is to accumulate the data for further use

 Check

Monitor and measure process and product against the policies, objectives and requirements for the product Access the measurements and report the result out for decision-makers Evaluate the data collected during the direct observation phase Analyze to see if expected improvement occurred

 Act

Design on changes needed to improve the Process act to continually improve Process Performance If the new process makes the changes permanent or not or needs to improve in some ways The consolidation phase makes the organization possible to summarize what has been taking place and to be certain that changes made to processes assist recognition of the achievement of some form of quality standard

2.1.4 Quality Tool

The seven word-famous tools for bagging quality problems and their causes are sometimes called the “magnificent seven” These well-known tools became the foundation for the quality management programs developed by many companies The picture below illustrates the summary of 7 tools briefly

Table 2.1: Seven Quality Tools

Source: Operation Management book

Process Flowchart

A diagram of the steps in a process; helps focus on where in a process a quality problem might exist

Pareto Analysis

A diagram for tallying the percentage

of defects resulting from different causes to identify major quality problems

data related to a quality problem

between two variables in a process; identifies a pattern that may cause a quality problem

Statistical Process Control Chart A chart with statistical upper and

lower limits; if the process stays between these limits over time, it is in control and a problem does not exist

2.2 The 5S Kaizen

5S is a productivity methodology which origins from Japanese people 5S is the five first letters S in those following word: Seiri, Seiton, Seiso, Seiketsu, Shitsuke which means in English: Sort, Shine, Set in Order, Standardize and Sustain

The 5S method is a foundation in the beginning each program of improvement This tool can help the analysis of processes running on the work station, it creates and sustains well organized, clean, high effective and high quality workplace that can be clearly seen

in the more productive organization of the workplace, reduction of waste, safer environment, elimination failures and breaks, facilitate of the quality and safety of work better

1 Seiri (Sorting): In this step, every unnecessary thing needs to be disposed and just keep essential items to avoid unneeded items take up all the working space Everything else is stored or erased This leads to fewer hazards and less clutter to interfere with productive work

2 Seiton (Set in order): Pay attention to the need for the workplace in order Tools, equipment, and materials must be systematically arranged to ease for assessment There must be a place for everything, and everything must be in its place

3 Seiso (Shine): Dirty source need to be cleaning, removing of wastes, keeping tools and equipment clean etc, make the workplace as clear as possible Shining need to be maintain as a daily activity to create an effectiveness work area

4 Seiketsu (Standardize): Work practices must be standardized which allows for control and consistency Basic housekeeping standards apply everywhere

in the firm All employees aware their responsibilities Housekeeping duties are part of regular work routines

5 Shitsuke (Sustain): After the above 4S is formed, all 5S jobs must be maintained to ensure a clean workplace, quick work done, quality output, this requires personal discipline and the awareness

5S is usually the first step towards eliminating Muda (waste) from manufacturing processes and result in eventually excellence quality output 5S is a foundation of kaizen, which is the practice of continuous improvement based on certain guiding principles, which include:

- Good processes bring good results

- See for yourself to grasp the current situation

- Speak with data, manage with facts

- Take action to contain and correct root causes of problems

- Work a team

- Kaizen is everybody’s business

- Big results come from many small changes accumulated over time

2.3 The Kaizen concept

In the mid-1980s, a famous Guru in the quality field, Masaaki Imai coined the term Kaizen and from it to until now Kaizen has been regarded as a key element in the competitiveness of Japanese company Kaizen not only affect the mindset of people but also influences the way people perform their work, searches for ideas that turn the workplace more productive and safer floor, creates a new procedure that makes the products manufactured effectively

As a matter of fact, in the original definition of Imai (1986) of Kaizen, the author who issued the term and fostered the concept said: “[ ] the Kaizen business strategy involves everyone in an organization working together to make improvements without large capital investments.”

Kaizen is combined by two Japanese words, "Kai" means for "change" and "zen" means for "better", the full meaning is "change for better", the well-known meaning from

happens in all areas of not only within workplace but also in all aspects of life The key aspect of Kaizen is that it is an on-going, never-ending, constant improvement process Kaizen is originally used as a key fraction of the Toyota Production System that means

“making things the way they should be” according to the basic, practical principles of profitable industrial engineering It means creating an environment of continuous improvement by changing your way of thinking, your method to make status better The core kaizen system implements based on incremental innovation, where employee’s involvement is encouraged to adjust the necessary things in their work area on an ongoing basis The cumulative effect of all these small changes over time can be quite considerable, especially if having the commitment of leaders to this philosophy Improvements are usually achieved at a low or no expense without complicated techniques or expensive material

The motivation that empowers the staff implementing Kaizen is the dissatisfaction with the current status quo, waste of every type and want to set the standard then continually improve those standards whether it performs well or not Standing still will make the company passive to struggle with the competitor Doing Kaizen changes employee's mindset, they will become more creative instead of just following the old processes and not only instructs people but also inspires them to go further The application of Kaizen has been covered almost part of an organization:

- Human resources

- Sales and marketing

- Purchasing and material management

- Product design engineering

- Accounts receivable

- Manufacturing…

2.4 The Kaizen Event

2.4.1 The Kaizen Event definition

According to Montabon, kaizen event is: “Kaizen events are essentially well structured, multi-day problem solving sessions involving a cross-functional team, who is empowered to use experimentation as they see fit to derive a solution”

From Vanetal’s perspective, Kaizen event: “A kaizen event is a focused and structured improvement project, using a dedicated cross-functional team to improve a targeted work area, with specific goals, in an accelerated timeframe”

Kaizen event is known with the term " rapid improvement events" which means an event lasting three- to five-day accelerated process, with an aim of making integrated changes

in a specific high priority area that needs improvement

A Kaizen Event is a structured process analysis and improvement activity that leverages Lean and Six sigma tools and condenses in a multi-day workshop what would otherwise

be a series of work sessions conducted over the course of several weeks

It is hard to distinguish the Kaizen event from Kaizen clearly, through Kaizen focus on making an accumulated small change to create a big impact, the Kaizen event strives to improve the process within a short time implementation and fostering incremental productivity in maximum condition In any way, “both approaches aim to eliminate waste, improve productivity, and sustain the resulting changes through the use of standards”

Kaizen emphasizes a way of thinking or behaving that person tend to perform so base

on this point to stimulate their creativity and unleash their power to find an effective and efficient process to conduct their work Thus, Kaizen events can be used as a supportive factor for the implementation of kaizen within an organization

The Event increases employee engagement because the employees are invited to an intense focus of the business activity that they work on each day

2.4.2 Purpose of the Kaizen Event

Kaizen event helps businesses reduce waste of 7 types of waste, improve processes, create additional value to customer, create new processes for the job to be done smoothly, increase productivity and product quality According to Karen Martin, Mike Osterling (2007) The final outputs of a Kaizen Event are implemented improvements and constructed action plans with a minimal remaining set of actions to improve an existing process

2.4.3 Four phases of the Kaizen Event

Four Kaizen Event Characteristics that may impact Kaizen event outcome sustainability which were identified and measured: goal clarity, goal difficulty, team functional heterogeneity, and management support as defined and operationalized in the first phase

of the larger Kaizen event research initiative (e.g., Farris et al., 2009)

Typically, a Kaizen Event starts when a problem appeared, or with a process, product,

or area that may need improvement already recognized Areas targeted by Kaizen Events might be:

- Products or processes with substantial work-in-progress

- Areas where there is a significant bottleneck or delay

- Areas where “everything is a mess.”

- Products or services for which quality or performance does not meet customer expectations

- Tools or techniques need to improve

Four phases of Kaizen Event

The Ortiz, C A (2009) point of view, the Kaizen Event is a two to five days focused improvement activity during which a sequestered, cross-functional team designs and fully implements improvement to a defined process or work area

 Planning

The first step of the framework is to plan the kaizen event The planning phase ensures that the mission is set both strategically and project scheduling vise It is important to lay out a clear goal, focus on what we expect, create a scope that is specific and attainable and develop Kaizen event timeline, what we need to do to reach the destination The planning phase particularly consists of three main areas that need to indicate before holding the kaizen event These three areas include:

1 Identify candidates

2 Select candidates

3 Define selected candidates

- The Kaizen Event team

 The Facilitator

His responsibility is leading the Kaizen Event to flow smoothly across the event He or she will organize meetings, collect initial data, and report results, decisions making during the Event and their preconceived opinion about which changes should be made will not be impacted by the facilitator

 The process owner

The process owner is responsible for addressing the process throughout the Kaizen Event They need to choose the member, obtain supplies and equipment, coordinate all stakeholders The process owner is necessary for defining the framework and providing overall information They also gain the commitment and sponsor from upper manager

 Subject Matter Expert(s)

They are not particularly attending all the Kaizen Event but they are required for answering all the relevant questions arising during the event, therefore depending on the complicated problem about technical or process, they will help to resolve the matter from upstream to downstream function comprehensively

 Team Members

They are critical for the Kaizen Event improvement, they are actually the one who works with the old process every day, more than anyone, they know what exactly happens with the process, and where need to put effort to treat the efficient flow of work Accordingly, they can develop ideas for improvement based on what they comprehend when receiving training sessions

Furthermore, we should go through the feasibility evaluation phase of the project, meaning that the project is able to solve an existing problem or the existing problem really affects the process, through the assessment will give us an overview which is raised and whether the proposed plan is really helpful

 Implementing the Kaizen Event

When the Kaizen event is taking place, it usually lasts from 3 to 5 days According to the implementation phase consists of four areas upfront, while executing and after the

Kaizen Event These four areas include: Prepare for event, execute event, follow-up after event and deploy full-scale change

The most critical things when we prepare the Kaizen Event is collecting data, we need

it to demonstrate the current state which problem appeared the facilitator sends out the agenda, report out to relevant parties A training on Lean tools is required to provide all members with the foundation of Kaizen, ensure the theory aspect of learner The Value Stream Mapping & Current State Analysis helps team to understand the issues instinctively, so they can easily identify the issues when joining the direct observation and process walk at the floor

After determining the wastes, the teams develop future state and prioritize improvements, they apply a lot of lean tools to create implementation plan, metrics, root cause, prioritize The team take their time to brainstorm the ideas, decide which one is efficient, when completing they will move to deploy the plan The implementation phase assures the long-term goal and schedule is modified when exploring before the actual event All the document related to the event must be save because it is a key for replication events and shared learning across business functions and based on the data collection every day they make daily out-brief to inform to the manager about Kaizen progress results or accomplishments

 Follow up

This phase consists of complete regular progress reviews, communication with stakeholders, continuous improvement, sustain In order to increase kaizen event performances, the team need to keep on track the improvements of Kaizen event and the status of completion of each item so that we can adjust them if any unexpected issues occur, continue to measure the Kaizen goals and compare with the results, allow all parties to reach the Kaizen updated results day by day, it is important to make sure to standardize the best practices and share the lessons learned within the organization

At the end of the Kaizen event a formal management reporting will be held to inform management progress, summarize total kaizen event accomplishments and benefits, the next step for further improvement and sustain the results properly, the lessons learned Therefore, the closing is focus on what was completed during the event and what are the on-going action items

2.5 Kanban System

Kanban is a material replenishment system that incorporates signals, pull instructions, visual cues, bins, carts, containers, etc., to help coordinate material and parts transactions throughout the factory and with suppliers

Barbara B Flynn definite a Kanban system can help the company decrease the amount

of inventory and help forecast better flow of material it will help schedule with ease so that company will improve productivity

2.6 Material Management

Material management is a process that coordinates distribution planning and control and logistics management, these combined functions help the organization controlling the material flows In addition, material management is an important function of an organization covering various aspects of the input process It contains some ways to control raw materials, procurement of machines and other equipment necessary for the production process, and spare parts for the maintenance of the plant Thus, in a production process materials management can be considered as a preliminary to the transformation process According to Material management book, its objectives are as follows:

 Maximize the use of the firm’s resources

 Provide the required level of customer service

If a manufacturer manages material well, it can help them not only manage the cost well but also bring many benefits to that firm, improve the revenue in the outcome

CHAPTER 3: ANALYSIS OF THE KAIZEN EVENT APPLICATION IN THE DIRECT MATERIAL MANAGEMENT AT INTEL PRODUCTS VIETNAM 3.1 The real state of Kaizen application at Intel Products Vietnam

Kaizen, as discussed in the theory section, is a "continuously improving" way of thinking, it is extensively applied in factories as a secret to make the workplace more efficient, minimize unnecessary wastes and variations With a continuous improvement mindset, the employees at Intel factories come up with innovations that can increase productivity, create favorable conditions to do a better job, as well as ensure the quality

of the output

3.1.1 Four phases of a Kaizen event at Intel

- Evaluation: This phase usually lasts 6-8 weeks, the topic will be identified and assessed for its feasibility and urgency and whether it will essentially bring results for implementation

- Planning/Preparation: This stage runs parallel to the evaluation phase At this stage, the owner will search for sponsors and stakeholders based on the reality of the enterprise issue, project scope, and boundaries are defined In addition, the relevant team leader, team member and participants are determined to defined roles & responsibilities, they gather and discuss the current state data collection, all relevant documents are found and prepared for the Kaizen event

- Event: This stage takes an estimated 3-5 days depending on the effort that facilitators, BB can put on as well as time given by business unit leader Many activities are implemented in this stage such as lean tool training, using value stream mapping to analyze the impact of the issues on production cost the result

of value stream mapping is current state analysis, after that they go for a process walk to observe what is going on in the floor and gather together to develop future state and create some new helpful ideas for improvement, set up an implementation plan, the report is sent out to the management, finally is documented event

- Follow-Up: this stage is actually an ongoing improvement stage, after executing the implementation plan, the team leader will examine the results by pulling out data to complete regular progress reviews and assess the proficiency of the process to have further improvement

3.1.2 Basic Kaizen Event flow at Intel:

1 S.P.A.C.E.R and introduction

In the introduction, the process owner will present the reason why this event is holding and the participants taking part in this

S.P.A.C.E.R stands for: Safety, Purpose, Agenda, Code of conduct, Expectations, Roles and responsibilities

- Safety: it includes all the ways that ensure the participants in the event be safe and comfortable such as emergency exits, Restroom…

- Purpose: the objective of this event is to learn some basic lean tools and make improvements in a focused area

- Agenda: it shows a clear time for everyone to acknowledge what detailed time each event will take place

- Code of conduct: Everyone in the event must commit to being present throughout the whole event, being polite and behaving in professional ways that pledge respect for any ideas, solutions without criticisms, keep cell phone and laptop on vibrate

- Expectation: get everyone’s expectations during the introduction

- Role & responsibilities: facilitators, participants

2 Management Kick-off/ Charter review

Firstly, the owner will have a presentation to everyone to deliver A3 paper to describe the overall picture of the situation, then they review SIPOC flow and data that the owner prepared before the event occurs

3 Lean tool Training

In this step, some tools used to perform Kaizen are mentioned as Lean, Six Sigma, 7 wastes, value stream mapping, VA/NVA analysis, Takt time, 5 WHY, 5S, standardization of work

It is a powerful aspect of the Kaizen where everyone watches the process, with the first view of the process virtually and then goes to production floor for physical walk At waste walk everyone needs to identify waste and take photographs if possible, they need to capture the process name, where it appears, why significant, what is the impact of them The goal of the walk is to calibrate the team and get everyone thinking of opportunities for waste elimination

5 Value stream mapping and current state analysis

After familiarizing the team with the process for current state value map validation through process walk, team report come back lean room to do value analysis and build-up current state map Firstly, they build up the process steps, secondly, the team discusses and decide on what VA/NVA Analysis & add data

a way of analyzing the process helps people to determine what adds value and what does not add value to the customer, thirdly the team create a timeline and assess data “does this make sense”

6 Brainstorm and prioritize opportunities and improvement

In the current state of brainstorming, they will use Flipcharts or Round Robin to make those ideas clear and logical, the brainstorming rules are all the ideas are respect because no ideas are a bad idea or too wild, the more ideas the better, the process owner should combine, modify, group and prioritize all the participants

to dedicate their ideas to the event After brainstorming ideas to eliminate waste, they start to rank and prioritize opportunities and improvements

7 Develop future state value stream and actions

In this stage, we need the involvement of facilitation if possible, they will get inside the problem and help us to have an efficient approach to the problem A document electronically and forecast benefits is critical in this step, then it requires all key leads are involved in future state mapping

8 Implement improvements if possible

It is the time to have action; the team leader breaks up into teams and begins implementing improvements and plans for implementation The team leader should make clear about specific assignments/tasks, let each sub-team report out

on activities frequently

9 Create an action item list of improvements not complete

At the end of the event, develop list of improvements/ actions that couldn’t be met during the week

10 Document event

Throughout the Kaizen implementation, every action is required to be documented if possible, for considering the progress of Kaizen Event

11 Create a follow-up plan

Types of plans include project plans with milestones Develop a follow-up plan that combines specific actions, responsible person, due date and updates, get agreement on interval schedule and set up appointments for follow-up meetings and presentations at the end of the event Daily out brief is required to know Kaizen progress, accomplishment or whether other teams need help or more training

12 Develop final report

In this last step, the owner needs to report out through presentation, the content

is that inform management of progress, summarize total Kaizen Event accomplishments and benefits, what is the next steps and the lessons learned and experiment sharing

 Comments and reviews: The Kaizen Event implementation process at Intel is

highly appreciated by the close connection between the stages This link goes from preparation to execution and follow up, so that the owner can understand the progress of the implementation, and promptly take corrective measures if an error occurs After all, the Kaizen Event is a way to improve job performance and satisfaction, and Intel has built a very good process to help employees return to satisfaction on the job

3.1.3 Encouraging the employee to do Kaizen Event together

Kaizen training courses are also continuously conducted to spread kaizen knowledge and spirit to the employees, as well as helping employees understand the practical meaning and benefits that Kaizen brings to the factory and to themselves One machine