Unstable reliability of production line a case in tri an factory, nestle viet nam

List of figure Figure 1: Structure volume of Tri An factory Figure 2: Actual volume of Tri An factory in the period 2013 to 2019 versus plan Figure 3: Instant coffee market share in Vi

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Tran Quoc Tien

UNSTABLE RELIABILITY OF

PRODUCTION LINE: A CASE IN TRI

AN FACTORY, NESTLE VIET NAM

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2020

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Tran Quoc Tien

UNSTABLE RELIABILITY OF

PRODUCTION LINE: A CASE IN TRI

AN FACTORY, NESTLE VIET NAM

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: DR PHAN THI MINH THU

Ho Chi Minh City – Year 2020

List of figure 5

List of table: 5

Chapter 1 Problem context 6

1.1 Nescafe overview 6

1.2 Symptom 9

Chapter 2 Problem identification 11

2.2 Explore the problem mess 11

2.1.1 Limited domestic market volume 12

2.1.2 Lack of semi-product order from Nestle network 15

2.3 Possible problems identification 17

2.2.1 High competition from domestic competitors 17

2.2.2 Uncompetitive cost of production 18

2.2.2.1 High depreciation period of new plant 21

2.2.2.2 Uncompetitive variable cost 22

2.2.2.3 High fixed overhead cost 22

2.2.2.4 High price of raw material 23

2.2.3 Unstable reliability of production line 24

2.3 Central problem 28

2.3.1 Definition of unstable reliability of production line 28

2.3.2 Importance of reliability of production line 29

Chapter 3 Causes validation 30

3.1 High unplanned stoppage from process failure 30

3.2 High unplanned stoppage from breakdown of machine 32

Chapter 4 Alternative solution 36

4.1 Alternative solutions 38

4.1.1 Implement employee competency matrix management program 38

4.1.2 Enhance maintenance strategy by applying preventive maintenance 41

4.1.3 Building the high skill technician resource 43

4.2 Solution justification 45

4.3 Action plan for set of solution “implementation of competency matrix management” and “enhance maintenance strategy by enhancing preventive maintenance” 46

4.3.1 Action plan for implementation of competency matrix management 46

4.3.2 Action plan for enhance maintenance strategy by enhancing preventive maintenance 48

Chapter 5 Conclusion 51

Chapter 6 Supporting document 52

References 57

List of figure

Figure 1: Structure volume of Tri An factory

Figure 2: Actual volume of Tri An factory in the period 2013 to 2019 versus plan

Figure 3: Instant coffee market share in Viet Nam in 2019

Figure 4: Product volume structure between local product and export semi-product

Figure 5: Export product volume compare to available capacity

Figure 6: Initial causes – effect maps

Figure 7: Soluble coffee local volume from 2013 to 2019

Figure 8: Cost of production in Tri An factory

Figure 9: Asset intensity of Tri An factory from 2013 to 2019

Figure 10: Update causes-effect maps

Figure 11: Process of pure soluble coffee line

Figure 12: Unplanned stoppage at Tri An factory in 2019

Figure 13: Final causes-effect maps

Figure 14: Solutions causes-effect maps

Figure 15: Action plan for competency matrix management program

Figure 16: Cost for competency matrix management program

Figure 17: Action plan for enhancing preventive maintenance

Figure 18: Cost for enhancing preventive maintenance

List of table:

Table 1: Production volume number of Tri An factory in the period 2013 to 2019

Table 2: Product volume number between local product and export semi-product

Table 3: Local product and export semi-product ratio in Tri An factory from 2013 to 2019 Table 4: Detail cost of production in Tri An factory

Table 5: Fixed overhead cost structure in Tri An factory

Chapter 1 Problem context

1.1 Nescafe overview

Nestlé is the world’s largest food and beverage company, based in the Switzerland, town of Vevey where it was founded more than 150 years ago Nestle are present in 189 countries around the world, and its 328,000 employees committed to the purpose of enhancing quality of life and contributing to a healthier future Nestle want to help shape a better and healthier world, also want to inspire people to live healthier lives Through more than 2000 brands ranging from global icons, like Nescafé or Maggi to local favourite one like Milo Nestle are able to offer a wide portfolio of products and services for people and their pets throughout their lives Nestle ’s performance is driven by Nutrition, Health and Wellness strategy Nestle is organized into 3 geographic zone and globally managed business: Zone Europe, Middle East and North Africa (EMENA); Zone Americas includes North and South America (AMS); Zone Asia, Oceania and sub-Saharan Africa (AOA) and Nestle Waters, reported separately for consistency with long-standing practice of the Group The revenue mainly came from the sales of Zone AMS with 34% total sales and then Zone AOA (23%) and Zone EMENA (21%)

Nestle Viet Nam is under managing of zone AOA that has been a company with great performance in nutrition, health and wellness industry Many years since it entered in Vietnam market, Nestle become successfully one of the largest companies in producing high-quality food and beverage Nestle Vietnam is continuing to become a top-rated company in Vietnam One of

the most important thing for Nestle to succeed as nowadays is effective and flexible business strategy to meet their expectations in the long run

Nestle Vietnam organization is divided to 5 key divisions: Sales & marketing division, Finance

& Control division, Supply chain division, Human Resource division and Technical division that

is led by chief executive officer Nestlé Vietnam currently operates 04 manufacturing plants: 2 factory produce Milo RTD (ready to drink) are located in Dong Nai and in Hung Yen province, Nescafe plant is in Amata zone, Dong Nai province and one another factory produce Maggi is located in Bien Hoa industrial zone, Dong Nai All 4 factories are under managing of Technical Director Nestle Vietnam employs about 2300 employees around Vietnam All the factories of Nestle in Vietnam are designed and built to meet the highest standards of quality uniformly throughout the Nestle group, and always adhere to the laws of Vietnam on environmental protection, pollution prevention and adopt initiatives to reduce emissions into the environment, save water, aim to zero waste in the production environment

Tri An factory was opening in July, 2013 with capacity 12,500 tons product of pure soluble coffee per year that is the biggest factory in term of producing soluble coffee in Viet Nam and

25th coffee factory of Nestle worldwide, 9th one in AOA zone (Asia, Ocean and Africa area) The factory was built with strategy to ensure demand for Viet Nam local market as well as low cost export semi-product to others Nestle factory over the world, especially in zone AOA

Specifically, current domestic volume is stable around 25% capacity of the factory while export semi-product volume occupies approximately 75% capacity of Tri An factory

Figure 1: Structure volume of Tri An factory

Source: Tri An factory, Nestle Viet Nam

Additionally, Tri An plant was built together with the most advantage technology of Nestle group, total investment is up to 238 million dollars, creates more than 200 jobs for local people Given shape shows the structure of organization of the factory that lead factory manager, there are five departments support to ensure smoothly operation of the factory

25%

75%

Structure volume of Tri An factory

Local product volumeExport semi-product volume

1.2 Symptom

Figure 2: Actual volume of Tri An factory in the period 2013 to 2019 versus plan

Source: Tri An factory, Nestle Viet Nam

In detail, production volume of Tri An factory [1] is showed by illustrated table:

Production volume in Tri An factory

Actual 2800 5528 5143 5579 9684 9004 9000

Plan 2800 5200 7000 9000 12000 12500 12500

Table 1: Production volume number of Tri An factory in the period 2013 to 2019

Source: Tri An factory, Nestle Viet Nam

The line graphs indicate the production volume from the year of start up factory 2013 to current year 2019 Overall, the actual production volume is increasing over the period However,

it is under target number since 2015 Specifically, production volume target is to reach to the 12,000 tons’ soluble coffee in 2017 and achieve maximum capacity 12,500 tons’ coffee product since 2018 as master plan Actually, production volume only reaching to 9,684 tons and 9,004 tons compare to the plan 12,000 tons and 12,500 tons in 2017 and 2018, respectively

Chapter 2 Problem identification

2.2 Explore the problem mess

With the symptom that production utilization of Tri An factory is under performance since

2015 To find out the main problem leads to the illustrated symptom, the given steps were carried out:

- Refer primary data from Nestle company through reports as good as key performance indicators

- Conduct depth interview with management team of Tri An factory:

+ Ms Ta Van Anh (Vietnamese, Finance manager): Ms Van Anh has been working at Nescafe plant since project green field in 2012 She started career path at Nestle with the position

as finance executive After 5-year contribution to the organization, she was promoted to finance manager in 2017 As finance manager, she takes care the costing system of Tri An factory, lead and coordinate with related department like production, engineering…to ensure accuracy of cost planning as well as cost reporting With the proven tracking, Ms Van Anh has deep knowledge

in term of costing of the factory as well as overview about Nescafe brand

+ Mr Hoang Quoc Truong (Vietnamese, Production manager): Mr Truong has worked for Nestle 8 years since start up period in 2013 as production supervisor With the proven excellent performance, Mr Truong was promoted to Technologist that responsible for coffee processing technology, after that become production manager in 2018 He has deep knowledge in coffee technology as well as witnessed variable change in the plant As production manager, Mr

Truong responsible for overview operation activities of coffee processing from managing people: production operators, production supervisors to ensure quality, safety as good as production output of the plant

+ Mr Vijit Jindupharit (Thailand, engineering manager): Mr Vijit has worked at Nestle for

17 years He started the career path at Nestle as industrial service engineer in Thailand, at

Nescafe plant there He passed many positions in his 17 years at Nestle like: corporate safety and health manager, project manager, end to end project manager in Thailand before joining Nestle Viet Nam as engineering manager in 2018 As engineering manager, Mr Vijit take care 58 members in engineering team to ensure reliability of production plant as good as develop their

skill to meet requirement of business requirement With the variable experience in Nestle

organization, he will provide a valuable sharing related to indicated problem

+ Mr Ian Johnson (English, factory manager): Mr Ian has contributed to Nestle over 30 years, he passed variable position in Nestle from production manager in England, specialist team leader in Switzerland, then factory manager in South Africa He has become factory manager in Tri An factory since 2018 As a factory manager, Mr Ian responsible for all internal activities of Tri An factory like: production operation, finance, human resource management…to external activities like local governance as well as market/zone management team to ensure demand of business strategy

- Refer literatures to prove cause-effect map as good as link between symptom versus possible problems Meanwhile, double check real situation in Nescafe plant to understand what happened

- Re-interview management team to validated the central problem

Base on the secondary data, in depth interview with management team as well as understanding

as an employee in the indicated organization There are two possible problems lead to under performance of production utilization:

- Limited domestic market volume

- Lack of semi-product orders from Nestle factory network

2.1.1 Limited domestic market volume

The pie chart showed the market share portion in year 2019 It is clear that top 3 biggest market share is Nescafe, Trung Nguyen-G7, and Vina cafe with 32%, 28% and 27%,

respectively The soluble coffee market is extremely competitive between Nescafe that is biggest soluble coffee brand in the world and Trung Nguyen – a King coffee in Viet Nam and Vina cafe – the oldest coffee giant in Viet Nam coffee market

Figure 3: Instant coffee market share in Viet Nam in 2019

Source: Marketing department, Nestle Viet Nam

Following is the given bar chart shows the ratio between local and export product volume of soluble coffee at Tri An factory in Viet Nam Overall, local product is stable throughout the whole period from 2013 to 2019 In other words, soluble coffee market is saturated in Viet Nam Coffee manufacturers are saving market share from competitors instead of explore new potential customer

Mc coffee Others

Figure 4: Product volume structure between local product and export semi-product

Local - Export product ratio in Tri An factory

Local 2800 2824 3035 3838 3361 3136 2980

Export 0 2704 2108 1741 6323 5868 6020

Volume 2800 5528 5143 5579 9684 9004 9000

Table 2: Product volume number between local product and export semi-product

Source: Tri An factory, Nestle Viet Nam

The DATA showed that the production volume of local soluble coffee product of Tri An factory does not growth in 3 years continuously from 2017 to 2019

2.1.2 Lack of semi-product order from Nestle network

The indicated bar chart shows the actual volume of soluble coffee product that is ordered from Nestle network compare to available capacity of Tri An factory Overall, the spare capacity

is always maintaining at around 2500 tons since 2017 Although there was a big evolution in

2017, the production volume gaps is closer from 6500 tons to 2500 tons

Figure 5: Export product volume compare to available capacity

As sharing from Mr Ian Johnson (factory manager) “the order from Nestle factory network

is increased significantly, it reached to 6000 tons per year since 2017 compare to base line number 2000 tons However, our capacity can produce more around 2500 tons It is clear that we build the factory with the target of full utilization so we need to work more on it by delivering competitive total of production cost, reliability of machine, showing that our people competency The better our performance, the more volume is coming It is clear because Tri An factory is considered as export factory”

Product volume export vs available capacity

Export Available Capacity

From the above analysis, theory informed as well as secondary data, the initial cause – effect maps was established below:

Figure 6: Initial causes – effect maps

Production volume in Tri An factory is structured in 2 groups: one type of soluble product is for local market, remaining one is exported to others Nestle factory names semi-product

Currently,

- The symptom: production utilization is under performance

- Possible cause: There are 2 main reasons:

+ The limited local coffee market due to very high competition from competitors while total market share is saturated

+ The order from Nestle factory network have not reached to the maximum capacity yet For the given second possible cause, there are 2 main things lead to lack of order from Nestle factory worldwide that is uncompetitive of total cost of production and unstable reliability of production line

Under performance

of production utilization Lack of semi-

product order from Nestle factory network

from competitors

2.3 Possible problems identification

2.2.1 High competition from domestic competitors

The given bar chart indicated the volume tracking from Tri An factory in the period time

2013 to 2019 It is obvious that the local volume does not growth event it is reduce slowly from year 2016

Figure 7: Soluble coffee local volume from 2013 to 2019

The world witnesses the first coffee drink in the sixteenth century, then coffee cup has played

a significant role in society by providing the middle drink for intellectuals from all sides of life from waking up at early morning to interested meeting around a world Later on, coffee was slowly known in European area it was recognized and showed up the important role for both its sociability and its taste In the short time, coffee drink was gone throughout European area and appear everywhere in the natural locations for political, literary and societal meeting In the middle of seventeenth century, coffee land out at North America to replace the favourite morning drink that is beer (Nestle coffee manual)

For most people, coffee is the fuel that create good start day in the morning and help them go through noon at office and/or jobsite Zhang [2] showed that 3 cups of coffee is an average number for drinker Growth of coffee industry has never signally stopped, its market value has

reached to the $100 billion There is large space for opportunity, however where there’s opportunity, there are also threats for both current manufacturers as well as new comers

The Viet Nam coffee market witness the extreme competition between three soluble coffee producer giants: Nescafe (Nestle) is the biggest soluble coffee producer in the world, Trung Nguyen is known as King coffee in Viet Nam, Vinacafe is oldest brand name in Viet Nam that has deep knowledge in culture of coffee drinkers It can be said that Nescafe brand in Viet Nam

is under very pressure from competitors

However, the indicated problem identification is external factor that factory side can not control Moreover, Tri An factory is following the strategy as “export factory” The central focus

is on export product where the factory has high potential volume to get It is witnessed by given table that show weight between local product volume versus export product volume

Local - Export product ratio in Tri An factory

Local 2800 2824 3035 3838 3361 3136 2980

Export 0 2704 2108 1741 6323 5868 6020

Volume 2800 5528 5143 5579 9684 9004 9000

Table 3: Local product and export semi-product ratio in Tri An factory from 2013 to 2019

Source: Tri An factory, Nestle Viet Nam

2.2.2 Uncompetitive cost of production

As sharing from Ms Van Anh (finance manager), for cost structure of Tri An factory, total production cost is represented by four main contributors that is depreciation, variable cost, fixed overhead cost and cost of raw material

Moreover, production cost in year 2019 of Tri An factory illustrated in given pie chart The highest portion of production cost is leaded by raw material at 61%, depreciation occupy 17%,

10% is spending for fixed overhead cost, variable cost is 7% and finally, cost of production is occupied 5% by packaging material

Figure 8: Cost of production in Tri An factory

Source: Tri An factory, Nestle Viet Nam

Cost of production - Tri An factory

Raw Material Packaging Variable FFOH Depreceation

Cost of production - Tri An factory

Table 4: Detail cost of production in Tri An factory

Source: Tri An factory, Nestle Viet Nam

As sharing from Ms Van Anh “our production cost is not competitive compare to others coffee factory in zone AOA, we are ranging at 6th in the coffee network It is obvious that others factory’s depreciation is approximately 0 vnd yearly”

Starova [3] indicates depreciation is an internal source of self-funding of an entity

Depreciation is a tool to allocate investment amount to a fixed period to calculate the profit of project

Luca [4] illustrated that with regard to the feasibility of assigning the cost to an objective that can calculate distinct cost base on different scenario of production volume The costs are

classified as fixed (constant) costs and variable (flexible) costs Fixed costs are expenses that always spend regardless of production operation, while variable costs grow together with levels

of production If there is no production, there are no variable costs

The coffee referred as the most grateful lubricant known to the human machine Coffee, comprises the consumable beverage obtained by extracting roasted coffee with hot water The green coffee considered as the second most important food commodity in the world after wheat, and considered as a main item for the international trade for the processing of roasted coffee, instant coffee and other coffee products (Nestle, basic coffee manual) Coffee growers keep growing and appeared over the world Today, Brazil, Vietnam, Indonesia, Mexico, Peru and Colombia play major roles in the world's coffee production Budget for raw material refer to the cost of the components that go into a finish good product Viet Nam is the second produced green coffee on the world and coffee is not only significant product for export but also local market demand

2.2.2.1 High depreciation period of new plant

Capital investment in Tri An factory project is approximately 5000 billion VND (Tri An factory, internal source) Tri An factory has opened ceremony in 2012, the exist depreciation of fixed assets calculated at the new value at current price – approximate 5000 billion VND, it includes value of machinery, equipment, building…not includes land and circulating capital Specifically, 25 years is a period of fixed asset in coffee factory, average depreciation is about

185 billion vnd yearly that occupied 17% of total production cost (Tri An factory, internal

source) Compare to most of coffee factory in Nestle network, current depreciation is 0 VND

In depth interview with Ms Nguyen Thi Van Anh (finance & control manager), she said that

“Tri An factory is new factory which is facilitated with the most modern technology in Nestle

coffee network, also over the world First few years of operation, depreciation is occupied the big amount in our cost spending Specifically, equipment like hoist, valves, lab equipment…life cycle is 5 years Moreover, high speed rotation machine like coffee separation, rotary

device…which is very expensive machine with life cycle is 10 years It is obvious that we are quite weak in term of depreciation cost”

2.2.2.2 Uncompetitive variable cost

At Tri An factory, variable cost can be divided in 3 main category:

- Energy uses to produce coffee product like CNG, electricity, steam, water

- Direct labour like production operators, production supervisors

- Packing direct labour like third party to pack good product

The average amount is approximately 74.5 billion vnd that occupy 7 portion of total

production cost (Tri An factory, internal source)

Mr Hoang Quoc Truong (production manager) said that “coffee plant is complex processing that most of machine were imported from European area In other words, the document is in English as well as training courses It is a challenge for shopfloor level to learn and enhance their competency for both production and engineering team If operators are really understanding the process, they would operate the line efficiency with less unplanned stoppage that lead to reduce energy consumption”

2.2.2.3 High fixed overhead cost

At Nestle, Tri An factory, fixed overhead cost is divided in two category: fix personal cost and general service

The fixed overhead costs for personal cost includes salary for management team like factory manager, head of departments, maintenance team, human resource members, etc…

The general service include costs such as budget for maintenance activities on machinery and building, electricity, water for overall factory operation include irrigation, canteen service In coffee production factory, it also expenses a big amount for chemical that uses to cleaning the

production system period, treat the waste water from production process as well as goods

consumes together with volume of production like lubrication, dirt filters, gloves, etc…

In overall, the fixed overhead cost is about 103 billion VND, occupy approximately 10% total cost of production that is indicated in table: (Nestle, Tri An factory, internal source)

Tri An factory – fixed overhead cost

Fix personal cost - Salary of management team

- Payment for maintenance team

- Payment for related department: human resource, finance and control, quality

General services - Electricity and water for factory operation

- Maintenance budget: machinery and building

- Chemicals

- Training budget

- Consumable usage

- HR service

Table 5: Fixed overhead cost structure in Tri An factory

In depth interview with Ms Ta Van Anh (factory controller), she gave a comment that “Tri

An factory is considered as start-up period We are not excellent enough to attracted much

volume from coffee network Until now, utilization of the factory is around 75% while fixed cost

is the same in term of full utilization It is obvious that fixed cost per ton of product will reduce significantly when volume increase”

2.2.2.4 High price of raw material

n In Tri An factory, finish good is pure soluble coffee, simply raw material is green coffee beans Tri An consumes about 17,000 tons raw material of green coffee, approximate 650 billion VND yearly that it’s portion is about 61% of total production cost (Tri An factory, internal

source) In the depth interview with engineering manager, Mr Vijit Jinduphirit shared that “As you know that, green coffee bean has grade 1, 2 and 3 with far different price At Nestle, the standard goes through globally so Tri An is using 100% grade 1 for all type of semi product It is over words to say that raw material amount is the biggest spending from our pocket,

approximately 63% in total cost of delivery However, the factory is considering to use grade 2 coffee for some type of product I believe the chart of cost spending will change significantly when applying the change without impact to quality standard”

Conclusion, from the above analysis, theory informed, secondary data support together with depth interview Ms Van Anh (finance manager) It can be said that production cost at Tri An factory is uncompetitive enough compare to others coffee factory in zone AOA It is specific mainly impact by depreciation because of high spending period of new factory However, from this problem solving project, author do not involve to indicated factor because currently,

production volume of Tri An factory has not reached to optimum volume yet It is clear that when production volume increases, total cost of production will be reduced Then, author focus

on other factors to maximize production volume

2.2.3 Unstable reliability of production line

At Nestle, specific is Tri An factory, reliability of production line is representative by KPI (key performance indicator) AI – asset intensity that is indicated by formula:

Good production time is the time that production line produces the dedicated product at nominal speech with output as finish goods In other words, the productivity of machine is 100%

as design

Occupied time is the time that count from turn on the machine to finish production operation that include cleaning activities

The given table is Nestle standard to calculate the Asset intensity of production line It is applied through Nestle globally From the table, we can see that the main factor that impact to Asset intensity is unplanned stoppage time

The given line chart indicated the Asset intensity of Tri An factory from 2013 to 2019 In overall, the performance of Tri An factory is under target compare to others coffee factory in Nestle network In the first 3 years of start-up factory, the Asset intensity trend is going up from 55% to 78% in the period 2013 to 2015 However, in the next period from 2015 to 2019, the AI

is fluctuated around 80%

Figure 9: Asset intensity of Tri An factory from 2013 to 2019

Source: Tri An factory, Nestle Viet Nam

Total Time

Stoppages

Prod.Time @ Nominal Speed

Good Prod Time

Production Time Unplanned

Stoppages Speed Loss

Waste & Rework

Stoppages Estimated Unplanned Stoppage Time Not Occupied

In the depth interview with Mr Ian Johnson (factory manager of Tri An factory), he said that

“Tri An factory is new set up factory I believe in that the latest coffee technology was fully facilitated here, together with spirit of Vietnamese The reliability of production line is expected higher Why? It is simply because this is the key performance indicator to let the zone

management allocated the volume to us, beside of important factor is total cost of production one If we look around at our coffee friends like Quingdao (China), AI is around 89%,

Chachoengsao (Thailand) is about 85%, Shah Alam factory in Malaysia is around 86% AI that also above the target line”

Production line is a connection simultaneously of raw material, machines, automations, utility and a control system to produce a desired product with the purpose that operate

appropriately at the maximum production capacity and acceptable quality of the products The reliability of machines is the most factor that decide the performance of production line

Tsarouhas (2014) [5, p.101-110] stated that an unplanned stoppage of a machine may affect the productivity of the remaining of the machines Consequence, the production output can’t meet the demand of expectation By the end, it is obvious that reliability has the significant role to ensure the availability as well as production performance of manufacturing chain

Tsarouhas (2014) [5, p.101-110] also indicated the results of a study that was conducted to identify how reliability of production line adherence a manufacturing system as well as

significant impact on manufacturing performance Practically, the period of downtime, the type

of unplanned stoppage is not only impact on production capacity but also rework product that cannot meet the quality as expectation Specifically, in coffee production, the different

downtime, the distinct frequency of breakdown that make reduction of production nominal speed and time to warm up the production process

Tsarouhas (2018) [6, p.821-842] indicated the urgent problem of any production enterprises

is the high maintenance cost and the low reliability that need to be solved in the effective

manner

In fast moving consumable goods industry, production line is constantly adapting in change drastically in operations management, technology, specific product as good as quality standard

of product For the simple linkage between two key factors, the higher cost you spend on production system, the higher reliability of machine reached However, organization that want to have strong and sustainable health in current highly competitive business environment must satisfy the consumer in term of quality product with the reasonable cost In the other hand, reliability and cost are isolated in definitions, but they should be balanced when conducting reliability analysis for production line To ensure accuracy of information collection about production reliability performance that requires a reliable program In other words, this in turn will be a direction to convert this information to the implementation of analytical and management processes Moreover, Tsarouhas (2018) [6, p.821-842] stated that the reliability has become an interested subject in 4.0 industry due to increasing competition and complex product design and development Then, it is not over words to say that reliability is one of key factors affect to production performance

Additionally, Tsarouhas (2018) [6, p.821-842] illustrated that

the reliability characteristics of equipment, which is evaluated in design phase, can partially change during the operational phase The outcome of this is a huge effect on the

performance of production facilities

Conclusion, from the illustrated analysis, theory informed, and secondary data report at Tri

An factory as well as depth interview management team There is obvious main problem that is unstable reliability of production line leads to production utilization of Tri An factory is under performance The given figure is updates cause – effect maps after validation

Figure 10: Update causes-effect maps

2.3 Central problem

2.3.1 Definition of unstable reliability of production line

Chlebus [7] said that reliability of production line is an ability to conduct required function

to transfer raw material to become a final product at an indicated time and under indicated

conditions In term of operation, reliability of production line is an ability of machinery and people to perform operational tasks without failure interruption That is usually illustrated as a performance indicator which provides information of overall production line capability,

productivity or quality, as a measure of production time In other side of coin, unstable reliability

of production line illustrated production line can not perform desired function such as capability, productivity or quality of product in the given time under indicated period time

At Tri An factory, unstable reliability of production line is that production line capacity has big deviation, sometimes, capacity is 2 tons pure soluble coffee per hours as standard,

sometimes, it is 1.5 tons or 1.7 tons per hours Event, capacity can reach 2 tons per hours,

whereas, failure of quality

Under performance of production utilization

High competition from domestic market

semi-reliability of

production line

Central problem