CAMP CARROLL, South Korea, Dec. 12, 2017 —
DLA Distribution Korea’s Lean Six Sigma Black belts, Green belts, and Quality Assurance Team members visited Taegu Tec to tour their facility on Nov. 29.
The focus of the visit was on Taegu Tec’s quality management and continuous process improvement practice. Taegu Tec is a multinational corporation headquartered in Daegu, Republic of Korea. Taegu Tec has 26 overseas subsidiaries, 130+ distributors, and 30 agents operating in 50 countries across Europe, Asia, Australia, and the Americas. The company is recognized as being the world’s oldest manufacture of tungsten and related products with a reputation for excellence.
In 2006, Warren Buffett’s Berkshire Hathaway Group purchased an 80 percent stake in the company, and a few years later acquired the remaining 20 percent. Buffett has personally visited the headquarters in Daegu twice.
Kim Tae Hyon, Green Belt and Storage Division branch chief, said “Being able to visit a world class company and see their distribution operations was extremely valuable. It provides an excellent bench mark to see how DLA Distribution Korea stands against some of the best in the world - and in many areas we do similar things, only slightly differently,” said Kim Tae Hyon, Green Belt and Storage Division’s branch chief. “With a little forethought, we can design some of these improvements into our new distribution center when we look at putting in the guts in 2020.”
The chief financial officer for Taegu Tec, Pak, Byong Gil served as the guide for the group during the tours of the 3PL distribution operation, warehousing at the plant floor, the quality control test area, and the production floor.
In addition to the tour of the facility, Taegu Tec had their quality assurance team provide an overview of the Taegu Tec quality program. They explained how they constantly strive to be the best in the world in their industry.
For O, Hyon Yong, senior LSS blackbelt and process improvement specialist, there were many important takeaways. “In the Taegu Tec distribution center, there is no separation between shipping and receiving. The same employees perform both functions, at the same workstation, and the warehouse management system switches back and forth between the functions depending on the workload. How they set up their staging area vertically in the tower system where the conveyors automatically manage the backlogs is now one idea in my wish list. Our new distribution center would be more efficiently utilizing the space if a vertical staging system is available. Taegu Tec has much smaller INTERMEC PC43D 4*4 label printers and locally designed mobile carts with a tablet, keyboard, step ladder, and a standard battery than we do. Like our mobile carts, their carts charge overnight and then can easily operate an 8-hour shift. Most impressive was that every workstation was exactly the same, and 5S was evident throughout the facility. Mr. Kim, Tae Hyon and I have already agreed that we will work to make sure DLA Distribution Korea’s packing stations look like Taegu Tec.”
Dave Harris, DLA Distribution Korea deputy commander, noted “While Taegu Tec’s distribution center had some state of the art storage systems, many of the processes and functions were the same as DLA Distribution Korea’s, and in some cases, we are even better than Taegu Tec. For example, they don’t track the capability of their employees when it comes to pick and pack rates per hour, so they have no way of knowing if the operation was efficiently and cost effectively manned. Hourly capability is something we track every day at DLA-DK. A second area where I think we might be better is in rack storage. Although the majority of Taegu Tec stocks were small, binnable items - and some areas were highly automated, in the rack section of the warehouse the warehouse management system has no data on dimension or weight. Pallet material is driven to the area, and then the individual warehouse operator has to decide which location to stow the pallet. With such a small rack storage area, this is probably okay for Taegu Tec, and it wouldn’t be cost beneficial for them to invest the additional funds to enhance the WMS, but for us it is absolutely critical.”
“The standardization and 5S aspects of the Taegu Tec distribution center were impressive, and something all members of the DLA Distribution Korea team saw as enablers to world-class warehouse operations. Although we don’t have the money to invest in the modern warehouse storage and distribution aids, we learned a lot about how we aren’t far off from what they do in their distribution center, and there are many low cost process improvements we can implement at DLA Distribution Korea to help close the gap between us and Taegu Tec,” explained Harris.