A case study in electrical & electronic industry using mahalanobis-taguchi system and time-driven activity-based costing on production environment

Electrical and electronic industry is one of Malaysia’s leading industries which covers around 24.5% in manufacturing production sector. With continuous innovation in electrical and electronic industry, the demands for magnetic component are increasing. To produce good finishing products and optimize the company production operations, significant parameters that contribute towards these areas are very important. Thus, by solely relying on the control chart to confirm the significant parameter is not sufficient. Meanwhile, the activity-based costing being applied is quite obsolete because the method ignores the potential of time equation and capacity cost rate with significant parameters to measure the un-used capacity. Therefore, in order to prove that the proposed methods are practicable, it should be applied at different complexity of product. The main objective of this research is to validate the method of MahalanobisTaguchi system (MTS) and time-driven activity-based costing (TDABC) at inductor component workstation. The collection data is obtained from a company located in Kuantan, Pahang which focuses on the magnetic component production. MTS optimizes 10 parameters at magnetic component workstation and 7 parameters at inductor component workstation. Meanwhile, TDABC determines the un-used capacity by considering the significant parameters after developing the time equation and capacity cost rate. During the analysis of magnetic component, height of excess plastic header is consistently unaffected the operation. The parameter is classified as significant and it should be removed to eliminate any waste. Number of scratches and number of epoxy spot on winding coil are inconsistently affected the operation. These parameters are classified as insignificant and they should be maintained at this moment. Through the implementation of TDABC on the un-used capacity of time, the most overutilized sub-activities belongs to put the epoxy at the 4 leadout within core and header in epoxy application with -41,572,800 minutes and the smallest utilized portion belongs to insert the unit into the holder in epoxy application with 475,199.56 minutes. For the un-used capacity of cost, the most over-utilized sub-activities belongs to put the epoxy at the 4 leadout within core and header in epoxy application with MYR-189,571,968.00 and the smallest utilized portion belongs to transfer wound core to the forming machine in forming and pre-cutting with MYR4,273,234.92. During the analysis of inductor component for validation, condition of core is consistently unaffected the operation. The parameter is classified as significant and it should be removed to eliminate any waste. Condition of wire and condition of epoxy are inconsistently affected the operation. These parameters are classified as insignificant and they should be maintained at this moment. For the un-used capacity of time, the largest utilized portion belongs to take out the unit part from PVC tube and put on magnetic fixture in tape & reel with 8,397 minutes and for the un-used capacity of cost, the largest utilized portion belongs to the same sub-activity with MYR419.85. Therefore, this research successfully proves that the method of MTS and TDABC are practicable in mass production with different complexity of product

Feasibility study on the implementation of mahalanobis taguchi system and time driven activity based costing in electronic industry

Electrical and electronic industry is one of Malaysia’s leading industries which covers around 24.5% in manufacturing production sector. With a continuous innovation of the Industry, inductor component gets higher demand from customer and it is good if there is a study to convince that those factors are really significant to the production as well. Meanwhile, the current costing being used is difficult to access the complete activities required for each workstation and need separate analysis to measure the un-used capacity in term of resources and cost. The objective of this work is to clarify the relationship between Mahalanobis-Taguchi system (MTS) and time driven activity-based costing (TDABC) in the electronic industry. The data collection is focused on inductor component by consiedring the historical data in 2018. MTS is used as a method to optimize various parameters while TDABC is used to measure the un-used capacity by constructing the time equation and capacity cost rate. There are 7 parameters considered which are condition of wire, condition of winding, condition of epoxy, condition of core, condition of lead part, condition of marking and condition of soldering. As a result, MTS is successfully developed the normal and abnormal Mahalanobis distance (MD). In February, the normal MD is 0.9998 and the abnormal is 15.6538 with 2 significant parameters with signal to noise is 0.1244. In addition, there are 3 parameters consistently influenced along 10 months such as condition of core, condition of lead part and condition of soldering and 2 parameters are not consistently influenced such as condition of epoxy and condition marking. On the other hand, the total used and un-used capacity of time are 257124.02 minutes and 5217031.43 minutes respectively while the total of used and un-used of cost are MYR6,296,493.10 and MYR6214807.07 respectively. Eventually, this work concludes that both methods are a great tool and feasible to be implemented in the electronic industry

Analysis of Magnetic Component Manufacturing Cost Through the Application of Time-Driven Activity-Based Costing

With a continuous innovation of Electrical & Electronic (E&E) industry, the magnetic component gets increasing demand from customer and their target in production is 5000 units in one shift. Hence, to fix a product cost and to achieve the target finished product are the case study on E&E industry. In other words, the company’s product cost is calculated using traditional cost accounting based on volume product of magnetic component. This cost is unable to record accurately the changes of resources used to manufacture the product. The aim of this work to analyze the manufacturing cost of magnetic component incurred on production of E&E industry and time for good by Time-Driven Activity-Based Costing system (TDABC). In methodology, TDABC will be developed by using seven stages which are identify resources group and service processes of all activity and sub-activity, estimate cost of all resources supplied, estimate practical capacity, calculate capacity cost rates, develop time equation, determine time estimates for each sub-activity, and estimate capacity cost required. By having the analysis, loss manufacturing cost winding toroid core can be identified at −MYR2967504.12 and identifying of unused capacity (−889200.12 min) is capable to improve the time efficiency

Application of mahalanobis-taguchi system on electrical & electronic industry

Most of Malaysia’s activities in Electrical & Electronic (E&E) Industry more focused in manufacturing industry. The E&E Industry is one of Malaysia’s leading industries that has 24.5 percent in manufacturing sector production. With a rapid expansion of E&E Industry with a continuous innovation, there is no methodological that show the optimization procedure for a process that concern on E&E product in production area. The aim of this work is to develop the optimization parameter for a process of E&E product based on Mahalanobis-Taguchi System (MTS). In methodology, the optimization parameter will develop by using four stages which are construction Mahalanobis Space (MS), validation of Mahalanobis Space (MS), identify the useful characteristic, and predict and future diagnosis. The production in the industry can reduce the rejected product in parameter in a process. Consequently, significant parameters can be identified for E&E product. Keywords: Electrical & Electronic Industry, mahalanobis-taguchi system, optimization

Integration of Mahalanobis-Taguchi System and activity based costing for remanufacturing decision

Remanufacturing is a process that returns the second hand and used product that have the performance similar or better than the new product. The remanufacturer cannot be predicting the end of life (EOL) of crankshaft to remanufacture, repair or reject due to the limited information provided by Original Equipment Manufacturer (OEM) which depend on a traditional inspection to make a decision. Subsequently, Traditional Cost Accounting (TCA) which the manufacturing overhead are driven by the production volume are being applied. The aim of this work is to develop a distinctive pattern of crankshaft and identify the critical and non-critical parameter of crankshaft based on the Mahalanobis Taguchi System (MTS), then applied the Activity Based Costing (ABC) as a method of estimation for the remanufacturing cost of crankshaft. In methodology, the scatter diagram is construct to develop the pattern recognition using T Method-3, Taguchi orthogonal array (OA) are applied to identify the important parameter using T Method and lastly, the ABC system is analysed the costing of critical parameters. Quality inspection is the most important in quality inspection to reduce the number of parameter of each engine model and to compare which costing system can produce the cheapest price. Therefore, it is also to prove the combination of applying MTS method with ABC system will make the profitability and manufacturing cost are more accurate

Exploring beneficial of Mahalanobis Taguchi Method on production environment

The Mahalanobis–Taguchi system (MTS) is a relatively new collection of methods proposed for diagnosis and forecasting using multivariate data and Mahalanobis distance (MD) scale used to measure the level of abnormality of “abnormal” items compared to a group of “normal” items. By forecasting a lot of waste product will be reduce. The aim of this work is to propose a new method capable to reduce a lot of waste product especially in production environment. From this work, MTS will be used to diagnose the rejecting parameter on electronics component. As a result, MTS can be used to identify the unhealthy activities on a group and can recognized the important of reducing a lot of waste product from rejected types of inductor component to solve any issue related to forecast and unused capacity in production environment

Development of a new costing structure in production environment using activity based costing

Every product should have assigns their own costing system. Traditional cost accounting (TCA) is generally used by current state of industrial area in Malaysia. There are many studies proved the weaknesses of TCA [1] and need a lot of improvements. The aim of this work is to propose a new costing system that practically capable to improve costing system in current industry practices. In this study, ABC method has been proposed to the electrics and electronics company on inductor component. There are 18 workstations involves and the data was collected based on data in 2018. As a result, an Activity-based costing (ABC) system recognized the relationship between costs, overhead activities and manufactured products, and then it can assign indirect cost to products less subjectively than traditional method

The Impact of Capacity Cost Rate and Time Equation of Time-Driven Activity-Based Costing (TDABC) on Electric Component

Today, in this big business competition, it is important for the company to incorporate an accurate cost estimation to decide the best price for products to gain profits. This research study revolves around a case study company, which manufactures electric and electronics products. The objective of this study is to analyze the manufacturing process cost at the case study company using Time-Driven Activity-Based Costing (TDABC). This research began by collecting data related to the production costs of a selected product. The product has been selected based on the volume of production which is high and continuous production. There are two parameters of TDABC to be considered. Firstly, the capacity cost rate and secondly, the time required to perform activities. Both parameters can be estimated easily and objectively. Eventually, the results showed that by applying the TDABC method, the capacity utilization and time efficiency can be clearly viewed. The company gained information on manufacturing costs and time utilization for those activities and could generate further action to increase efficiency and have the opportunity to use this method to enhance the accuracy in determining the appropriate process for any kind of product

Application of Activity-Based Costing In Electronic Manufacturing

An accurate product costing is very crucial in the production environment. The traditional cost accounting (TCA) has been reported to have limitations such as inaccurate cost allocation. This study explores the benefits of Activity-based Costing (ABC) in electronics manufacturing. Furthermore, it is to appraise the strength of cost driver in ABC in order to propose a better costing structure. To overcome the limitations of TCA, we applied ABC method to the costing structure of an electronic and electrical company. This costing method is applied at inductor production line. The data collected include labor cost, maintenance cost, material cost and consumable cost. All costing data are based on 2018 information. The product unit calculated by ABC is MYR 0.72 that is lower than TCA which is MYR 1.07 which is by 32.71% difference. Thus, ABC determined the actual cost of the product to be compared to current costing method that is TCA. In conclusion, ABC provides more accurate costing information to the company than current method that is TCA

A review on the integration of mahalanobis-taguchi system and time-driven activity-based costing on production environment

Identifying research gap is a fundamental goal of literature review. While it is acknowledged that literature reviews should identify research gaps, there are no methodological guidelines of the integration of Mahalanobis-Taguchi System (MTS) and Time-Driven Activity-Based Costing (TDABC) on production environment. MTS is used for optimization of the process in workstation while TDABC is used time as criteria or key measurement variable for the allocation costs. The aim of this study is to explore the strategic of integration of MTS and TDABC on the product in production area. In this study, published works was taken related to MTS and TDABC from the period 2000-2018 are analyzed 40 papers. The study reported only 3 papers out of 40 papers show that integration of MTS with others methods. However, there is no paper show that the methodology use integration of MTS and TDABC. This integration indicates better process in each workstation on production and provide more accurate cost because all cost involves the time