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CASE STUDY

Unicon Concrete Products Ltd.

SYNERGY
Analysis by: team

CASE FACTS

UNICON CONSTRUCTION LTD


Unicon

- Major producer and supplier of four precast concrete products :


Facades Slabs Stairs Partitioninig Walls

Facades

were 20% of total sales in 1997 while slabs were 34%. Stairs made up only 6% of slabs while the rest 40% was made up by partitioning walls

In Hong Kong, the construction process had two steps viz superstructure and substructure and the design calculations and drawings has to be submitted to govt. building dept. for approval prior to construction The review process takes upto 2 months For construction either of the below two methods were used

CONCRETE CONSTRUCTION MARKET

Traditional method of pouring concrete walls and floors on site Assembling precast slabs and facades

PRECAST VS TRADITIONAL POURED CONCRETE STRUCTURES


Total

cost of construction project Reliance on high skilled tradespeople who commanded high salary Effects of bad weather and shortage of labour Better quality and finishing Restrictions on creativity and originality

HKHA PROGRAM

Hong Kong govt. announces a four year program to construct new residential blocks 179 blocks of them is expected in 1998 itself Also expected that among these half of them would require precast materials Currently Unicon can meet the need of 7 blocks per year while the industry capacity is estimated to be 20 blocks per year

CASE ISSUES

CAPACITY EXPANSION
Expansion

of plant will not be completed before Aug 1998, so capacity has to be expanded in short term alternatives available to achieve the same are

Two

Add a second shift Reallocate plant space

PURSUING BLANKET APPROVAL


Technical

submissions for HKHA projects could be resubmitted for future projects without requiring a review or approval by an RSE or govt. authority Cost saving for one housing block would be about HK$150,000 Lead time reduced by one month HKHA has to be convinced to accept the recommendation through demonstration of Mutual Advantages of the plan

RECOMMENDATIONS
It

is seen that the production cycle extend for around 26 hours and all the moulds in the inventory are used in the process So having a second shift will not add value addition if there is no resource addition Its hence recommended that Unicon reallocate plant space by discontinuing some of their products till the plant expansion happens

Also

recommended that Unicon for a short term should stop the production of stairs as well as that of partitioning walls and reallocate the resources to Slabs and Facades This way the resources can be effectively used on products that have high growth rate and higher margins.

CHANGES IN THE OPERATIONS


To

make the process better and to increase the through put


We can use accelerated steam curing there by reducing the curing period by 2 hours. This saved time can be used for mould setup there by avoiding the idle time.

The

timing for mould setup will be preponed by 2-4 hours and Unicon can have a special shift on that time just for mould setup.

CONVINCING HKHA TO ACCEPT UNICONS RECOMMENDATIONS


Mr.

Li can give the following points to convince HKHA :


Cost savings for one block would be about HK$ 150,000 This would provide for standardization of slabs and facades products thereby improving the overall quality of the structures

THANK YOU