6 - Chikara Nakagawa(Taika)_26 TOCPA_Japan_19 May 2016_Eng-Upgr

26th International Conference of the TOC Practitioners Alliance - TOCPA www.tocpractice.com

19-20 May 2016, Fukuoka, Japan

TOCによる競合の真似できない競争優位性の獲得

Competitive Edge that no competitors can imitate, gained by TOC 中川智加良 Chikara Nakagawa Taika Industry 19th May, 2016

中川智加良 Chikara Nakagawa 太華工業株式会社

専務取締役

2001年より⽇本アイ・ビー・エムの人事部門の勤務を経て、 2007年にステンレスのコイルセンター・研磨を主⼒事業とする太華工業株式会社入社。2013年より現職。 TOCに関しては、2011年よりジュントスの⽀援のもと、コイルセンター事業にSDBR、MTAを導入し、大きな成果を上げる。現在は、研磨事業においてもMTAを導入し、TOCの活用を通じてさらなる⾶躍を模索している。 Chikara Nakagawa is Managing Director of Taika Industry Co., Ltd, who had worked for HR Department of IBM Japan. In 2007, joined to Taika Industry, Coil Center business and Polishing Stainless Steel business. In 2011, he implemented SDBR and MTA into Coil Center business, with support from Juntos, and achieved great results.

[email protected]

Currently, he is working for implementing MTA into Polishing business as well, and seeking further growth through using TOC.

www.tocpractice.com

26th International Conference of the TOC Practitioners Alliance - TOCPA

2

Agenda Company and Business Overview SDBR Implementation – Background – Implementing MTO Injections 1-4 – Exploitation of Internal Constraint – Results

MTA Implementation – Background – Implementing MTA Injections – Results www.tocpractice.com


3

Company Overview

• Name: Taika Industry Co. Ltd. • Founded in 1957 • Head Office: Yayoi-cho 2-18, Shunan City, Yamaguchi • 2 plants in Japan • # of Employee: 153 people • Sales: 50 million Euro

www.tocpractice.com


4

Business Overview – Organization & Products Taika Industry

本社意匠鋼板部（南陽工場）ステンレス部（下松工場）構内業務部東京営業所

大阪営業所

Stainless Sheet Div. (Coil Center Business)

www.tocpractice.com

Design Steel Sheet Div. (Polishing Business)

On-site Work Service Div.


5

Supply Chain Overview

Distributer

Stainless Sheet Div. (Coil Center)

RM

Coil Shearing (CS)

User

Sheet Shearing (SS)

Design Steel Sheet Div. (Polishing)

Distributer Polishing

FG

User Other Supplier www.tocpractice.com


6

Coil Center Business – Manufacturing Process Distributer RM

Coil Shearing

Coil Shearing

CS

SS

User

FG

Design Steel Sheet Div.

Modes of Supply: Mainly MTO 20% of work orders are released by MTS for short delivery to specific customers Holding some FG stock because of minimum batch policy from quality aspects

Production Flow: “V” Type High TVC: % of the cost of raw material is >80% www.tocpractice.com


7




8

Implementation Scope

Distributer


RM

Coil Shearing (CS)

User

Sheet Shearing (SS)

Scope of implementation


Distributer Polishing

FG



9

Implementation Timeline 2010 10月月 Oct

11月月 Nov

2011 12月月 Dec

1月月 Jan

2月月 Feb

3月月 Mar

4月月 Apr

5月月 May

7月月 Jul

8月月 Aug

Design SDBR mechani cs/proce dures

Current Reality Study

Open Seminar Introduction to TOC (1day)

6月月 Jun

2012 9月月 Sep

10月月 Oct

11月月 Nov

12月月 Dec

2月月 Feb

Execute SDBR/ Implement BM

Management Workshop (1day)

2nd TOC Project Launched

SDBR Workshop (2days) Implementation Set-up Workshop (2days)

www.tocpractice.com

1月月 Jan


10

Background The Objective：： To become a business entity that can generate money continuously without being subject to economic/market conditions

• Market conditions of the stainless business: – Violent fluctuations of prices – Shrinking sales volume due to the stainless “bubble” and the financial crisis in 2008

• Our business strategy: – To increase sales of small sheet products – To respond to customer orders with small size, small lots and short delivery

However… as we got stuck in seeking for local efficiency, we could not meet market needs. www.tocpractice.com


11

Undesirable Effects In order to meet market needs, we have to improve our response time. However, in the reality… •

Uneven load (starvation and overload)

•

Raw materials are not always available when needed

•

Too much overtime of SS resources

•

Constant shift in priorities

•

Often do not have sufficient capacity to meet short delivery orders

•

There are too many items with slow moving inventory

– Often expediting happens – Negotiations between foremen happens – “Extra” set-ups are required

•

Shipping persons have many difficulties on dispatch – Negotiations with truck drivers

•

It takes too long time to make a production plan

www.tocpractice.com


12

Core Conflict Cloud

B

D

Take actions to decrease yield rate

Ensure flexible response to customers’ demand

(Ex. Accept orders with a short delivery time/small quantity)

C

D’

A

Manage production well

Control cost

www.tocpractice.com

Do not take actions to decrease yield rate


13

Direction of Solution WHAT to Change? Our primary concern is to improve local efficiency.

WHAT to Change TO? Improving Flow is our No.1 consideration.

Yield ratio is prime measures.

Production LT is prime measures

Each process has its own safety.

Each order has one Buffer.

Release raw materials as soon as possible. WO priority is set based on local due date.

Choke the release. WO priority is set based on Buffer status

WO – Work Order

www.tocpractice.com


14

Three Rules of SDBR Each customer order has its own Production Buffer (PB). Material release date is determined based on PB and Due Date. WOs are prioritized according to Buffer status. Production Buffer (PB) ＝ Production LT

Release Date

As time passes, Buffer changes its color from Green, Yellow, Red, to Black. WO priority is determined automatically according to the following color status: Black＞Red＞Yellow＞Green

Due Date

Early release is not allowed!

Production Buffer （**days）） Time

Release date is determined by the formula of DD minus PB

www.tocpractice.com

PB is prescribed elapse time given for a customer order


15

Initial Results, But… • MTO Injections 1-4 are implemented and therefore: •

•

The flow is improved. No excess WIP and reduced Production Lead Time (PLT) from 4.8 days to 1.5 days Open work orders (WOs) are controlled. The management monitors Length of Stay (LoS) and the number of Red and Black WOs

• The flow was improved. However, the following capacity problems (UDEs) still existed while there was no increase in sales at that moment: • •

Often do not have sufficient capacity to meet short delivery orders Too much overtime of SS (Sheet Shearing) resources

www.tocpractice.com


16

Observations • Revealed hidden excess (protective) capacity of the CS resources (as Non-CCR) while the SS resources had no excess capacity. • We can improve the flow by choking the release. But, it does not always bring higher productivity. •

Little’s Law: TP = WIP/CT

• We had given a quotation of delivery date with consideration for the available capacity of the production. Yet, the market wants for the company to meet standard lead time all the time.

www.tocpractice.com


17

Five Focusing Steps

1. Identify (choose) the system’s constraint 2. Decide how to exploit the system’s constraint

3. Subordinate everything else to the above decision 4. Elevate the system’s constraint 5. If the constraint is broken go back to step one but do not allow Inertia to cause the system’s constraint

www.tocpractice.com


18

Step 1 – Identify the Constraint Distributer RM

Coil Shearing

Coil Shearing

CS

SS

User

FG

Design Steel Sheet Div.

Capacity Constraint!

We saw that many Red work orders were piling up in front of SS work station. We have to investigate the situation.

www.tocpractice.com


19

Step 2 – Decide how to Exploit • Started implementation of MTO Injections 6-7 with the CCR – the operators of Sheet Shearing (SS) • The team conducted a work analysis for the CCR and found some activities that could be offloaded. 4% 10%

5%

7%

2%

19%

43%

Machine Set-up Roughing Cut Cut Process Material Preparation Packing Shipping Material post-preparation Other

10%

www.tocpractice.com


20

Step 2 – Decide how to Exploit • The production had stock of fixed-scale items in front of SS that was directly shipped to customers (as finished goods) and also served to SS as a material. • These stock items were produced by MTS work orders. Stock of fixed-scale items

Distributer

RM

www.tocpractice.com

CS

SS


User

21

Step 2 – Decide how to Exploit

Suggested way

Current way

• The team suggested the following idea with the aim of exploiting the capacity of the CCR (SS).

www.tocpractice.com

MTS WO

MTO WO

CS

SS Roughing Cut

Fixed-scale Cut

Cut Process

MTO WO

CS Case-by-case Cut

SS Roughing Cut

Cut Process


22

Yes, BUT…

SS’s capacity will be ensured IF… Load on CS will be increased

CS will be overloaded!

is implemented…

FG stock of Fixed-scale items will be redundant

FG stock of Fixed-scale items will be reduced

Yield rate will be decreased!

Our responsiveness for short delivery times will go down! www.tocpractice.com


23

Trimming NBRs CS has excess capacity. AND SS’s capacity will be ensured Mechanics to monitor the load/ CS’s capacity is in place

IF…

Load on CS will be increased is implemented…

FG stock of Fixed-scale items will be redundant

CS will be overloaded!

Mindset: Flow is no.1 consideration FG stock of Fixed-scale items will be reduced

Yield rate will be decreased!

Production LT is reduced significantly Our responsiveness for short delivery times will go down! www.tocpractice.com


24

Step 3 – Subordinate to Decision • We decided to stop placing MTS work orders for building FG stock of fixed-scale items.

• Resources of CS have enough protective capacity. But, the suggested idea demands load increase on them.

• When exploiting the capacity of a CCR, we need to ensure enough protective capacity of Non-CCRs.

• Therefore, in order to fully focus on the internal constraint, we have to monitor and manage the load on Non-CCRs to prevent them from being overloaded.

www.tocpractice.com


25

Monitoring the Load

www.tocpractice.com


26

Results – Inventory Reduction

FG WIP Total Injection 1-4

Injection 6-7

8月 9月 10月 11月 12月 1月 2月 3月 4月 5月 6月 7月 8月 9月 10月 11月 12月 1月 2月 3月 4月 5月 6月

2011

www.tocpractice.com

2012


2013

27

Results – Overtime Reduction

www.tocpractice.com


28




29

Implementation Scope

Distributer


RM

Coil Shearing (CS)

User

Sheet Shearing (SS)


Distributer

Scope of implementation SFG

Polishing

FG



30

Why MTA? • The improved performance of the production is recognized by the market, and it led to receiving more customer orders.

• However, the increased demand started to cause the CS resources to become CCR. • Design Steel Sheet Div. gave purchase orders (POs) to Stainless Sheet Div., and hence semi-finished products were supplied by MTO. • Due to the fact that our supply lead time was longer than customer’s tolerance time, most POs were placed by using a forecast. • Consequently, Design Steel Sheet Div. had both shortages and excess of semi-finished, and it caused urgent orders killing CS resources’ capacity of Stainless Sheet Div.. www.tocpractice.com


31

Implementation Timeline 2013 8月月 Aug

9月月 Sep

10月月 Oct

2014 11月月 Nov

12月月 Dec

1月月 Jan

2月月 Feb

Prepare MTA • Select MTA items • Set Target Levels • Develop procedure of releasing WO • IT file developed • Explain to people

CRS (1 day) Management Workshop (2 days) www.tocpractice.com

MTA Training Workshop (2 days x 2)

3月月 Mar MTA Pilot/ Roll-out • Replenish to consumption • Exception mgmt • Add MTA items • Execute DBM • Monitor results

10 weeks


32

Direction of Solution WHAT to Change? Holding stock at SFWH* is BAD. Availability of purchased stock is under responsibility of purchaser.

Produce to forecast Produce to order according to PO that is based on sales forecast.

No clear or common way of changing stock levels

WHAT to Change TO? Hold enough stock at SFWH and establish it as regulator of replenishment system Supply link should manage availability of stock at next link.

Replenish to consumption Consumption from SFWH triggers production. WO priority is set according to Buffer status.

Dynamic Buffer Management ▪ Adjust to the trend.

SFWH – Semi-finished goods Warehouse

www.tocpractice.com


33

Three Rules of MTA

RULE 1: Establish SFWH as regulator of replenishment system Build Stock Buffer and commit to Availability

RULE 2: Replenish to consumption Get daily consumption and release WO based on Buffer status

RULE 3: Dynamic Buffer Management Adjust Buffer size to significant changes of demand and supply

www.tocpractice.com


34

MTA Rule 1: Stock Buffer •

Stock Buffer (Target Level) is set per every SKU-location. Stock Buffer defines the TOTAL AMOUNT of stock to be hold in the replenishment system and includes stock in the three stages: – On Hand in the stock (warehouse) – On The Way from upstream – To Be Ordered – stock that has been consumed but has been transformed yet into replenishment order yet

Stock Buffer is drawn as a bucket divided into three parts. The top part – Green, the middle – Yellow, and the bottom part – Red. Replenishment System 0-33% penetration 34-66% penetration On-hand

67-99% penetration WO

WO

WO

WO

WO

Production www.tocpractice.com


Warehouse 35

MTA Rule 2: Replenishment to Consumption WO released according to production plan based on forecast Production is subject to demand

WO release

Raw Materials

fluctuation. Production

Downstream

Requests for WOs are based on sales forecast.

Requests for WOs

Demand

Production does not need to monitor on-hand status at WH.

Get daily consumption and release WO for replenish to WH Replenish

WO release

Raw Materials

Consumption

Production is “decoupled” from demand fluctuation.

Production

Requests for WOs

www.tocpractice.com

Requests for WOs are based on WH

Downstream

consumption report. Production has responsibility to

Demand

monitor on-hand status at WH.


36

MTA Rule 3: Dynamic Buffer Mgmt 60 50 40

Target Level

30

Reduce by 1/3

20 10 0 1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

3

4

5

6

7

8

9

10

11

12

13

14

15

手持在庫

Green = Too much stock Yellow = Adequate stock

80

Red = Too little stock

70 60 50

Increase by 1/3

40 30 20 10 0 -10

www.tocpractice.com

1

2

26th International Conference of 手持在庫 the TOC Practitioners Alliance - TOCPA

37

Results •

Achieved the following results after 2 months of implementation： – Had kept 100% of Availability at SFG warehouse. – Reduced SFG inventory from 30 days to 18 days (40%↓) – Reduced urgent orders at Stainless Sheet Div.

www.tocpractice.com


38

Results – SFG Inventory Reduction

www.tocpractice.com


39

Our Competitiveness • Against common sense of the stainless coil center: – In our industry of the stainless coil center business, most people have strong mind of “improving a yield ratio of CS machines is THE ONLY way to generate profit”. But, we are opposite. We are doing a seemingly contradictory initiative.

• Unique market segment where major competitors can not enter: – The bigger competitors, the greater mind of “improving a yield ratio of CS machines is THE ONLY way to generate profit”. As these competitors don’t want to sell the small sheet products that jeopardize a yield ratio of CS machines, we can get all the demands for these products.

As a result – we became a business entity that can generate money continuously without being subject to economic/market conditions. www.tocpractice.com


40

6 - Chikara Nakagawa(Taika)_26 TOCPA_Japan_19 May 2016_Eng-Upgr

Recommend Documents