23rd International Conference of the TOC Practitioners Alliance - TOCPA www.tocpractice.com
21-22 March, 2016, Tennessee, USA
Sharing experience on step 2 Decide how to exploit the system's constraint
Emanuele Strada Thinking-Solutons, Italy March, 2016
Emanuele Strada Emanuele Strada is a thought leader on business process transformation at Thinking Solutions. He is an expert in supply chain re-engineering and dynamic process modelling with over 20 years’ experience. He has worked for some of the top manufacturing companies in the world - setting corporate strategy, holding various senior positions with a focus on reengineering and creating systems and structures to deliver substantial improvements in companies. Emanuele is a well-respected expert in leading business change. He has proven capabilities in managing complex turnaround projects at an international level and has earned many awards for them.
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
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Agenda
• the challenge • customer expectations • gap analysis • key learning
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
The challenge
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…“If we don’t improve the process performance, our production line* will become very soon “the constraint” due to the agreed growing sales contract”
* the biggest project in the world in automotive industries for this material type
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
The customer expectations
• • • • • • • • • • • •
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100% up-to-schedule shipping performance Zero off-lines or production losses due to supplier failure 100% quality parts; zero shipping discrepancies Manufacturing flexibility for unexpected plant shortages/requirements Error-proof processes Daily shipments Accurate packaging and execution Electronic communication capability and execution Advance problem notification and quick resolution Internal training procedure/process No supplier constraints …
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
At least the “what” is clear…
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…today, the process performance is far below the expectations
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
…a step back: gap analysis
Casting Ops
CONSTRAINT
Milling Ops
cont.line
Downstream Ops & Distribution
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CUSTOMER Ops
1. IDENTIFY the system's constraint(s).
2. Decide how to EXPLOIT the system's constraint(s). 3. SUBORDINATE everything else to the above decision. 4. ELEVATE the system's constraint(s). 5. WARNING!!!! If in the previous steps a constraint has been broken, go back to step 1, but do not allow INERTIA to cause a system's constraint www.tocpractice.com
23rd International Conference of the TOC Practitioners Alliance - TOCPA
From SKUs to Coils
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Customer production Plan
BOM SKUs requirement
Coils requirement CONSTRAINT Coil
Demand INPUT
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
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Yes… BUT
Casting Ops
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Milling Ops
CONSTRAINT cont.line
Downstream Ops & Distribution
CUSTOMER Ops
23rd International Conference of the TOC Practitioners Alliance - TOCPA
From SKUs to Mother Coil
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Customer production Plan
BOM SKUs requirement SKU 0001
SKU 0002
Marriage logic Coils requirement CONSTRAINT Mother Coil
SKU n
SKU m
1 *First challenge: INPUT UNITS @ the CONSTRAINT
Demand INPUT
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
INPUT UNIT of the CONSTRAINT
Casting Ops
Milling Ops
CONSTRAINT cont.line
Downstream Ops & Distribution
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CUSTOMER Ops
Coils
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
INPUT UNIT of the CONSTRAINT
Casting Ops
Milling Ops
CONSTRAINT cont.line
Downstream Ops & Distribution
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CUSTOMER Ops
Mother Coils
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
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The challenge #2 CONTRAINT input • SKU 1
2
Mother Coil X
• SKU 2 • SKU n
*
• SKU a • SKU b • SKU z
*
• SKU j • SKU K
Mother Coil Y
1
1
*Second challenge: Mother Coils Sequencing @ the CONSTRAINT
Mother Coil Z
1
(technical limitations & real downstream NOT equalized needed quantity)
Marriage logic www.tocpractice.com
23rd International Conference of the TOC Practitioners Alliance - TOCPA
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The challenge #3
Mother Coil X
*
Mother Coil Y
2
• SKU 1 • SKU 2 • SKU n
1
• SKU a • SKU b • SKU z
1
*Second challenge: Mother Coils Sequencing @ the CONSTRAINT
1
*
Mother Coil Z
(technical limitations & real downstream NOT equalized needed quantity)
>1 Mio of vehicles / year & www.tocpractice.com
• SKU j • SKU K
**
**
** 3
**Third challenge: Potential different FGs quantity and SKUs type Marriage logic due to different customer >100 SKUs per vehicle production plan 23rd International Conference of the TOC Practitioners Alliance - TOCPA
INPUT UNIT of the CONSTRAINT
Casting Ops
Milling Ops
CONSTRAINT cont.line
Downstream Ops & Distribution
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CUSTOMER Ops
Mother Coils
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
Local optimal and constraint
Output
Input CONSTRAINT D
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cont.line
D
Dummy Coil ?
NO
YES
D • SCRAP • CAPACITY LOST
Several Coil types: • Alloy • Temper • Thickness • Width • pre-treatment • etc…
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
Local optimal and constraint
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Output
Input CONSTRAINT cont.line
Dummy Coil ?
YES
NO
Several Coil types: • Alloy • Temper • Thickness • Width • pre-treatment • etc…
Are we really exploiting the constraint ?
Requested Coil ?
YES
NO
• NON PRODUCTIVE CAPACITY
REAL THROUGHPUT www.tocpractice.com
23rd International Conference of the TOC Practitioners Alliance - TOCPA
Easy questions…
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• How to exploit the constraint ? • How to prove robustness of the solution… • How to reduce the risk of implementation failure ?
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
Easy questions…
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• What is the batch size logic? • How many SKUs should we consider in our marriage logic? • What is the “best” SKUs sequence to consider, not for local optimal, but for the entire system ?
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
The best sequence
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• What is “best” ? • How can we describe it ? • Ideally every single coil that need to be produced should be part of this definition, and every single coil that is not needed for the production plan of the customer in a short term, should not be considered.
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
The best sequence
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• Is it correct? • Ok, but… what about the technical limitations by which the dummy coil is needed? • …and what does it mean “short term”?
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
Here we are… the FLOW !
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Normal flow speed
Looking forward Normal (right) flow speed
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
The dynamic process model
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
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Project Outcome
<4% TARGET 95%
*Dummy Coils
*Dummy Coils
50%
50%
ACHIEVED >96%
Good coils
AS-IS 50%
Good Coils
>96% Good Coils
50%
50%
Before
After
*Dummy Coil: coil needed by the continuous line but not needed by the downstream operations
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23rd International Conference of the TOC Practitioners Alliance - TOCPA
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Key learning
Dynamic Process Modelling can support you not only to Identify the system constraint, but also to exploit it meanwhile validate your assumptions for a robust solution How ? …you can simulate the material and decision flow considering the resources dependencies coupled with statistical fluctuation www.tocpractice.com
23rd International Conference of the TOC Practitioners Alliance - TOCPA
Emanuele Strada Emanuele Strada is a thought leader on business process transformation at Thinking Solutions. He is an expert in supply chain re-engineering and dynamic process modelling with over 20 years’ experience. He has worked for some of the top manufacturing companies in the world - setting corporate strategy, holding various senior positions with a focus on reengineering and creating systems and structures to deliver substantial improvements in companies. Emanuele is a well-respected expert in leading business change. He has proven capabilities in managing complex turnaround projects at an international level and has earned many awards for them.
Your logo
Place for the photo of the presenter
[email protected]
Thanks for your time. www.tocpractice.com
23rd International Conference of the TOC Practitioners Alliance - TOCPA
