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.

www.tocpractice.com

Your logo

Place for the photo of the

presenter

emanuele.strada@thinking-solutions.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

Your logo

Agenda

the challenge
customer expectations
gap analysis
key learning

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

The challenge

Your logo

If we dont 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

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

The customer expectations

Your logo

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

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

At least the what is clear

Your logo

today, the process performance

is far below the expectations

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

a step back: gap analysis

Casting
Ops

CONSTRAINT

Milling
Ops

cont.line

Downstream
Ops &
Distribution

Your logo

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

Your logo

Customer production Plan

BOM
SKUs requirement

Coils requirement
CONSTRAINT
Coil

Demand
INPUT

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

Your logo

Yes BUT

Casting
Ops

www.tocpractice.com

Milling
Ops

CONSTRAINT
cont.line

Downstream
Ops &
Distribution

CUSTOMER
Ops

23rd International Conference of the TOC Practitioners Alliance - TOCPA

From SKUs to Mother Coil

Your logo

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

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

INPUT UNIT of the CONSTRAINT

Casting
Ops

Milling
Ops

CONSTRAINT
cont.line

Downstream
Ops &
Distribution

Your logo

CUSTOMER
Ops

Coils

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

INPUT UNIT of the CONSTRAINT

Casting
Ops

Milling
Ops

CONSTRAINT
cont.line

Downstream
Ops &
Distribution

Your logo

CUSTOMER
Ops

Mother
Coils

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

Your logo

The challenge #2
CONTRAINT
input
SKU 1

Mother Coil X

SKU 2
SKU n

SKU a
SKU b
SKU z

SKU j
SKU K

Mother Coil Y

*Second challenge:
Mother Coils
Sequencing @ the
CONSTRAINT

Mother Coil Z

(technical limitations
& real downstream NOT
equalized needed quantity)

Marriage logic
www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

Your logo

The challenge #3

Mother Coil X

Mother Coil Y

SKU 1
SKU 2
SKU n

SKU a
SKU b
SKU z

*Second challenge:
Mother Coils
Sequencing @ the
CONSTRAINT

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

Your logo

CUSTOMER
Ops

Mother
Coils

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

Local optimal and constraint

Output

Input
CONSTRAINT
D

Your logo

cont.line

Dummy
Coil ?

NO

YES

D
SCRAP
CAPACITY LOST

Several Coil types:

Alloy
Temper
Thickness
Width
pre-treatment
etc

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

Local optimal and constraint

Your logo

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

Your logo

How to exploit the constraint ?

How to prove robustness of the solution
How to reduce the risk of implementation
failure ?

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

Easy questions

Your logo

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 ?

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

The best sequence

Your logo

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.

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

The best sequence

Your logo

Is it correct?
Ok, but what about the technical limitations
by which the dummy coil is needed?
and what does it mean short term?

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

Here we are the FLOW !

Your logo

Normal flow speed

Looking forward
Normal (right) flow speed

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

The dynamic process model

www.tocpractice.com

Your logo

23rd International Conference of the TOC Practitioners Alliance - TOCPA

Your logo

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

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA

Your logo

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

emanuele.strada@thinking-solutions.com

Thanks for your time.

www.tocpractice.com

23rd International Conference of the TOC Practitioners Alliance - TOCPA