5 - Junichi Sato (YAMAHA) - 26 TOCPA - Japan - 19 May 2016 - Eng

26th International Conference of the
TOC Practitioners Alliance - TOCPA

www.tocpractice.com
19-20 May 2016, Fukuoka, Japan
TOC
- (MTO)(MTA)
Using TOC Replenishment to transform production from MTO to MTA
/
19 th May, 2016

Junichi Sato
1991
2008
2012
Junichi Sato is the project leader of Logistics reforming project of YAMAHA

KUMAMOTO PRODUCTS Co., Ltd.
He joined YAMAHA in 1991, and was engaged in Production Planning and IT. He was
involved in SAP implementation at that time.
Junichi_Sato@y-k-p.co.jp
In 2008, he became a manager and integrated Production Planning and IT

departments for the sake of improving production performance through making full use
of IT.
In 2012, he was in charge of Management Planning for achieving the companys vision
and strategy of creating a unique production system that any competitors cant do. For
that, he conducted MTA Implementation in 2013.
He is currently preparing for the next challenge DTA implementation.
www.tocpractice.com
26th International Conference of the TOC Practitioners Alliance - TOCPA
Overview
Overview
Overview
YAMAHA Kumamoto Products (YKP) is a manufacturing sister company of YAMAHA Motorcycle
produces marine engines and supply them to 180 countries.
Even through their products are supplied to the distribution chain, YKP run under the MTO mode of
operation and made the master production schedule driven by assembly.
Part production had a lot of chronic problems, such as lack of capacity and mis-synchronization with
subcontractors.
For solving these problems, YKP started the MTIA Make to Internal Availability Pilot implementation in
February 2013. In 2-3 months, YKP saw that the production lead time was reduced significantly while
increasing productivity. Management decided to move to the full execution.
Since then, YKP developed their own IT tool for MTIA and started the preparation for expanding the
implementation to the distribution.
Features of this presentation

presentation
BottomBottom-up implementation
Transform from MTO to MTA
WinWin-Win relationship with subcontractors
Usage of Thinking Processes before and during implementation
www.tocpractice.com
Agenda
Company Profile
Background
Consensus
Starting Pilot Project

Inherent Simplicity
Conceptual Change from MTO to MTA

Collaboration with Subcontractors
Win-Win
Obstacles & Solutions
Respect
Results
For Full Rollout Develop IT System
Future Plan
Lessons Learned
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Company Profile
YAMAHA Motorcycle
Outboard Motors
YAMAHA
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Company Profile
Yatsushiro, Kumamoto, Japan
Name
Established
November 1998
Capital
490 Million yen
Employee
Business
Igusa
YAMAHA Kumamoto Products
Sales
556
Manufacturer of Marine Engines
21,800 Million yen
Banpeiyu
www.tocpractice.com
Business & Supply Chain

Casting
Smoothing
Machining
Painting
Assembly
Shipping
Chartering
RWH
Distributer
Stock
Stock
Stock
Purchasing
YAMAHA Kumamoto
To 180 countries
www.tocpractice.com
Manufacturing Process
RM
122 SKUs
Casting
Two Subcontractors work in our

plant - Outsourcing
Smoothing
Dependent Set-up
Long set-up time(3-10H)
Multiple CCRs
Machining
PI
390 SKUs
Common Parts 100 SKUs
5,500 SKUs
Painting
Assembly
425 SKUs
Packing
445 SKUs
Ship
www.tocpractice.com
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
www.tocpractice.com
Why TOC?
Tops dream
To become a true Coherent plant based on link management technique

SCM slogan
Synchronize Production and Sales by integrating physical process flow, information flow and
managerial flow
What is Coherent Plant?
Can we change the way of
Part Production?
Coherent Plant
Nimble & Strong Chain
Inventory is
Enemy?
Whats wrong with inventory?
By reducing LT, we will achieve:
Implementing APS
Is it ??
Backward scheduling
But Murphy in execution
OE reduced
Demand satisfied
Stabilized & Rapid
Flow
Increase Efficiency
Same Demands?
We have focused on higher DDP for HQ
But the need of customer in US is
same as in Indonesia?
www.tocpractice.com
Reduce Inventory
10
UDEs & Core Problem in

Parts Production
There is too much overtime in part production
There are too many items that have excess stock in front of assembly
Too much efforts and negotiations required to make a production plan
Many Improvement initiatives dont provide expected results
B
Control cost
D
Stick to the plan
that was set
or officially updated
A
Manage well
C
Meet assembly schedule
www.tocpractice.com
D
Take expensive
corrective actions to
add capacity
11
Suggested Solution
Make to Internal Availability
Build enough Stock Buffer at SFWH, and replenish based on consumption from it
Purchased
Item
PTA
Procure
ment
Replenish
Consume
MTIA
X4
X180
countries
Casting
Smoothing
M/C
SFWH
Paint
Assy
Pack
Dock
WH
SFWH
Request
Press
fitting
PTA
RWH
Procure
ment
Pack
RM
Dealers
Areas for applying MTIA and places

for building Stock Buffers
SFWH Semi-Finished Goods Warehouse
PTA Purchase to Availability
www.tocpractice.com
Parts
Center
CKD
Complete Knock-Down
12
Getting Buy-in from Top Mgmt

Identified the Core Problem and
Direction of the Solution. But
4 Gates to overcome
Many Obstacles
Inventory will increase!!

Go back to the old days
Gate3
Twice
Technology
Management
Its not equipment

investment
Gate1
7 times
Production
Gate2
3 times
Its not IT system

implementation
Gate4
Business
Planning
HQ havent
implemented
PPC
Production
Is it
magic stick?
Use Transition Tree (TrT) to plan my actions
www.tocpractice.com
13
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
www.tocpractice.com
14
Timeline
2012
Jan
Feb
Mar
Apr
May
Information
Gathering
Jun
Jul
2013
Aug
Consensus
Building
Sep
Oct
CRS &
Solution
Design
Nov
Dec
Getting
Buy-in
by Juntos
Jan
Feb
Pilot
Prepar
ation
Mar
Apr
May
Jun
Pilot
Execution
Joining MT Club* Mastering TP skills
Management Tools Program

Program
TOC-TP Training Course
Management WS
WS
Solution Offer to Director
Implementation SetSet-up WS
WS
Knowledge Transfer to Core Team
Decision made
for RollRoll-out
MT Club MT1
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15
Project Team
Steering Committee
Keita Asaine
Junichi Sato
Ryoma Shiratsuchi
Core Team
PSNC
Katsuyuki Utsunomiya
Ken Sugimura
IT team
,
Operation team
PPC
Production, Casting
Prod Mgrs, Supervisors
Production, Smoothing

Production, Machining
Prod Mgrs, Supervisors
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16
MTA Game
Effectively transferred MTA knowledge
with a
smile
Developing new planning procedure

Conflict on how to use APS
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17
Preparing Pilot
1. Select controllable number of SKUs that
will participate in the Pilot
100 items
MTIA
Propeller line 93 items
MTIA
MTIA
MTIA DIOH
Crank line 10 items
2. Determine RRT Reliable Replenishment

Time per SKU and set Target Levels
3. Develop procedures for planning
replenishment
4. Develop two types of Excel files
SKU file
WO file
5. Explain to Gemba for supervisors &

production managers
SKU ID
JB8
JB9
SC1
30
6.0
80.0%
3.0
63
20.0
68.3%
2.5
9
0.0
100.0%
6.6
Name
Line
Type
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
JB8
MTIA
68S4594200YY80
68S-11
68U4594200YY80
68U-9
68V4594200YY80
68V-17
68V4594400YY80
68V-19
69G4594200YY80
69G-5-3/4
69G4594400YY80
69G-7
69W4594400YY80
69W-15
69W4594600YY80
69W-13
69W4594800YY80
69W-11
10
69W4595300YY80
69W-12
11
69W4595900YY80
69W-14
12
6E54594200YY80
6E5-19
13
6E54594400YY80
6E5-21
14
6E54594601YY80
6E5-17
15
6E54594800YY80
6E5-15
16
6E54595100YY80
6E5-13
17
6E54595300YY80
6E5-23
18
6E54595500YY80
6E5-11
19
6E54595700YY80
6E5-25
20
6E54595900YY80
6E5-14
21
6G54594200YY80
6G5-15
22
6G54594401YY80
6G5-21
23
6G54594601YY80
6G5-19
24
6G54594801YY80
6G5-17
25
6G54595100YY80
6G5-23
26
6G54595300YY80
6G5-16
27
6G84594800YY80
6G8-9-1/4
28
6J84594210YY80
6J8-8-1/4
29
6K14594600YY80
6K1-19
30
6K14594800YY80
6K1-17
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
MTIA
(TL)
414
244
49
36
414
3,618
515
2,274
1,343
1,872
278
966
323
1,801
3,709
1,156
40
618
3
423
481
65
472
552
19
99
251
76
87
97
(OH)
10
8
5
2
11
50
37
613
592
48
62
86
352
181
67
28
3
21
4
19
15
6
15
13
6
11
20
7
13
14
WO
(WIP)
98%
97%
90%
94%
97%
99%
93%
73%
56%
97%
78%
91%
-9%
90%
98%
98%
93%
97%
-33%
96%
97%
91%
97%
98%
68%
89%
92%
91%
85%
86%

(on request)
(in)
(out)
428
254
111
168
434
3,618
527
1,584
848
1,831
507
647
446
1,620
3,445
1,154
66
612
35
579
487
109
541
680
60
95
264
127
96
102
-24
-18
-67
-134
-31
-50
-49
77
-97
-7
-291
233
-475
0
197
-26
-29
-15
-36
-175
-21
-50
-84
-141
-47
-7
-33
-58
-22
-19
SKU File
www.tocpractice.com
18
0
0
0
0
0
0
0
0
0
0
0
96
0
0
480
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
12
143
150
0
0
350
0
58
134
21
0
2
0
0
0
0
0
124
0
0
0
0
0
0
DIOH
17
5
3
3
3
32
5
144
114
106
18
45
3
58
114
54
0
14
0
13
6
2
9
8
0
1
4
0
2
1
0.6
1.8
1.7
0.6
3.9
1.6
7.5
4.3
5.2
0.5
3.4
1.9
136.9
3.1
0.6
0.5
10.5
1.5
0.0
1.4
2.4
3.5
1.7
1.7
63.0
7.5
5.5
21.0
7.0
12.8
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
www.tocpractice.com
19
Previous Way of Managing Production

Due Date
Due Date
Due Date
Due Date
Due Date
Casting
Smoothing
Machining
Painting
Assembly
WO Release
WO Release
WO Release
WO Release
WO Release
Scheduler
IT system
Planning
PPC negotiate
with Production
Scheduler
Leave to
Outsourcing
PPC Negotiate
with Production
Leave to
Production
Automatic Planning
Physical Flow
Its not Coherent Plant!
Each process makes a plan based on local optima.

Too much WIP leads to longer Production lead time.
www.tocpractice.com
20
Direction of Solution
WHAT to Change?
Stock area in front of assembly is
not Warehouse, but Yard
TO WHAT to Change?
Establishing SFWH as Regulator of
Replenishment System
Reducing inventory at any place is a
Build Stock Buffer and commit to
major consideration
availability at SFWH
Replenish to Consumption
Produce to Assembly Schedule
Determine WO quantity with
WO quantity is influenced by
consideration of difference in
assembly schedule
capacity from assembly
Fixed Schedule
Flexible Schedule through Buffer

Management
Production plan is made fortnightly

Frequently plan when to release WO
Every process has local due date
according to buffer status
WO Work Order
www.tocpractice.com
21
MTIA Rule 1:
Establishing SFWH as Regulator of
Replenishment System
Produced stock is Pushed to downstream
Stock after machining is treated as WIP
Manage stock per process
Smoothing
Casting
Machining
Paint/
Assembly
Focus on reducing inventory (Inventories

are all Enemy)
Supply to SFWH No Push

Stock after machining is strategically
treated as onon-hand stock at SFWH
On the Way
OnOnhand
Paint/
Assembly
Set Target Level per SKU (Stock Buffer)

and manage stock in the whole processes
Focus on ensuring Availability at SFWH
SFWH
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22
MTIA Rule 2:
Replenishment to Consumption
Current way: Local PULL
PULLEventually PUSH
PUSH
Assembly schedule is DRUM
Casting
Smoothing
Machining
Assembly
WO quantity is planned in conjunction

with assembly schedule
We can not plan for preceding process
without determining the plan for postpostprocess
MTIA way: Global PULL

Replenish
Part Production
Request
Consumption
SFWH
Assembly
Demand
Consumption from SFWH is DRUM

WO quantity is planned with
consideration of difference in capacity
from assembly
All processes in part production are
integrated

www.tocpractice.com
23
MTIA Rule 3:
Buffer Management
SFWH
On-hand
Stock
Replenishment
WO
No.1 Priority
Recovery
Actions
WO
Getting
Orders
After RED WOs

WO Priority
WO
To Assembly
After YELLOW WOs

WO
Not allowed to
release WO
Performance
Measurement
BM Meeting
Daily check the progress
of Black/Red WO and
decide recovery actions
when needed
MTA Measurement Report

Availability
Measure the level of no
stock-out
DIOH
Measure the level of

no-excess stock
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24
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
www.tocpractice.com
25
Seek for Collaboration

with Subcontractors
Listened to the subcontractors voice to understand their reality
Interview with GM
Offer the solution(MTIA)
YKP puts pressure to reduce lead time,

But in reality, there are many shortages
Too many reworks
due to castings defective
eating our capacity
We dont understand
what is coherent plant
Explain future vision and business needs

to secure Japanese production way by
coherent plant
Explain MTIA by our own words
Stock Buffer, Replenishment, Priority
To understand the image of the new way
As the result that:

The GM approved to add capacity temporarily to build stock buffer without hesitation.
GMs comments:
I understood that the MTIA could help us.
We didnt see any significant risk because of the careful approach by the pilot instead of full execution
MTIA has a robust mechanism so that we are all aligned through the synchronized tool & measurements
www.tocpractice.com
26
Synchronized Local Actions

in Information/Decision Flow
Before
Planning
After
Integrated part production for sharing plan and execution
Machining
How is the current

consumption rate
PPC
Availability &
DBM
Any problem
DIOH on setting
target level?
Machining
WO File
Planning
Smoothing
Daily Consumption
This sequence of
WOs is suitable
for everyone
Estimated
required APS
resources
Outsourcing
Going to delay
due to Murphy
Planning
Casting
Casting
Machining
Tools
PPC
Outsourcing
PPC
www.tocpractice.com
Casting
27
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
www.tocpractice.com
28
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
www.tocpractice.com
29
Results:
Availability and DIOH
Propeller
Availability
Building enough
on-hand stock
93 SKUs
Availability 72% 82%
Availability (# of SKUs with DIOH <1d)/93 SKUs
DIOH
3.1d 4.3d
DIOH Days Inventory On-hand
30
www.tocpractice.com
Results:
Availability and DIOH
Crank
Availability
Ensured
availability of RM
8 SKUs
Availability 92% 92%
Availability (# of SKUs with DIOH <2d)/8 SKUs
DIOH
6.7d 8.1d
DIOH Days Inventory
On-hand
31
www.tocpractice.com
Results:
Production lead time
Propeller
Crank
20
12
1 7 .6
18
1 0 .2
10
16
14
7 .5
1 2 .7
12
1 0 .6
6 .1
6
10
9 .2
8
6 .4
4
3 .8
6
4
0
0
PLT
www.tocpractice.com
PLT
17.6 MTIA 6.4
10.2 MTIA 3.8 d
65%
Reduction
th
63% Reduction
26 International Conference of the TOC Practitioners Alliance - TOCPA
32
WIP was vanished

Before
Post-heating Machining
After
Pre-heating Machining
Post-heating Machining
To yard
WIP
Line B
Pre-heating Machining
Line A
Line B
Line A
Supply from yard

Production plan was determined by post-process. Line
A had to hold stock due to lack of capacity.
Better resource assignment

Before
No pressure to balance capacity stock after Line A

goes to directory to Line B.
After
One person assigned for Line C and Line D. Ad-hoc
Easy to assign resources as WO priority is clear
Line C
Line C
Line D
Line D
WO1 WO2 WO3
WO1 WO2 WO3
Which line should I work for?

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Color status gives clear priority

Resources are allocated with concentrated
33
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34
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
www.tocpractice.com
35
For rollout, we need to: Reflect the daily actual information on Buffer status
But, If we continue to use Excel as with the Pilot, it will cause significant difficulties on
daily updates because of the following reasons:
Issue 1: Partial delivery to next operation requires to split WO.

Casting Smoothing Machining
WO1 100 units
WO1-1 70 units
WO completed partially
70 units
WO1-2 30 units
Split WO
WO2 20 units
WO2 120 units
WO3 90 units
WO3 90 units
Issue 2: Castings defective is often found in post-operation.

WO1 100 units
WO1 70 units
30 units
defective
WO2 120 units
WO2 120 units

WO3 90 units
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WO3 90 units
Generate
WO
WO4 30 units
36
Reduce WIP & Concentrate resources

Disruption
Plan
Actual
Design
Design
Design
Coding
Coding
Coding
FREEZE
Test
Test
Test
Disruption
IT team was in Bad Multitasking.

Task duration became longer and longer. We
couldnt see when to complete
Important call:
What help can I do for you?
By pair work, design considered in depth

<10 min meeting to ask remaining duration
Fast issue resolution outside the meeting
With the results that:

Tasks were completed one by one, and toward
completion with good quality
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37
MTIA Support IT Tool

Main Menu
Master registration Screen
Screen
Load Check
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38
Roll-out Results:
Production lead time
18 9
8.6
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39
Roll-out Results:
Availability
70% 90%
95
5keep
300
263
251
263 98
250
227
220
195
200
183
156
150
136
150
124
114
100
98
87
71
90
80
71
57
75
50
60
41
50
26
16
0
1
2013
www.tocpractice.com
2014
2013
10
11
12
2014
40
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
www.tocpractice.com
41
Next Steps Synchronized

Production and Sales with MTA/DTA
Casting
Smoothing
Machining
Assembly
Dock
RWH
X4
Too many inventory

at Dock
Plant is suffering from

lack of capacity
Why
Currently, Dock is NOT warehouse !
Very long current Replenishment Time
Phase 3
Phase 2
Phase 1
MTIA Make to Internal Availability
MTA Make to Availability
DTA Distribute to Availability

RWH
RWH
Part Production
SFWH
Assy
CWH
RWH
RWH
Synchronize the Plant and the

Downstream Chain
www.tocpractice.com
New Replenishment Time

CWH Central Warehouse
26th International Conference of the TOC Practitioners Alliance - TOCPARWH Regional42
Warehouse
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
www.tocpractice.com
43
Lessons Learned
With my own words
It makes no sense to read aloud the material.
Understanding the logic of solution and gaining confidence give people security.
Resistance? Welcome!
Resistance to change is the first step to achieving goal. We should investigate the
reason behind their response and prove into the identity of the fear.
My mind is sending
If I tell the objective/reason with the mind of respect, then people will accept.
Focus
The key success factor is focusing instead of trying to do too much.
TOC Full-kit
I realized the power of TOC through not only replenishment solution but also MT and
CCPM. I am excited to expand the implementation DTA for distribution and CCPM
for engineering. I believe that TOC Full-kit will guide my company to the right direction.
www.tocpractice.com
44
An implementation methodology for overcoming difficulties against the goal:
Make
ones Needs
more approachable
Trigger for Needs
Objective Data
makes an impact on
the people
Possible Data
Gembas Reality
tells a full story
To be Proven
Buy-in on
Solution(MTIA)
Top managements
words
DIOH per SKU
Dilemma between
inventory and set-up
Pilot Execution
Fear for the unknown
Stock simulation
PLT
Gembas voice
Subcontractors
Gap between requirement Shortages

and recognition
Rework
CCPM
Multi-tasking
www.tocpractice.com
Completion rate
Quality(rework)
Reduced overtime
Space created
Communication
Greetings
45
Outcome
Effective Approach for

Problem Solving
Strong Relationship between

TOC Standard Solutions and MT
Because of MT (Management Tools), I could implement a solution.
/
UDE/ Cloud
NBR
IO Map
TrT
MT Basics
U-Shape, C&E, CLR
3 TOC DNAs
Convergence WinWin Respect
www.tocpractice.com
46
Special Thanks
Dr. Goldratt, Mr. Oded Cohen, JUNTOSKeita & RyomaPSNCKatsuyuki
Top mgmt for giving Chance, Gemba for accepting Change, and PJ members for Challenge
And, my family
How Santa delivers all the right presents to the right children across the world, in one night !?
from Odeds material
This picture drove me

to this journey.
ItaruWhere does Santa come from?

DADFinland
Itaru looks for a globe.
www.tocpractice.com
2012.4.14
My son (8 years old)
My Precious
47

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26th International Conference of the

TOC Practitioners Alliance - TOCPA

19-20 May 2016, Fukuoka, Japan

Junichi Sato is the project leader of Logistics reforming project of YAMAHA

In 2008, he became a manager and integrated Production Planning and IT

26th International Conference of the TOC Practitioners Alliance - TOCPA

Features of this presentation

26th International Conference of the TOC Practitioners Alliance - TOCPA

Starting Pilot Project

Conceptual Change from MTO to MTA

Obstacles & Solutions

26th International Conference of the TOC Practitioners Alliance - TOCPA

26th International Conference of the TOC Practitioners Alliance - TOCPA

490 Million yen

YAMAHA Kumamoto Products

26th International Conference of the TOC Practitioners Alliance - TOCPA

Business & Supply Chain

26th International Conference of the TOC Practitioners Alliance - TOCPA

Two Subcontractors work in our

26th International Conference of the TOC Practitioners Alliance - TOCPA

26th International Conference of the TOC Practitioners Alliance - TOCPA

To become a true Coherent plant based on link management technique

By reducing LT, we will achieve:

Stabilized & Rapid

26th International Conference of the TOC Practitioners Alliance - TOCPA

UDEs & Core Problem in

There is too much overtime in part production

Too much efforts and negotiations required to make a production plan

Many Improvement initiatives dont provide expected results

26th International Conference of the TOC Practitioners Alliance - TOCPA

Areas for applying MTIA and places

26th International Conference of the TOC Practitioners Alliance - TOCPA

Getting Buy-in from Top Mgmt

Inventory will increase!!

Its not equipment

Its not IT system

26th International Conference of the TOC Practitioners Alliance - TOCPA

26th International Conference of the TOC Practitioners Alliance - TOCPA

Joining MT Club* Mastering TP skills

Management Tools Program

26th International Conference of the TOC Practitioners Alliance - TOCPA

26th International Conference of the TOC Practitioners Alliance - TOCPA

Effectively transferred MTA knowledge

Developing new planning procedure

26th International Conference of the TOC Practitioners Alliance - TOCPA

Propeller line 93 items

Crank line 10 items

2. Determine RRT Reliable Replenishment

5. Explain to Gemba for supervisors &

26th International Conference of the TOC Practitioners Alliance - TOCPA

26th International Conference of the TOC Practitioners Alliance - TOCPA

Previous Way of Managing Production

Its not Coherent Plant!

Each process makes a plan based on local optima.

26th International Conference of the TOC Practitioners Alliance - TOCPA

Reducing inventory at any place is a

Build Stock Buffer and commit to

Flexible Schedule through Buffer

Production plan is made fortnightly

26th International Conference of the TOC Practitioners Alliance - TOCPA

Focus on reducing inventory (Inventories

Supply to SFWH No Push

Set Target Level per SKU (Stock Buffer)