5 - Junichi Sato (YAMAHA) - 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
- (MTO)(MTA) Using TOC Replenishment to transform production from MTO to MTA

Junichi Sato
YAMAHA Kumamoto Products

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.
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26th International Conference of the TOC Practitioners Alliance - TOCPA
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.
Parts production had severe problems lack of capacity and mis-synchronization with subcontractors.
For solving these problems, YKP started Pilot implementation of MTIA Make to Internal Availability
in February 2013. After 2-3 months, YKP saw that 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

Bottom-up implementation
Transform from MTO to MTA
Win-Win relationship with subcontractors
Usage of Thinking Processes before and during implementation
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Agenda
Company Profile
Background
Consensus
Starting Pilot Project

Conceptual Change from MTO to MTA
Inherent Simplicity
Collaboration with Subcontractors
Win-Win
Obstacles to be overcome
Respect
Results
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
Igusa
YAMAHA Kumamoto Products
Established
November 1998
Capital
490 Million yen
Employee
556
Business
Manufacturer of Marine Engines
Sales
21,800 Million yen
Banpeiyu
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Business & Supply Chain

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

plant - Outsourcing
Smooth
ing
Dependent Set-up
Long set-up time(3-10H)
Multiple CCRs
Machining
390 SKUs
PI
Common parts 100 SKUs
5,500 SKUs
Painting
Assembly
425 SKUs
Packing
445 SKUs
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Ship
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
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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?
Inventory is
Enemy?
Whats wrong with inventory?
Can solve
these issues?
Stabilized & Rapid
Flow
By reducing LT, we will achieve:
OE reduced
Demand satisfied
Implementing APS
Backward scheduling
But Murphy in execution
Same Demands?
Coherent Plant
Nimble & Strong Chain
Production
Increase Efficiency
Distribution
We have focused on higher DDP for HQ

Reduce
First target
But the need of customer in US is
same as in Indonesia?
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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
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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
Procur
ement
Replenish
MTIA
Consume
X4
Casting
Smoot
hing
M/C
Request
PTA
SFWH
Paint
Assy
Pack
SFWH
Procur
ement
X180
countries
Dock
WH
Press
fitting
RWH
Pack
RM
Dealers
Areas for applying MTIA and

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

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

Go back to the old days
Its not equipment

investment? Its not IT system
Implementation?
HQ havent
implemented
Gate3
Twice
Technology
Management
Gate1
7 times
Production
Gate2
3 times
Gate4
Business
Planning
PPC
Production
Is it
magic stick?
Use Transition Tree (TrT) to plan my actions
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13
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
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14
Implementation 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

TOC-TP Training Course
Management WS
Solution Offer to Director
Implementation Set-up WS
Knowledge Transfer to Core Team
Decision made
for Roll-out
MT Club Monthly volunteer study meeting by graduates of MT Program
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15
Project Team
Steering
Committee
Project Leader
Core Team
Juntos
Keita Asaine
Junichi Sato
Juntos
Ryoma Shiratsuchi
PSNC
Katsuyuki Utsunomiya
Facilitator
IT 2p
PPC p
Casting, Machining
Mgrs, Supervisors
Smoothing
Mgrs, Supervisors
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16
Implementation Set-up Workshop

MTA Game
with a
smile
Developing new planning procedure
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Conflict on how to use APS
17
Preparing Pilot
1. Select controllable number of SKUs
for participating in Pilot
102 items
MTIA
Propeller line 93 items
MTIA
MTIA
MTIA DIOH
Crank line 9 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
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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
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%
WO
(WIP)

(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
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
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19
Our Previous Way of

Managing Production
Due Date
Process
Due Date
Due Date
Casting
Smoothing
Machining
Painting
Assembly
WO release
WO release
WO release
WO release
WO release
Scheduler
Leave to
Outsourcing
PPC Negotiate
with Production
Leave to
Production
IT
System
Planning
Due Date
Due Date
Scheduler
PPC negotiate
with Production
Inventory
Flow
Retention
Retention
Automatic Planning
Retention
Retention
Each process makes a plan based on local optima.

Too much WIP leads to longer Production lead time.
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20
Inherent Simplicity
Nevertheless..
Reality
There are stocks hold after machining

processes.
If we have a warehouse, there is no need

to take order quantity into account
when determining production quantity
(Decoupled)
Downstream
Current procedure
Quantity and release date of WOs are

planned per each work center according to
master schedule of assembly it means
they are run under MTO having due dates
for assembly.
Due dates are set per each work center.
Supply
Demand
Why we have GAP
We had seen the area holding stocks as just a

stopping point (yard), not a warehouse.
There is no way (no idea) to give instructions for
which SKU, how may and when to produce.
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21
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
Build Stock Buffer and commit to
a major consideration
availability at SFWH
Produce to Assembly Schedule.

WO quantity is influenced by
assembly schedule
Fixed Schedule.
Production plan is made fortnightly
Every process has local due date
Replenish to Consumption.
Determine WO quantity with
consideration of difference in
capacity from assembly
Flexible Schedule through

Buffer Management.
Frequently plan when to release
WO according to buffer status
WO Work Order
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22
MTIA Rule 1:
Establishing SFWH as Regulator of
Replenishment System
Produced stock is Pushed to downstream
Stock after machining is treated as
WIP
Smoothi
ng
Casting
Machining
Paint/
Assembly
Manage stock per process

Focus on reducing inventory
(Inventories are all Enemy)
Supply to SFWH No Push

Stock after machining is strategically
treated as on-hand stock at SFWH
On the Way
Onhand
SFWH
Set Target Level per SKU and manage

Paint/
Assembly
total stock in the whole processes

Focus on ensuring Availability at
SFWH
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23
MTIA Rule 2:
Replenishment to Consumption
Current way: Local PULLEventually PUSH
Casting
Smooth
ing
Machini
ng
Assembly
Assembly schedule is DRUM

WO quantity is planned in conjunction
with assembly schedule
We can not plan for preceding process
without determining the plan for postprocess
MTIA way: Global PULL

Replenish
Parts 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

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24
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
BM
Meeting
Not allowed to
release WO
Performance
Measurement
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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25
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
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26
Seek for Collaboration with

Subcontractors
Listened to the subcontractors voice to understand their reality
Interview with GM
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
Offering our solution (MTIA)

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 synchronized tool & measurements
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27
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
DIOHon setting
target level?
Machining
Smoothing
WO File
Planning
Daily Consumption
This sequence of
WOs is suitable
for everyone
Outsourcing
Estimated
required APS
resources
Going to delay
due to Murphy
Planning
Casting
Casting
Machining
Tools
PPC
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Casting
PPC
Outsourcing
28
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
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29
Project Members Conflict

about Production Planning
Respect to the members idea
We had a two
conflicting ideas
about planning.
Supervisors do not have idea to give load

estimation for a week ahead.
Avoid
unnecessary
overtime
Manage well
Proper resource
allocation
PPC decides
detailed schedule
of machine shop
Supervisors
decides detailed
schedule of
machine shop
PPC knows only line level of load status.
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Insufficient
information to decide
detailed schedule.
PPC and foremen has
different priorities.
Injection:
Supervisors and PPC
sit together and
combine their
information for
determining schedule.
30
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
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31
Results:
Availability and DIOH
Propeller
Availability
Building enough
on-hand stock
93 SKUs
Availability
72% 82%
Availability (# of SKUs with DIOH1d)/93 SKUs
DIOH
3.1d 4.3d
DIOH Days Inventory On-hand
32
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Results:
Availability and DIOH
Crank
Availability
Ensured
availability of RM
8 SKUs
Availability (# of SKUs with DIOH2d)/8 SKUs
DIOH Days Inventory On-hand
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Availability
92% 92%
DIOH
6.7d 8.1d
33
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
17.6 d 6.4 d
65% reduction
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PLT
10.2 d 3.8 d
63% reduction
34
Results:
Set-up Time
Propeller
Crank
4000
80
4000
3500
70
3500
30
25
3000
60
Ave
3000
Ave
2500
20
50
2500
2000
40
Ave
1500
Ave
2000
15
30
1500
10
MTIA start
1000
500
20
1000
MTIA start
10
500
Set-up time
2528 min 1827 min
reduced
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Set-up frequency
/mo /mo
reduces
Set-up time
2609 min 1668 min
reduced
20137
20136
20135
20134
20133
20132
20131
201212
201211
201210
20129
20128
20127
20126
20125
20124
20123
0
20122
0
20121
20137
20136
20135
20134
20133
20132
20131
201212
201211
201210
20129
20128
20127
20126
20125
20124
20123
20122
0
20121
Set-up frequency
/mo /mo
reduced
35
Results:
Changed Gemba
WIP was vanished
Before
After
Pre-heating Machining
Line B
Line A
To yard
WIP
Post-heating Machining
Post-heating Machining
Pre-heating Machining
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 D
Line C
Line C
Line D
Which line should I work for?

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WO1 WO2 WO3
WO1 WO2 WO3
Color status gives clear priority

Resources are allocated with concentrated
36
Results:
Gembas Voices
Smoothing
Aluminum Processing
(Internal subcontractor)
Casting
Aluminum Processing
Casting
Supervisor, foremen
No expedites from
post-process
Casting Prod. mgr

Easy to manage
by controlling
stock level
per each item
Smoothing foremen
Reduced
unreasonable
overtime
Smoothing Supervisor
Available spaces
got wider because of
reduced WIP
Foremen
Easy to assign
resources between
Workplaces
No need to urgent
adjustment and
no waiting time
Steel Processing
foreman
Easier quantity control

because of shipping lot size
Our efforts for
in-process inspection
can be reduced
Aluminum Processing
Prod. Mgr
Management based on
latest information is effective
as we have troubles everyday
Whole processesProduction mgr, Supervisor

Space of warehouse will be insufficient, after roll-out started.
Reservations
Steel Processing
Casting
Containers will be not enough by increasing stocks at SFWH.
We will run space simulation

and take it into account.
We got positive and meaningful feedbacks from Gemba people!

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37
Roll-out Results:
Before 18d Target 9d
Actual
8.6d
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38
Roll-out Results:
Availability & DIOH
Availability
70% 90%
Availability & DIOH

Availability
Target 95
DIOH
Target 5d keep
# of delayed delivery to Assembly

300
250
# of delay to Assy
263 98
263
251
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
39
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
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40
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 1
MTIA Make to Internal Availability
Parts Production
Phase 3
Phase 2
SFWH
MTA Make to Availability
DTA Distribute to Availability

RW
H
Assy
CWH
RWH
RW
H
RW
H
Synchronize the Plant and

the Downstream Chain
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New Replenishment Time

CWH Central Warehouse
41
RWH Regional Warehouse
Agenda
Company Profile
Background
Results
Future Plan
Lessons Learned
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42
Lessons Learned
With my own words
It makes no sense to speak aloud the material provided by consultants.
Understanding the logic of solution and gaining confidence gives 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 experiencing 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.
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43
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.
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5 - Junichi Sato (YAMAHA) - 26 TOCPA - Japan - 19 May 2016 - Eng-Upgr

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

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26th International Conference of the

TOC Practitioners Alliance - TOCPA

19-20 May 2016, Fukuoka, Japan

YAMAHA Kumamoto Products

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

Collaboration with Subcontractors

26th International Conference of the TOC Practitioners Alliance - TOCPA

26th International Conference of the TOC Practitioners Alliance - TOCPA

YAMAHA Kumamoto Products

490 Million yen

Manufacturer of Marine Engines

21,800 Million yen

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

Common parts 100 SKUs

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:

We have focused on higher DDP for HQ

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

26th International Conference of the TOC Practitioners Alliance - TOCPA

Getting Buy-in from Top Mgmt

Inventory will increase!!

Its not equipment

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

Implementation Set-up Workshop

Developing new planning procedure

Conflict on how to use APS

26th International Conference of the TOC Practitioners Alliance - TOCPA

Propeller line 93 items

Crank line 9 items

2. Determine RRT Reliable

26th International Conference of the TOC Practitioners Alliance - TOCPA

26th International Conference of the TOC Practitioners Alliance - TOCPA

Our Previous Way of

Each process makes a plan based on local optima.

26th International Conference of the TOC Practitioners Alliance - TOCPA

There are stocks hold after machining

If we have a warehouse, there is no need

Quantity and release date of WOs are

Due dates are set per each work center.

Why we have GAP

We had seen the area holding stocks as just a

26th International Conference of the TOC Practitioners Alliance - TOCPA

Reducing inventory at any place is