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10th International Conference of the

TOC Practitioners Alliance - TOCPA


www.tocpractice.com

Feb 21-22, 2014 Noida, India

VATX Flow Analysis: Core


Problems and Customised
Solutions
John Darlington
Valueflow, Management
University of Buckingham, UK
21 February, 2014
10th International Conference of the TOC Practitioners Alliance - TOCPA

John Darlington
John Darlington is originally an accountant. John
qualified as a "Lean and Six Sigma Expert" through
the Renault Institute of Quality Management and as
a "Jonah" through the Goldratt Institute.
He
worked for Allied Signal for thirteen years in the
Turbocharger division.
His roles varied from
Financial Controller and IT Manager to Plant
Manager of the European Aftermarket. He spent
two years as Kaizen Director of the largest Forging
Group in the UK, where his role involved him
heavily in the systematic application of Lean
Manufacturing and Supply Chain Management. He
combines application with teaching for the
University of Buckingham on their MSc in Lean
Enterprise, specialising in Mapping, Capacity
Planning and Costing.
John has been a guest
speaker at APICS, and SAPICS where he won the
Toyota Prize for Best New Idea

Contact details:
j.darlington@valueflowconsulting.com
+44 (0) 7811 440847

10th International Conference of the TOC Practitioners Alliance - TOCPA

VATX Analysis
Plants classified by the BOM shape/ material flow.

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10th International Conference of the TOC Practitioners Alliance - TOCPA

VATX Flow Analysis

VATX is a constraint management method for


determining the general flow of parts and products from
raw materials to finished products.
Through conceptualisation it enables the identification of
typical areas for improvement.

10th International Conference of the TOC Practitioners Alliance - TOCPA

VAT Analysis - Dominant Characteristics and Issues


(1 of 4)

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Metals
Food
Chemicals

V plant.
Few raw materials
Wide variety of finished products
Points of divergence/differentiation
Specialised plant and machinery
Often process flow orientated

Issues:
V Plants
Plant utilisation important, often run campaigns
WIP too high
Lead time too long
Due date performance spread, late and early
Perceived to be not cost competitive
Always trying to reduce operating expense

10th International Conference of the TOC Practitioners Alliance - TOCPA

VAT Analysis - Dominant Characteristics and Issues


(2 of 4)
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Capital goods
Aerospace

A plant.
Assembles products
Assembly driven
Many raw materials & bought out components
Process time a fraction of lead time
General purpose machines often in cells

Issues:
A Plant
Labour utilisation important, keep them busy
syndrome
WIP too high
Lead time too long
Due date performance poor, usually late
Lots of expediting, massive overtime

10th International Conference of the TOC Practitioners Alliance - TOCPA

VAT Analysis - Dominant Characteristics and Issues


(3 of 4)
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Vehicle manufacture
Electronics

T plant.
Wide range of products customised at assembly
Core of common components
High bought-out content
Market/customer service orientation
The modern assembly plant

Issues:
T Plants

Component supply important, cannot forecast accurately


Usually problems with purchased parts lead times
Due date performance very spread, very late very early
Very high component stocks
Shortages everywhere, shortage steal shortage vicious circle
Wandering bottlenecks
Overtime everywhere

10th International Conference of the TOC Practitioners Alliance - TOCPA

VAT Analysis - Dominant Characteristics and Issues


(3 of 4)
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Aftermarkets
Repair & Overhaul
Remanufacture

X plant.
Wide variety of components and finished products
Often short lead time response required
Different ratios of bought out and made in house
Contractual arrangements regarding product life
cycle support
Hub and local distribution issues

Issues
X Plants
Trade off between service and carrying costs
No statement of policy regarding target customer
service
Sourcing from suppliers
Inter company rivalries
Aged profile of stock
Pricing and copiers
10th International Conference of the TOC Practitioners Alliance - TOCPA

VAT Analysis
Plants classified by the BOM shape.

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Typical: Food / Metal / Chemical


SPECIALISED MANUFACTURING
CAPABILITIES

USUALLY A WELL DEFINED PROCESS FLOW


FOLLOWED BY MOST PRODUCTS
ISSUES
*COST*CAPACITY*DELIVERY

10th International Conference of the TOC Practitioners Alliance - TOCPA

VATX Analysis

V
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SPECIALISED MANUFACTURING
CAPABILITIES
Opportunities for products to be sold at
various stages of production
Or bought in for additional processing
One way or another spare capacity is sold
and a balanced plant emerges causing due
dates to be missed and creating extra
unplanned operating expense
Plant lurches from under activity and cost
saving mode when sales are low, to
bottleneck status and lates when sales are
high
10th International Conference of the TOC Practitioners Alliance - TOCPA

VATX Analysis
Unlikely to have a conventional MRP system
(What for? Doesnt address our needs)
Will Have:
-RAW MATERIAL STOCK (IN STORES)
-CUSTOMER ORDERS

SHOULD HAVE:
-ROUTINGS
-WIP TRACKING

UNIQUE CAPACITY IS THE KEY (This is what you sell)


GOOD SERVICE CAN OFFER SIGNIFICANT
COMPETITIVE ADVANTAGE
10th International Conference of the TOC Practitioners Alliance - TOCPA

VATX Analysis

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Many materials and parts few finished


products

Parts manufacture
Often organised by type of
machine
Sometimes by part type in cells
Separate Assembly and sub assembly
areas

10th International Conference of the TOC Practitioners Alliance - TOCPA

VATX Analysis
Plants classified by the BOM shape.

Typical material flow:

PRODUCT OR COMPONENT
SYNCHRONISATION IS THE KEY

SHIPS AIRCRAFT AERO WINGS BODIES


ISSUES:
*STOCK*SYNCHRONISATION*LEAD TIME
10th International Conference of the TOC Practitioners Alliance - TOCPA

VAT Analysis
Plants classified by the BOM/Route shape.

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T
Many finished products assembled
from common components
Models options variants specials
Parts often purchased
Competitive market

10th International Conference of the TOC Practitioners Alliance - TOCPA

VAT Analysis
Plants classified by the BOM/Route shape.

S
U
P
P
L
I
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R
S

PRODUCTION

PRE
ASSEMBLY
BUFFER

ASSEMBLY

C
U
S
T
O
M
E
R
S

Automotive, Electronic Instruments, Furniture, Hydraulic


Controls, Telecommunications
10th International Conference of the TOC Practitioners Alliance - TOCPA

VAT Analysis
Plants classified by the BOM/Route
shape.
MARKET ORIENTATED
PRODUCT ORIENTATED
COMPETITION
Customisation to maintain volume/priceOn time delivery (DAS)
Procurement planning
problems
Shortages*

Kit Robbing/Stealing

ISSUES
Delivery On time Lead Time
10th International Conference of the TOC Practitioners Alliance - TOCPA

What are the implications of


these models on planning and
scheduling?

10th International Conference of the TOC Practitioners Alliance - TOCPA

Terminology: Planning and Scheduling


Planning
A set of longer term actions that define the desired demand
profile, and capacity required to deliver it, such that the purpose
of the organisation is satisfied. Planning tends be to over longer
horizons and the buckets of times are often in months or
quarters or years

Scheduling
The critical difference distinguishing scheduling is that it also
involves sequencing of work and the time horizon is much shorter.
Depending upon the organisation and business the time buckets
can be hours or days but often not much more than a couple of
weeks

10th International Conference of the TOC Practitioners Alliance - TOCPA

Planning and Scheduling: Process Characteristics

Constrained

Strategic

Planning

Tactical

Planning

Operational

Scheduling

Least

Most

Horizon

Bucketed

Years

Months/Quarters

Months

Weeks/Months

To ensure there is sufficient capacity


and materials to meet customer
demand
To Resolve conflicts

Days

Days/hours/minu
tes Bucket less

To execute the plan


To meet specific due dates
To optimise resource utilisation within
the constraints of the plan

Purpose
Acquisition and Disposals
Major plant investment
Market strategy

10th International Conference of the TOC Practitioners Alliance - TOCPA

Process Flow
Forecast &
Customer Orders
Material availability

Stock,
Orders,
BOM

Planning
Management Policy
The Rules
Working Capital
Headcount
Overtime
Customer Service

Capacity
availability

Resources,
Routes,
Calendars

Scheduling
MRP or DBR

Schedules

Drum Buffer Rope,


Heijunka, Kanban
Conwip

10th International Conference of the TOC Practitioners Alliance - TOCPA

How does it apply to VATX


plants?

10th International Conference of the TOC Practitioners Alliance - TOCPA

Scheduling For Flow In a true V Plant


40

50

100

70

Shipping
Buffer

80

60

120

Schedules Essential At:


Constraints
Points of Differentiation
Despatch

300

Raw Materials
10th International Conference of the TOC Practitioners Alliance - TOCPA

Scheduling For Flow In a true V Plant


40

50

70

100

Shipping
Buffer

80

60
Inv

Inv

120

Schedules Essential At:


Constraints
Points of Differentiation
Despatch

Inv

300

Raw Materials

Buffering of
Constraint
Processes

10th International Conference of the TOC Practitioners Alliance - TOCPA

Scheduling For Flow In a true V Plant:


understanding the constraint characteristics
40

50

70

100

80

60
Inv

Inv

120

Schedules Essential At:


Constraints
Points of Differentiation
Despatch

Inv

300

Raw Materials

Buffering of
Constraint
Processes

Shipping
Buffer
The size of
the
required
buffers are
a function
of process
variation
AND issues
around the
points of
divergence

10th International Conference of the TOC Practitioners Alliance - TOCPA

Scheduling For Flow In a T Plant


38

Shipping Buffer
46

Buffering of
Constraint
Process

Schedules Essential At:


Constraints
Assembly
Despatch

Assembly

Pre
Assembly
Buffer

48
Inv

78

100

100

75

120

120

280

300

300

Raw
Material

Raw
Material

Raw
Material

A detailed
schedule would
try to get to a
status where a
non constrained
parts should
never hold up a
constrained part
in the PreAssembly
Buffer.
Assemble to
order or finished
goods.
Manufacture by
replenishment
to the pre
assembly buffer

10th International Conference of the TOC Practitioners Alliance - TOCPA

Scheduling for Flow in an A Plant


A Plants:
Complex
MRP essential to nett of demand
per BOM level
Likely to be many manufacturing
centres
BOM accuracy vital
MRP NOT used for scheduling,
maybe sequence
Even APS systems are not
dynamic enough

Best to produce an MPS for each centre, and use


appropriate pull system for scheduling
For the centre a good description of the capacity
constrained resource is essential
10th International Conference of the TOC Practitioners Alliance - TOCPA

Summary : - Planning and Scheduling


ERP/MRP have taken modern organisations as far as they can go in terms of
delivery of short lead time manufacturing. It should be retained for: Netting against current inventories and showing future demands
For rough cut capacity planning but for the most part Without the lead time
offsets applied first
In A plants manufacturing centres should be effectively decoupled compared
with today.
Each centre should become autonomous at a tactical level and completely
responsible for achieving the due date required by the customer centre(s).
Each centre should become responsible for what it buys and when
Each centre should determine when to launch work into work in progress
using the DBR or appropriate methodology, taking all constraints into account
simultaneously
The Manufacturing Centres should become responsible for their capacity planning
Requiring greater precision regarding product process characteristics
The planners need to get back to BEING PLANNERS not administrators of ERP

10th International Conference of the TOC Practitioners Alliance - TOCPA

VATX Analysis Applied:


Case Examples

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10th International Conference of the TOC Practitioners Alliance - TOCPA

A Case Study example Its too expensive to stop

10th International Conference of the TOC Practitioners Alliance - TOCPA

DBR solution fits V plants very well: there are


often multiple scheduling points
The Schedule for the Forge is sensitive to batching.
Finishing only pulls what is required for the immediate
week ahead
Finish
North Line

Die Shop

Cutting

Control
Cooled

Shotblast

Heat
Treatment

Shotblast

Finish
South Line

Forge
Induction
Heating

Joy
Mining Line

Scheduling Points
Raw material

Work in Progress

Finished goods

28.10 days

34.70 days

11.30 days

10th International Conference of the TOC Practitioners Alliance - TOCPA

Measure of Improvement:
More Sales & lead time
Manufacturing Lead Time as Measured by Days Inventory in WIP

35
20,000
28.1

30

29.1

29.0

25
22.9
20.1

20

20.0

18.4
16.7

10,000

15

14.6
13.0

12.4
9.0

8.9

5,000

Days

No. of Pieces

26.3
15,000

10
7.8
5

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Closing WIP (Pcs) 10409113441250712693 8812 9360 7336 8739 7633 6781 6159 5136 7352 4945 4207
Sales (Pcs)
WIP Days

111071174814275130851440113945110101144013700156002075912476151041647316216
28.1 29.0 26.3 29.1 18.4 20.1 20.0 22.9 16.7 13.0

8.9

12.4 14.6

9.0

7.8

Period

10th International Conference of the TOC Practitioners Alliance - TOCPA

VATX Analysis Applied:


Case Examples

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10th International Conference of the TOC Practitioners Alliance - TOCPA

Russian Factory

10th International Conference of the TOC Practitioners Alliance - TOCPA

Russian Factory Background


Core Problems
Low Delivery performance
High level of stock in finished goods and work in progress
Shortages of parts holding up main builds

Contributing Factors
Tendency to stick with manufacturing to an annual plan no matter what was
really happening to demand
Large batch sizes compared to demand driven quantities made in the belief
it saves cost of set up
Some Piece Part Payments
DOS based system but had been sold Advanced Production Software

10th International Conference of the TOC Practitioners Alliance - TOCPA

Complex Flow
Orders

Finished Stock
Shop 61
Assembly
Shop 26

Assembly
Shop 13

Purchased
Parts

Base Elements
Shop 15

Preparing
Shop 11

Mechanical
Shop 2

Raw Materials
10th International Conference of the TOC Practitioners Alliance - TOCPA

Russian Factory Mapping Exercise

10th International Conference of the TOC Practitioners Alliance - TOCPA

Phase 1 Batching & Prioritising Shortages

The quantity of parts required is


lower because planning was set
for lot to lot. However the range
of parts required is likely to be
bigger

2009 Planned with batching


2009 Planned lot for lot

10th International Conference of the TOC Practitioners Alliance - TOCPA

The stages of the improvement implementation journey


Phase 3
Phase 2
Phase 1
Primary MRP using
XXX software at
Shop/Area level to
generate a Prioritised
List

Months 3 6

Gathering sufficient
data at M/C centre
level to develop
Capacity Planning
and more accurate
Schedules (see
sample Slide 27)

Months 7 15

Identify logical
constraints and
apply a
combination of APS
if required, sensible
buffering and
pull/replenishment
systems

Months 16 24

This is practical: we cannot leap to APS immediately!


10th International Conference of the TOC Practitioners Alliance - TOCPA

Phase 1 Creating the prioritised list


From
Shop
Shop Area
Within Area

To
Shop
Shop Area
Within Area

Move
40 hours
8 hours
2 hours

Exceptions where XXX Co feel this is not sufficient


From

To

Move

Shop
Shop Area
Within Area

Shop
Shop Area
Within Area

40 hours
8 hours
2 hours

Time Based
Minimum
Batch Qty

E.g. Batch size not less


than 120 minutes of
processing time

10th International Conference of the TOC Practitioners Alliance - TOCPA

Phase 1 Creating the prioritised list

Route

From

To

Lead Time for


Prioritisation ONLY

RC0201

RC0201

RC0202

8 HOURS

RC0202

RC0202

RC0401

40 HOURS

RC0401*2

RC0401

RC0402

8 HOURS

RC0402

RC0402

RC0403

8 HOURS

RC0403

RC0403

RC1001

40 HOURS

RC1001

RC1001

RC1002

8 HOURS

RC1002

RC1002

RC1099

8 HOURS

RC1099

RC1099

RC1101

40 HOURS

RC1101*1

RC1101

RC1102

8 HOURS

RC1102

RC1102

RC1103

8 HOURS

RC1103

RC1103

RC1307

40 HOURS

RC1307

RC1307

RC2601

40 HOURS

RC2601

RC2601

RC6099

40 HOURS

RC6099

RC6099

RC6199

8 HOURS

RC6199
TOTAL

304 HOURS

10th International Conference of the TOC Practitioners Alliance - TOCPA

Phase 1 Creating the prioritised list

RC1101*1 Part 6B8680374-05 Current Batch Size 220 Covers Demand for 5 months
RC0401*2 Part 6B8126085 Current Batch Size 200 Covers Demand for 1 month

10th International Conference of the TOC Practitioners Alliance - TOCPA

Phase 1 What would the Prioritised list look like?

Note that as we
are working lot for
lot the quantities
are those really
required by the
customer work
centre

Note that lists


are in
prioritised Job
Order
Note current batch
sizes are a waste of
capacity, money &
get in the way of
more urgently
needed parts

Note that the start


dates are likely to
be in the past at
first because of
arrears. So the
schedule start date
is from now but the
prioritisation is valid

10th International Conference of the TOC Practitioners Alliance - TOCPA

VATX Analysis Applied:


Case Examples

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10th International Conference of the TOC Practitioners Alliance - TOCPA

High Level Concept Tplant

Order Book
(due date sequence)
Order 1

1234

Order 2

42

Order 3

PRE
ASSEMBLY
BUFFER

3rd PARTY
SUPPLIERS

Kanbans card(?)

PRODUCTION

ASSEMBLY

32

Significant
characteristic:
Commonality of
parts
Scheduling options:
DBR
Kanban
Hybrid systems

Kanban movements
10th International Conference of the TOC Practitioners Alliance - TOCPA

Introduction

Workshop 26th & 27th March 2007

Venue: Conference Suite

The objective was to have a common understanding


by all of the "Current State information systems
describing Demand Management, Capacity
Management, Inventory Management and the
Systems approach including measurements.
The following areas were represented to help
achieve this objective:
Forecasting and order entry
Sales
Production
Planning and scheduling
Purchasing
IT
Finance
Engineering

10th International Conference of the TOC Practitioners Alliance - TOCPA

Questions to be answered by the maps


Order Fulfilment system: How do we offer a delivery date?
Order Forecasting and management: Do we achieve the
promised delivery date?
Inventory: What inventory do we have where, for how long,
for who?
Financials: What sales did we achieve, with what working
capital, at what operating expense? What was the
throughput?
Do we have a joined-up system?
Is the system predictable?
10th International Conference of the TOC Practitioners Alliance - TOCPA

Questions to be answered by the


Forecasting and Order promising map

How do we forecast future demand?


How do we set inventory levels for make to stock items?
How do we offer a delivery date?
Do we achieve the promised delivery date?

10th International Conference of the TOC Practitioners Alliance - TOCPA

Questions to be answered by the


order fulfilment map

How well does production perform?


How well is capacity described in assembly and primaries?
How are batch sizes calculated?
How frequently are batch sizes reviewed?

10th International Conference of the TOC Practitioners Alliance - TOCPA

Questions to be answered by the


Inventory and Financial Maps

What inventory do we have?


Where is it?
How long has it been there?
Why are we holding it?
For whom?
Did we achieve required levels of sales?
Was the throughput as expected?
Was the working capital as expected?
Was the operating expense as expected?
Are results predictable?
10th International Conference of the TOC Practitioners Alliance - TOCPA

World Wide Lock Maker

Workshop 26th 27th March 2009

10th International Conference of the TOC Practitioners Alliance - TOCPA

Introduction

ASSA ABLOY Thinkflow Workshop 26th & 27th March


2007

Venue: Portobello Conference Suite

The objective was to have a common understanding


by all of the "Current State information systems
describing Demand Management, Capacity
Management, Inventory Management and the
Systems approach including measurements.
The following areas were represented to help achieve
this objective:
Forecasting and order entry
Sales
Production
Planning and scheduling
Purchasing
IT
Finance
Engineering

G.Morgan (IT), K.Andrews (Logistics), R.Essom (Mul T Lock Logistics), L.Wales


(Thinkflow), J.Darlington (Thinkflow), L.Powers, Logistics) S.Newlands
(Operations), Ian Turner (Planning) Dave Richards (Primaries) K.Bajwa
(Logistics), A.Killip (Logistics), l.Robbins (Cylinders), M.Woodhouse (Padlocks),
J.Cooper (Planning), N.Harkness (Purchasing), D.Chambers (Planning),
L.McCourt (Bus Improvement), S.Firmstone (Planning), T.Brittle (Mortice),
S.Allen (Bus Improvement), T.Neale (operations), R.Simpson (Planning), L.Philp
(Engineering), I.Bartlett (Union Sales), T.Morton (Abloy Sales), K.Barry (Yale
Sales), R.Tame (Thinkflow), P.Deans (Cyl RIM), D.Gilbert (Export), P.Curtis
(Purchasing), I.King (Planning), D.Perry (Operations Director)

10th International Conference of the TOC Practitioners Alliance - TOCPA

Questions to be answered by the maps

Order Fulfilment system: How do we offer a delivery date?

Order Forecasting and management: Do we achieve the promised delivery date?

Inventory: What inventory do we have where, for how long, for who?

Financials: What sales did we achieve, with what working capital, at what operating expense? What was the throughput?

Do we have a joined-up system? Is the system predictable?

How do we forecast future demand?


How do we set inventory levels for make to stock items?
How do we offer a delivery date?
Do we achieve the promised delivery date?

How well does production perform?


How well is capacity described in assembly and primaries?
How are batch sizes calculated?
How frequently are batch sizes reviewed?

What inventory do we have?


Where is it?
How long has it been there?
Why are we holding it?
For whom?
Did we achieve required levels of sales?
Was the throughput as expected?
Was the working capital as expected?
Was the operating expense as expected?
Are results predictable?

10th International Conference of the TOC Practitioners Alliance - TOCPA

Order Fulfilment Map

Forecasting Map

Work In Progress Map

Financial Map

10th International Conference of the TOC Practitioners Alliance - TOCPA

The Final Forecasting and Order


Management Map

10th International Conference of the TOC Practitioners Alliance - TOCPA

The Final (?) Finished Goods Map


Assumptions

Uneveness

Average

Source
UKMANUF
FACTORED
FACT_PACK_UK
Check total
Grand Total

Average

Finished

Finished

Goods

Goods

Inventory

Overall

Inventory

last 3

Saving /

Min

overall in

months in

(Additions)

Order

Days

Days

's

Qty

Time

Time

Level

10
100
20

7
84
14

7
7
7

95
95
95

51.24
205.24
56.23

55.00
211.46
62.39

147.37

152.12

320,152
3,637,292
(94,860)
4280314
4,280,314

Target
Lead Review

Service
Over 's

Under 's

Nett 's

1,148,195
5,113,549
271,461

(828,043)
(1,476,257)
(366,321)

320,152
3,637,292
(94,860)

6,533,205

(2,670,620)

3,862,584

10th International Conference of the TOC Practitioners Alliance - TOCPA

The Final Financial Map

10th International Conference of the TOC Practitioners Alliance - TOCPA

Features of the Future State


1.
2.
3.

4.

Analyse the demand profile to determine which are suitable for


make to stock and make to order
Develop a forecasting system for finished goods (UK
Manufactured, Factored and Fact-Pack)*
Develop a forecasting system for the pre assembly buffers*
(components located around the cells whether they be sourced
from primaries, or bought out components)
Develop a time based capacity planner for areas/cells which is
easy to use
1.

Technical
1.

5.

6.

Mass update to BPCS for routings

Design the pull mechanism to finished goods replenishment or


make to order such that it appears to be one system on the
shopfloor
Assist in the design of training required to prepare the plant for the
new system.
10th International Conference of the TOC Practitioners Alliance - TOCPA

How much and where should we hold inventory?

We need finished goods if customers will not tolerate manufacturing lead times
We need intermediate inventories e.g. pre-assembly buffers to indicate by
consumption what must be replenished by upstream processes
Operational Kanban Structure
Primaries
Primaries

Final Assembly

Secondary Ops

Whse = [W2]
BO PARTS

Sequencing
Board/Planner

Painting

RAW MATERIAL

Plating

VOLUME
MORTICE
MACHINING

VOLUME
MORTICE
ASSEMBLY

SPECIAL
MORTICE
MACHINING

SPECIAL
MORTICE
ASSEMBLY

CYLINDERS
MACHINING

PRESSED
PARTS
CYLINDER
RIM
MACHINING

TURNED
PARTS

Subcontract

PADLOCKS
MACHINING

CYLINDERS
ASSEMBLY

CYLINDER
RIM
ASSEMBLY

PADLOCKS
ASSEMBLY

CASTING

Temporary Kanban Card


Printing Station

Key
Flow
Flow of
of Parts
Parts between
between Secondary
Secondary ops
ops
Flow
of
Parts
out
of
Kanban
Site
Flow of Parts out of Kanban Site

Formal
Formal Kanban
Kanban Site
Site
Kanban
Replenishment
Kanban Replenishment Signal
Signal

10th International Conference of the TOC Practitioners Alliance - TOCPA

KANBAN CARD Example


Supermarket
shelf is
permanently
identified in
fixed location.
Each container
contains a card,
which are
passed to the
replenishment
process kanban
board and a
copy to
planning for
keeping the w/o
ERP system up
to date when
consumed by
final assembly

10th International Conference of the TOC Practitioners Alliance - TOCPA

VATX Analysis Applied:


Case Examples

M
a
t
e
r
i
a
l
f
l
o
w

10th International Conference of the TOC Practitioners Alliance - TOCPA

Demand Categories
Type

Description

Normal

Continuous history with relatively high volumes, can be


forecast with confidence

Erratic

Intermittent history with medium to high volumes, can be


forecast with reasonable confidence

Lumpy

Very intermittent history with medium to high volumes, can


be forecast but with limited confidence. Preferably not made
to stock

Slow

Low volumes with some intermittent history, can be forecast


with limited confidence. More suitable to make to order

Management
Control

Very intermittent and unpredictable demand. Should not be


made to stock

New

More than 6 periods with zero demand but with 4 most


recent periods with demand greater than zero

All Demands Zero

No demand in the last 12 months


10th International Conference of the TOC Practitioners Alliance - TOCPA

Sales Analysis Y Co

Demand Class

No of
Demand as
No of Parts Parts as a Demand
%
%

Normal

56

36.13%

18514

95.4%

Erratic

29

18.71%

611

3.1%

Lumpy

30

19.35%

280

1.4%

Management
Control

40

25.81%

0.0%

New

0.00%

0.0%

Active Demand

155

100.00%

19410

100.0%

No Demand last
12 months

63

Total

218

10th International Conference of the TOC Practitioners Alliance - TOCPA

Y Sales Analysis (Sample of Normal Demand)

10th International Conference of the TOC Practitioners Alliance - TOCPA

Y Sales Analysis (Sample of Normal Demand


with Seasonality spotted)

10th International Conference of the TOC Practitioners Alliance - TOCPA

Y Sales Analysis (Sample of Lumpy Demand)

10th International Conference of the TOC Practitioners Alliance - TOCPA

Safety stock data requirements

10th International Conference of the TOC Practitioners Alliance - TOCPA

Summary:
For real optimum results, the One schedule fits all strategy is not true
To optimise results and flow, planning and scheduling has to use the most
appropriate solution for the department/ plant/ supply chain
The VATX concept is a simple way to understand typical characteristics and
issues of the systems
By studying the demand profile carefully and understanding the type of
plant you work in you can make an informed decision about which pull
system to adopt to deliver high customer service with less inventory which
will significantly improve bottom line performance.

10th International Conference of the TOC Practitioners Alliance - TOCPA

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