The starting steps

of a pilot project

Natalia Anisimova, School of Modern Management, branch of Novosibirsk State Technical University, Russia October 2013

26-27 October 2013, Moscow

www.tocpractice.com

8th International Conference of the

TOC Practitioners Alliance - TOCPA

Team of pilot project consultants

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NATALIA ANISIMOVA School of Modern Management, Novosibirsk State Technical University.anisimova-nv@yandex.ru

MARINA HAYRULINA School of Modern Management, Novosibirsk State Technical University.proreg5@mail.ru

KISLITSINA OLGA School of Modern Management, Novosibirsk State Technical University.olkis@ngs.ru

ALEXANDRA BRYZGALOVA Uniscan Bryzgalova@polus-st.ru

Before project start

6 layers of resistance to

change

5 focusing steps

TYPES of production

ENVIRONMENTS

TYPES of constraints

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Client Reinforced Concrete

Plant

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Baseline Situation: planning

FORECAST

Annual plan, m3

January

February

March

April

May

June

July

August

September

October

November

December

Monthly plan UPDATING

CURRENT ORDERS

TO MAKE PEOPLE BUSY

FORECAST

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Baseline Situation: plan

assessment

% OF ORDERS FULFILLMENT IN TIME

FULFILLMENT ON TIMEDAYS OF DELAY OF ORDER

FULFILLMENT ON TIME

LOST PROFITS BECAUSE OF STOCK-OUTS

%M3

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Recent ownership changes Mixed environment (+S) Small number of work cycle activities Frequent changes of shipment deadlines by clients

Each client is unique

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The simultaneous production of

products for both warehouse and

order fulfillment

(some clients do not wait) (some clients prefer to take products by parts, as and when

needed)UDE 1: Very often there is a stock-out of some SKUs

UDE 4: Casting boxes often are occupied when they are needed

UDE 2: Too many SKUs with high inventory level

UDE 5: During the season too much overtime

UDE 3: Often clients, who place a large complex order, do it only in case of availability of all needed SKUs

UDE 6: There are too many large-size products that are not shipped out from warehouse on time by the clients

UDE 7: Priorities of order fulfillment are continuously changing

DD

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A

B

CAvoid having a

high level inventory in the

warehouse

Make profit

Not to lose any client

Ensure effective use of working

assets

Have a high level of inventory in the

warehouse

Inventory cloud

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Selection of TOC tools

STANDART TOC TOOLS ?

STANDARD ENVIROMENTS

STANDARDUDE

STANDARDCLOUD

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solutions

Issue raw

materials

Issue raw

materials0-33% 34-66% 67-100% DeliveryDelivery

Time

Shipment dateTOC solutions for

TOC solutions for

TARGET BUFFER LEVELProduction

Daily consumption (withdrawal) from buffer

I on handsII On the way to the buffer

III Include to production plan

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Pilot project tasks

PLANT

To verify,check,

get

knowledge,procedures,

tools

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Start of the

Pilot Project

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Mixed environment: technical

challenges

the need for simultaneous planning for the same SKU for both and environments complexity of order status monitoring the need to divide the finished products accepted to the warehouse in linkage to the specific clients and ordersSolution: production planning for both environments in one file

Mixed environment

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Small number of work cycle

activities

RM issueRM issue 0-33% 34-66% 67-100% DeliveryDelivery

Time

Shipment date

Production Production of

reinforcing steel

MoldingDevelopme

nt of strength

FG warehous

e

RM

ouse

RM Warehouse

Manufacturing technology

1 day2 hours -

1 day 1 day* quantity of products/number of molds3 days

l

i

n

e

D

e

a

d

l

i

n

e

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Solution: diagonal buffer

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Frequent changes of shipment

deadlines by clients

The warehouse is not bottomless

Stringent requirement on finished product storage

High cost of crane operation

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Cloud of reserves

A

DB

C DTo hold reserves for

special clients

Make profit

Ensure inventory availability at the

warehouse for the clients that are not ready to wait ()

To be a reliable supplier ()

To sell reserves of the clients that did not

withdraw items from a warehouse in time

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Actions Taken

Daily monitoring of shipment deadlines Reallocation of reserves Sales managers trainings

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The client is not unique

Dependence on 1 software and IT manager

Solution

Software development that will take into account the "uniqueness" and "non-uniqueness" of the client

for:The production and technical department, shops, sales managers, logisticians and the warehouse.

Software: first results

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0%

50%

100%

150%

%

Results of the pilot

projects starting steps:

A mechanism is in place to ensure transparency, visibility and possibility of competent adjustments

Developed primary procedures of internal management for sales, production plan and procurement synchronization

Identified constraints that do not allow to the pilot project to provide full benefits of the solution to the company.

Knowledge was transferred to the employees of the Company and the implementation group was trained for the project roll-out across the Company