Download - 02. BUILD OUT
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22BUILD OUT
Version 2
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Contents
1. Build Out Activity Defined 3
2. Introducing Build Out Project Team Organization 4
[JP Source Parts]
3. Introducing Build Out Project Team Organization 5
[Non JP Source Parts]
4. Role of B/O Project Team (PJT) ...6
5. EIGHT Key Steps of Build Out Activity 7 to 10
6. B/O Activity Outline Schedule 11
7. Scope of Activities according to Business Type 12
8. ConceptClassify & Prioritize Important Parts 13 to 14
9. Ordering Check Points 15
* Appendix in excel attached
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1. Build Out Activity Defined
1. Definition of Build Out
BUILD OUT (B/O) or RUNOUT refers to car model, grade or parts which may be
discontinued. Build Out Activity is thus the activity to manage build out.
2. Purpose
To minimize dead stock & losses to TTC Group & its vendors.
To improve supplier & TTC Group stock level.
3. Target
ZERO dead stock = ZERO cost!
* We do not yet have clear idea how to set realistic target for dead stock.
Project team will continuously study it by accumulating experiences from future model change
4. Scope
B/O Activity needs to be performed regardless the scale of the B/O. (ie has to be done even for a few parts)However the extend of activities differs depending on business type. For instance, stock control is not
necessary for Firm Business. Please see Slide 12 for details
5. Request
Please keep Build Out Project Leader(refer to organization in following pages) informed of any model
change in your country
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2. Project Organization [JP Parts]
TMC
TTC PJ MANAGER/LEADERAdvanced Operation G
TTC REGIONAL LEADER
Sales GTTC IMP
CTRY LEADER
SUPPLIERS
/CUSTOMERS
SUPPLIERS
/C
USTOMERS
TTC SALES PIC
Sales GTTC IMP
Sales G
PJT
*PJT : Project Team
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3. PJT Organization [Non JP Parts]
*PJT : Project Team
PJT
TMC
TTC PJ MANAGER
Advanced Operation G
TTSPL
Sales G
TTC IMP
CTRY LEADER
SUPPLIERS
CUSTOMERS
TTC EXP
Sales G
TTC IMP
Sales G
TTSPL/TTTC PJ LEADER
TTC EXP
CTRY LEADER
WINDOW TO TMAP
TTTC TMAP EM
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4. Role of B/O Project Team (PJT)
PJ
MANAGER
1. Centralize management of overseas (ie schedule
management, set up obeya for visualization, review and allocate tasks)
2. Rule making & operation standardization. Yokoten to other countries
3. Irregular support to overseas Gemba (ie explanation to suppliers,
attend manpower shortage, sales promotion for new models)
4. Evaluationand report of activity result to TMC, TMAP or TTC management
PJ
LEADER
REGION / CTRYLEADER
WINDOW TO TMC
WINDOW TO TMAP
TTCAdvanced
Operation G
1. Centralize management of own country / region's status.2. Report to PJ Leader own country / regions status.
1. Reporting, receiving requests, gathering information, requesting support
1. Reporting, receiving requests, gathering information, requesting support
2. Observing TMAP EMs operation to Yokoten to other countries
1.Overall centralize management of overseas through PJ Leaders
(ie schedule management, set up obeya for visualization, review and
allocate tasks)
2. Rule making & global operation standardization with PJ Leaders
3. Irregular support to overseas Gemba (ie explanation to suppliers,
attend manpower shortage, sales promotion for new models)
4. Evaluationand report of activity result to TMC, or TTC management
TTCAdvanced
Operation G
TTSPL/TTTC
ROLE TASKS
SALES G
TTTC
TTC
CO
* Yokoten : is a Japanese word that roughly translates to sharing best practice.
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5. EIGHT Key Steps of B/O Activity1/4
ITEM TASK PURPOSE & TASK DESCRIPTION TIMING PIC APPENDIX
0. REVIEW THEDAILYOPERATION
0A. REVIEW THE DAILYOPERATIONS
This is the most important activity of B/O. We need to constantly recheck ouroperation and in case we find any abnormalities, we need to seek necessarycountermeasures BEFORE B/O
Refer to [Operation Review Checklist] in Appendix 0A for a list of Importantpoints to be reviewed. Complete and send to PJ Leader (Regional Leader forJP Parts)
UNTIL
N-10
TTCEXP/
IMPMANAGER
0A
1.
B/O
PREPARATIONACTIVITY
1A. COLLECT OVERALLSCHEDULE INFORMATIONFROM TMC/TMAP OR TTCG
Send schedule of Last Production Month concerning ALL countries for eachmodel to related countries. Please start following B/O activities timely basedon this information.
PJ Leader will also announce which model change will be handled as PJbased on volume, no of countries involved, sales amount etc. For modelchange that will not be controlled by PJT, please manage B/O activities withinyour own country using this manual at your own discretion.
UNTIL
*N-12
PJTLEADER
1A
1B. APPOINT PIC TO BE INCHARGE OF BUILD OUT
Submit name & contact information of Country Leader to PJ Leader
Manager s need to ensure that appointed B/O Leader is well versed in B/Otasks required in this manual. The performance of B/O Leader would affectcountrys evaluation done at the end of each B/O project
PJ Leader will send B/O contact list to related countries
*N-10
W1
TTCEXP/
IMPMANAGER
1B
1C. SET UP OBEYA
(PROJECT ROOM)
For visualization and accurate management of activity
Refer to Appendix 1C for suggested materials to be used for obeya
N-10 TTCG 1C
There are EIGHT key steps in which TTC Group need to perform to proceed with B/O management
SAMPLE
N: Local TMCs Last Production Month
*N: Last Production Month of 1st
Country
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5. EIGHT Key Steps of B/O Activity2/4ITEM TASK PURPOSE & TASK DESCRIPTION TIMING PIC APPENDIX
2. GRASP B/OOUTLINE
2A. GET B/OINFORMATION FROM
LOCAL TMC
TMCs first release of master schedule should be N-18. We should already haveon hand this information from PP activity. Using this information, please confirm
TMCs last production month and also the kind of model change (ie engine, body,interior etc)
Often, the ability to get information depends on TTC IMPs relation with localTMC. Please strive to make a positive connection.
UNTIL N-10 TTCIMP 2A
3. SET UPMASTERSCHEDULE
3A. MAKE TTC'SMASTER SCHEDULEFOR B/O
PDCA Plan, Do, Check, Action
Make a Plan of required action steps & monitor actual progress against plan.Visualization of any delays and problems that may occur.
Indicate plan timing against each action step in Master Schedule. Send to PJTand related export countries once completed.
Update actual timing of completion, any revision in plan or reasons for delay inmaster schedule. Send updated form to PJT and related export countries on aMONTHLY basis
N-10
MONTHLY
FROM N-10; Bylast working dayof each month
TTCIMP
COORDINATOR
3A
4. SET UPRULE WITHVENDORS
4A. ATTEND LOCALTMC`S SUPPLIERMEETING
Local TMC conducts periodical suppliers meeting for different purposes (ieordering etc), but in some cases, they hold meetings specially to prepare allsuppliers for build out of a particular model/grade. Please make use of suchmeetings to explain our B/O activity.
a. Present & market TTCG's value / role in B/O act ivity to all vendors
b. Explain our requests & intentions to suppliers for B/O activity and get their
important cooperation with the support of local TMC
Follow the check points mentioned in Appendix 4A. Mark completion of eachtasks on form to be send to PJ Leader
N-9 to N-6 TTCIMP
MANAGER
4A
4B. ESTABLISHBUILD OUT RULESWITH VENDORS
Please review for cases where no proper rules exist for daily operation (afterchecking in step 0A)
Make BO agreement with vendors so as to clarify required action, responsibilityand even costs incur at a later stage. We recommend to have meeting withsuppliers.
Using same form in Appendix 4B, update with Final Rule Agreed with vendorsand send completed form to PJ Leader
N-7 to N-6 TTCG 4B
5A-3
SAMPLE
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5. EIGHT Key Steps of B/O Activity3/4ITEM TASK PURPOSE & TASK DESCRIPTION TIMING PIC APPENDIX
5. CONFIRMB/O PARTS
5A. GET B/OPART LIST
FROMCUSTOMER
(VV PARTS)
Identify the BO parts so as to correctly manage orders and stock for these items inorder to avoid any dead stock
TMCs ECI freeze is usually at N-5 thus until that time, BO parts list may be constantlyrevise. Therefore we need to update any changes on a monthly basis until such timing
Send request letter and BO Parts List Format in Appendix 5A -1/2 to customers torequest customers to input required information in Appendix 5A-2. TTCIMP & EXP arealso required to input some information according to color cells mentioned in Appendix5A-2. Please note order of input mentioned at top left corner of the form. TTCIMP tosend completed version to PJ Leader and relating export countries
N-9 TO N-6
MONTHLY
UPDATE
TTCIMP 5A-1
5A-2
5A-3
5B. REQUESTCUSTOMER TO
CONFIRM &FINALIZE B/OPART LIST BYISSUING LOILETTER
LOI (Letter of Intent) is a official letter to suppliers indicating their intention todiscontinue procurement of currently purchased parts.
Request customers to finalize BO parts list by issuing LOI (Appendix 5B) with the sameBO Parts List (Appendix 5A-2) attached Send received information to PJ Leader andexporting countries
N-5 TTCIMP 5B
5C. CLASSIFYAND PRIORITZEIMPORTANTPARTS
Often there are many BO parts thus it is difficult to pay equal attention to manage allparts. It is more practical to select important parts to focus on to increase managementaccuracy based on the following criteria:
a. Expensive parts Higher cost can be expected with occurrence of
dead stock => Higher risk
b. Parts with long lead-time - More difficult to provide accurate forecast /
order to prevent dead stock => Higher risk
c. Common use of parts between models or countries BO parts can be
continuously use for another model / country. No dead stock => Less Risk
d. Parts feature Large parts are more expensive for air shipment, consider
to keep more stock (others like Hikiate, Color etc)
e. Customer Feature Ability of customer to control, capacity etc
However it is still unclear how to set the criteria for important parts. Eg How muchshould the part be to be labeled as expensive part) It may be necessary to discuss withcustomers to decide important parts. PJT is still studying this issue thus it is not requiredas yet for any action. Please see materials for reference. If you have some good idea,please contact to PJT.
N-5 TTCIMP PPT SLIDE
NO 11 & 12
5C
(same form as 5A-2)
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5. EIGHT Key Steps of B/O Activity4/4ITEM TASK PURPOSE & TASK DESCRIPTION TIMING PIC APPENDIX
6. STOCK
TAKING
6A. CREATE & UPDATE
STOCK TAKING FORM
Purpose of stock taking form is to pay special attention during BO timing to
monitor incoming and outgoing (usage) quantity so as to make the mostaccurate possible order / forecast to minimize the occurrence of dead stock
It is recommendable to arrange for monthly meeting with some important/major customers to discuss monthly order and forecast quantity. The checkpoints for ordering are mentioned in Appendix 6A
Using Stock Control Form in Appendix 6A, TTC Exp & Imp has to realize anyabnormalities in stock and adjust to next order qty. Order qty should bediscussed and agreed between exp and imp before order placement. Pleaserefer PowerPoint slide no 14 for check points on ordering
Stock control form has to be checked by managers, taking care especiallyfor priority parts
Stock Control Form should be updated and send to PJLeader and relatingcountries before order timing
N-6 to N+1
MONTHLY
UPDATE
W2
TTCIMP 6A
Power Point Slide14
7. SELFEVALUATION
7A. SELF EVALUATIONOF OWN BUILD OUTACTIVITY
Summarize the result of BO activity to understand own progress / ability andto report to management or Toyota
Report problems or difficulties found which require PJTs attention or support
Develop countermeasures or level up plan for future BO management
Conduct self-evaluation using Appendix 7A. Send completed form to PJLeader
N +1 TTCIMP 7A
8. FINALEVALUATION
8A. PJT FINALEVALUATION OF EACHCOUNTRY AND WHOLEBUILD OUT PORJECTTO BE REPORTED TOTOP MANAGEMENT ORTMC/TMAP
Summarize the overall result of BO activity to report to management orToyota, also to understand each countrys progress / activity
Resolve issues found which cannot be solve by each country
Devise programs to level up management of BO
Final evaluation using Appendix 7A. It acts as basis of further reports that
would be created.
N + 2 PJ
LEADER
&
MANAGER
7A
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6. B/O Activity Schedule OutlineSTEP 8 KEY STEPS CONTENT INFO. ROUTE FORMAT/ATTACHED FILE
0 REVIEW THE DAILY OPERATION IMP/EXP->PJTPJ->IMP/EXP
IMP/EXP->PJT
2 GRASP B/O OUTLINE3 SET UP MASTER SCHEDULE IMP->EXP/PJT
IMP->EXP->PJT
IMP->EXP
IMP->EXP->PJT
6 STOCK TAKING IMP->EXP/PJT7 SELF EVALUATION IMP/EXP->PJT8 FINAL EVALUATION
7A. SELF EVALUATION OF CTRY'S OWN B/O ACTIVITY
8A. PJT EVALUATION OF WHOLE PROJECT
5A. COLLECT & UPDATE B/O PART LIST FROM CUST.
5B. REQUEST CUST. TO ISSUE LOI TO FINALIZE PARTLIST
5C. CLASSIFY & PRIORITISE IMPORTANT PARTS
6A. CREATE & UPDATE STOCK TAKING FORM
2A.GET B/O INFORMATION FROM LOCAL TMC
3A. MAKE/UPDATE TTC'S MASTER SCHEDULE
4A. ATTEND LOCAL TMC'S SUPPLIER MTG
4B. SET UP B/O RULES WITH VENDORS
0A. REVIEW THE DAILY OPERATION (WAREHOUSE & SALES)1A. COLLECT ALL MODELS SCHEDULE INFORMATION FROMTMC/TMAP/TTCG1B. APPOINT COUNTRY LEADER FOR B/O ACTIVITY
1C. SET UP OBEYA ROOM
N+2 7AN+1 7A
N-6 ~ N+1 W2 6AN-5 5A-2N-5 5B
4B 5A-3
5 CONFIRM B/O PARTSN-9 ^ N-6 5A-1 5A-2 5A-3
4 SET UP RULES WITH VENDORSN-9 ~ N-6 4AN-7 ~ N-6
N-10 ~ N+1 3AN-10 2AN-10 1C
N-10 W1 IB
0A
1 PREPARATION ACTIVITY FOR B/OUNTIL N-12 1A
TIMING
UNTIL N-10
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BusinessType
Description Steps
Firm /Crossdock
Customer has FULLresponsibility and risksCust Cust Cust
Customer
Inventory
Stock is kept and managedat TTC warehouse howeverit is owned by customer
Cust Cust TTC
FirmInventory
Customer takesresponsibility of orderinghowever TTC owns andmanages the stock at TTCwarehouse
Cust TTC TTC
Stock /
Inventory
TTC has FULLresponsibility and risks
TTC TTC TTC
TTCRES
PONSIBILITY
7. Scope of Activities according to Biz Type
RESPONSIBILITY
0A 1A 1B 1C 3A 4A
5A 5B 5C 6A4B
2A
7A 8A
0A 1A 1B 1C 3A 4A
5A 5B 5C 6A4B
2A
7A 8A
The level of B/O activities required varies according to Business Type
TTCs responsibilities & RISKS increases from Firm Biz to Stock Biz thus a higher
level of attention is required as we move down the chart
*Cust = Customer
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8. STEP V. Confirm B/O Parts1/2
5C. Classify & Prioritize Important Parts (N-5)
BASIC IDEA When there are MORE than 30 B/O parts per import country,PRIORITISATION is necessary !
Before classification, please ensure
you have collected below required
Information mentioned on
[22-9 BUILD OUT PARTLIST]
DDP Price
Estimated Monthly Amount
Common / Unique
(for country & model)
Leadtime
eg JP->TH->AR->VE
Large / Heavy Parts(expensive for storage & air freight)
Please use previous form for
BUILD OUT PART LIST
for scoring. See [22-9]
(How to score)
POINT 1 2 3 4 5
DDP Price/ USD Below 0.5 Below 1 Below 5 Below 10 Higher than 10
Monthly Amount /Below JPY 100,000 JPY 300,000 JPY 500,000 JPY 700,000 Above than JPY 700,000
Car model MULTI EXCLUSIVE
Import country MULTI EXCLUSIVE
Lead time / Below
Order date -1st ETA20days 30DAYS 45days 60DAYS More than 60 days
Large/heavy parts Normal parts Large/heavy parts
Volatile fluctuation 20% 40% 60% 80% 100%
Stock Days /Below 7days 15 days 30 days 45days More than 45 days
(Example)
PARTS Part 1 Part 2 Part 3 PRIORITY POINT
Price 2 5 1 A 0 -1Monthly Amount 3 5 1 B .0-
Car model 1 5 1 C .13-9
Import country 5 5 2 D 8- 0
Leadtime 1 4 1
Large/heavy parts 5 1 1
Volatile fluctuation 1 2 3
Stock Days /Below 1 2 1
TOTAL 19 29 11
PRIORITY B C
HOW TO JUDGE PRIORITY OF PARTS
Price /
Monthly volume
Lead TimeStock Days
Exclusive
Judgment
of Priority
CONCEPTONLY
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8. STEP V. Confirm B/O Parts2/2
5C. Classify & Prioritize Important Parts (N-5)CONCEPTONLY
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9. STEP VI. Ordering Check Points
1) TTC Imp has to do stock simulation based on latest monthly order quantity
2) TTC Imp has to check if the above simulated stock as of end of last production month is ok3) TTC Imp has to give zero forecast in orders corresponding to after last production month
4) TTC Imp has to check if the fluctuation ratio is accepted by supplier
1) TTC Imp has to adjust the order quantity in system so that there is no late shipment due to Heijunka allocation. In case
it's impossible to adjust by system, TTC Imp shall discuss with TTC Exp to issue manual order.
(This is very important step. If there's any problem, please discuss with PJT)
2) TTC Imp has to place zero order quantity for all future months
3) TTC Imp has to check if the order is following order lot (if Exp country didn't accept special request)
4) For pair parts, TTC Imp has to check if the quantity of pair parts is same (if Exp country didn't accept special request).
TTC Imp will confirm with TTC Exp the last additional order timing, based on supplier's production lead time
and shipping schedule
1) If TTC import needs to place the additional order, need to inform the clear dead line for last production.
2) If lead time is very short, TTC imp needs to send the Rundown to avoid the dead stock.
3) If there was additional order, TTC Imp must input the additional order qty to rundown sheet as well.
LAST
ADDITIONAL
PO
LAST
MONTHSPO
ORDERS
FROMN-6