Freedom & QAD Implementation at TST NA Trim

MWUG – September 2013

TS Tech Global Locations

Company BackgroundName: TS TECH CO.,LTD.Founded: December 5, 1960Headquarters: Saitama, JapanPresident: Michio InoueEmployees: approx. 15,000Main Business: automotive seating, interior trim

Worldwide Locations

Company Loc. Launch DateTS Tech (Thailand) Co., Ltd. Thailand, Saraburi May-2003

TS Tech Americas, Inc. U.S., Ohio Mar-2004

TS Tech Alabama, LLC U.S., Alabama Mar-2004

TS Tech Canada Inc. Canada, Ontario May-2004

TS Tech USA Corporation U.S., Ohio Aug-2004

Guangzhou TS Automotive Interior Systems Co., Ltd. China, Guangzhou Feb-2005

Guangzhou Tech Interior Manufacturing Co., Ltd. China, Guangzhou Jul-2006

Trimont Mfg. Inc. Canada, Ontario Apr-2007

TS Tech UK Ltd. UK, Swindon Sep-2007

Wuhan TS-GSK Auto Parts Co., Ltd. China, Wuhan Oct-2007

TS Tech Indiana, LLC* U.S., Indiana Apr-2008

Ningbo EPZ TS Trimont Automotive Interior Inc. China, Ningbo Jul-2008

Ningbo FTZ TS Trimont Automotive Interior Inc. China, Ningbo Jul-2008

TS Tech Trim Philippines, Inc. Philippines, Biran Laguna Dec-2009

Industrias Tricon de Mexico, S.A. de C.V.* Mexico, Tamaulipas May-2012

TST NA Trim LLC* U.S., Texas Feb-2013TS Trim Industries U.S., Ohio Feb-2014 (plan)

TS Tech Group Companies Using QAD

*Sites using Freedom ErrorProof

QAD Footprint at TS Tech in North America

Boaz, AL

Nuevo Laredo, Mexico*

Hidalgo, TX*

Irapuato, Mexico

Newmarket, ON

Reynoldsburg, OH (2)

Athens, OH

New Castle, IN*

TST NA Trim Company Profile

• Established: March, 1986　　　　　　　　　　　　　• Plant Manager: Francisco Lopez• Plant Size: 17,915m2 • Products: Seat covers for Honda and Acura

Nuevo Laredo Plant

Hidalgo Plant

• Established: April, 2012• President: Hiroshi Kitamura• Plant Size: 12,449m2

• Products: Laminated fabric and UL for Honda, Acura, and Mazda

Business Case for QAD at Hidalgo

• Simple process– 3 components per BOM (vs. 10-20+)– 1 step process (vs. 3 steps)– Straight line (no WIP)– No system interface (e.g. production monitoring)– No KD lot numbers

• Young operation– Low transaction volume– Small number of associates– Bad habits not established

• Small scale– 11 suppliers– 62 RM parts– 126 FG parts

Item Nuevo Laredo HidalgoNo. Suppliers 58 11

No. RM Parts 1,095 62

No. FG Parts 624 126

Need to implement

quickly -- less than 6-month

window

Background of Lamination Production

• What is flame lamination?– Three-layers (face, foam,

backing)– Semi-continuous process

• High product quality expectations– Incoming quality inspection

• Measure net roll length• Check for spots or runs

– Outgoing quality inspection• Measure final length of

material• Re-check for spots, runs, de-

lamination

FaceFoam

Backing

Not to scale

Differing Lengths…

Trailer Yard

Production Area

Offices

Shipping & Receiving Office

Receiving Inspection

FG Inventory Racks Raw Material Racks

2nd Foam Staging Area

Shipping Area

Main Entrance

N

Hidalgo Plant Layout

Shop Floor Operations

Raw Material Racks

Finished Goods Racks

Production Process

Foam Roll Storage

Problem Statement

• No perpetual inventory• All record-keeping performed in MS Excel

– Not scalable– Lack of data entry validation– Data integrity concerns

• Time-consuming financial closing process due to manual record-keeping

• Time-consuming physical inventory process• Difficult to consolidate financials at corporate level

A Powerful Tool…

Excavator

Shovel

(damaged fiber-optic conduit)

Special Considerations

• RM serialized by vendor – Not license plate; no guarantee of

uniqueness• FG labels generated by internal QA

inspection system (SQL database)• FG quantity varies based on inspection

result– Deductions for quality defects

• For shipping, actual length of rolls does not necessarily match the order quantity – Order quantity must be met, but slight

overshipment allowed (max. one roll per item)

• 24-hour aging period after inspection

Why Freedom?

• Ensure accurate inventory control through real-time scanning• Efficient scanning by label serial• Faster tag inventory• Serialized traceability of material• Ensure accuracy of business processes

– Receiving: validation against ASN– Shipping: picklist control; backflush validation

• Integration into final quality inspection system• Potential for future introduction of full traceability system• History of successful inventory control at Nuevo Laredo plant

Implementation Timeline

Task Area

2012 2013

Aug Sep Oct Nov Dec Jan FebProject initiation

Business process design

Statement of work creation

EP Development

Semi-static data loading

User training

CRP and testing

Go-Live support*

*Freedom on-site for 2 weeks, then remote supportGo-Live!!!

Firs

t Phy

sica

l

Project completed on-schedule and within budget

Design of Processes

• Step 1: Document current process state

• Step 2: Identify risks and controls

• Step 3: Apply best practices to future process (re-engineering)

• Step 4: Review and obtain buy-in

QAD Environment

• QAD Version: 2011 SE, Automotive Bundle• Progress Version: 10.2B• OS: Linux Red Hat ver. 5.8• Freedom Version: 7.70• Server (QAD): VM Ware (remote, in Reynoldsburg)• Server (Freedom): VM Ware (remote, in Reynoldsburg)• Other QAD Partners at Location:

– Report Writing: Cyberquery ver. 3.50 – Uploading of PO Shippers, Customer Schedules: SIG Connect ver. 4.1A– EDI: Gentran 4.0.02

• Repetitive scheduling (not discrete work orders)

Processes Using ErrorProof

Physical Inventory

Receiving

Location Transfer

Backflush

Scrap

Shipping

Cycle Count

•Count by label serial

•Picklist print•FIFO lookup

•ASN receipts•Transfer by label serial (license plate or reprint)

•Transfer by serial•WIP transfer•Relabeling

• Interface w/QA inspection system

•Unplanned issue

•Tag inventory•100% scanning

Freedom Application Details

• ErrorProof Small Site License (max. 10 users)

• Installed on virtual server, hosted at Ohio data center

• Labels print to wired and wireless printers• Telnet sessions on handheld scanners

(7 scanners)• Desktop application for generating picklist• Administrator application on Windows

– Daily reports (even Production Manager) – Inventory tag printing

Challenges and Lessons Learned

• Modifications needed to in-house developed final inspection database– Duplicated serial numbers, no indexes in tables

• Supply base not 100% controlled by company – Difficult to convert suppliers to required label format (license plate)– Over 50% of suppliers not EDI-capable (or willing)

• Only 1 in 4 customers using ERP/EDI– Customer requirements must be hand-keyed

• Success factors: – Thorough review of current and future processes– Daily wrap-up meetings– Production management heavily involved and using reporting tools– Accumulated experience of implementing Freedom and QAD at other trim facility

Inventory Variances After Launch

Nuevo Laredo Hidalgo

Month 1 Month 2 Month 3 Month 4-10

-5

5

10

15

20

25

-4

-8

2

-7

15

20

4

9

Net Variance Absolute Variance

$1,000s

99.8% accuracy!!!

Q&A

Thank you for your attention!