SYSPRO helps Toyota Tsusho Steel Centre sustain waste elimination philosophy

The Toyota associate manufacturing company reaps the benefits of deploying SYSPRO to manage its financial, manufacturing and distribution operations...

Toyota Tsusho Steel Centre Australia (TTSCA) is an associate company of Toyota Tsusho Japan, established in 2004 to process coil steel and produce interior and exterior automotive body blanks.

Using state-of-the-art press machinery sourced from Japan, TTSCA supplies flat “blanks” to Toyota Australia, which in turn presses these shapes into door, roof, chassis and other car panels.

TTSCA adds value for Toyota Australia by improving raw material yields and supply chain efficiency, maintaining stringent quality control, and adopting Toyota Production System techniques to minimise inventory levels. Additionally, by eliminating some of its in-house “blank” pressing, Toyota Australia has gained additional capacity within its own press shop.

Exception solution required for complex manufacturing
The scale of the manufacturing operations is not only complex, it is a massive undertaking.

The blanking line alone required an AUD$15 million investment and involved the set up of a coil feed line with a series of rollers and levellers, a Komatsu press and purpose-built stacker to accumulate the parts into Kanban packs.

Around 100 different shapes and pieces are produced with the capacity of 500 pieces per day.

TTSCA sources “master coils” from steel mills weighing up to 25 tonnes each, and ranging in size up to just under two metres wide.

These coils are unrolled then cut and pressed into flat “blanks” of curved, trapezoid, die shaped or square pieces of metal; and then on-sold to Toyota Australia.

With such a sizeable investment, a key challenge is to maintain optimal efficiency at all times so a functionally rich and flexible ERP solution was required.

SYSPRO selected due to broad functionality
SYSPRO was selected to help TTSCA manage its financial, manufacturing and distribution operations, with implementation beginning in December 2004 and going live in July 2005.

Chris Fissenden, then finance manager for TTSCA, had responsibility for selecting the ERP system.

He said at the time: “We started by looking at the hardware and software side; then ranked these. SYSPRO’s real strength was its flexibility in manufacturing and distribution.” 

Crucially, Toyota Australia operates on a just-in-time (JIT) and Kanban system – using it to ‘keep working to a steady beat’. Kanban is a Japanese concept where stock is replenished as it is used - so suppliers must react and respond to real production needs and not predictions or forecasts.

Working this way eliminates spikes and troughs and is how working capital is regulated. When one Kanban card is “posted” as empty, it triggers the next inventory supply, since Toyota needs to receive parts continuously to maintain optimum production.

Gulsum Dunderdale, finance manager for TTSCA said: “This underpins Toyota’s whole philosophy, which is about eliminating “muda” or waste.  It is premised on continuity or pull at the other end - working to a steady beat.”

SYSPRO has an e-Kanban capability, so TTSCA will soon operate electronic Kanbans replenished by bar-coding to track product movements.

“The need for us to be a flawless supplier in the automotive industry is clearly apparent. There are 118 parts that need to be supplied. We mirror Toyota Australia’s production cycle so the assembly line cannot stop,” said Dunderdale.

Implementation process key to success
SYSPRO's implementation (channel) partners were crucial to the process, particularly with the auto industry focus on quality assurance and product life cycle.

“AR Consulting (Vic) Pty Ltd (ARC), the local implementation partner and their efforts in outlining specifications, piloting, and project management gave us a chance to review what was needed and get it pretty much right the first time,” said Fissenden at the time of implementation.

The benefits of SYSPRO
ROI was not officially measured, however Dunderdale said: “The SYSPRO implementation would have paid for itself within 18 months.”

SYSPRO’s “Lot Traceability” module is an important factor in the success of the implementation because the auto industry demands high levels of quality assurance and ISO requirements. If there is ever a need to recall product, it is important to be able to trace panels back and identify where the steel has come from – which SYSPRO easily handles. 

TTSCA’s focus for success relies heavily on achieving superior inventory tracking. Dunderdale commented: “SYSPRO has great lot and pack traceability which is essential for us to plan our business and achieve optimum production scheduling. If we don’t have a clear understanding of exactly what we have, it means we’re losing money because we’re over-ordering or ordering the wrong thing.”

The stock take area of SYSPRO is also working extremely well. Dunderdale continued, “Stock take is very good in SYSPRO – I haven’t seen it working this well in any other program. It’s a big issue for us because we stock take every month. We’re not losing anything from our adjustments because we can view every detail. We have different coil tonnages which provide maximum efficiency for different jobs. SYSPRO helps us identify the most efficient tonnage and as a result has improved our profitability and efficiency.”

Another major benefit of SYSPRO is that it provides a complete package so there is no need to source additional functionality like EDI or bar-coding from third parties.

As well, the proven .NET platform is important because it enables the system to be kept open for communicating with both Toyota Australia and its steel mill suppliers.

“SYSPRO allows us to minimise the customisation needed to communicate with other interfaces – such as with Toyota Australia or our bank,” said Dunderdale.

“We have ownership of supplying the blanks to Toyota Australia. We can lead the connectivity without the angst of linking with other interfaces. Additionally, SYSPRO provides the ability for us to report back to our parent company using different charts of accounts.”

What the future holds
Toyota is renowned for quality and with the operational success experienced by TTSCA, there may be expansion to supply other car manufacturers in the longer term with an additional line to provide additional capacity.

Dunderdale said, “With the new line, we won’t have to reinvent the wheel. We know the system and how it works, so it will be very inexpensive for us. The value of SYSPRO to our organisation is immeasurable and it will easily extend to another line when we expand.

“We would also like to showcase TTSCA in Australia and the SYSPRO ERP system to other Toyota companies. What we’re doing in Australia is unique in terms of processing capability and automation of processes.”

For more information

Roslyn Young
Marketing Communications Manager SYSPRO – Asia Pacific
Ph: +61 2 9870 5555
E: roslyn.young@au.syspro.com
W: www.syspro.com.au

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