Case Study Summary
Iwate Toshiba, a semiconductor fabricator located in Kitakami City in northern Japan, operates one of the most complex manufacturing environments in the technology industry, producing 25 million components monthly across 3,000 product lines including microcomputer chips and CCD optical sensors for scanners. The company faced typical semiconductor industry challenges including volatile demand, complex product mix, short product life cycles, and the need to schedule up to 400,000 lots daily during peak production periods.
Despite this complexity, Iwate Toshiba was still relying on manual production plans that took eight hours to develop, creating bottlenecks and limiting customer responsiveness. In 1997, the company implemented Eyelit Technologies’ advanced planning solution, achieving remarkable results including 30% improvements across multiple key metrics and 50% reduction in planning time, while enabling twice-daily production planning cycles that dramatically enhanced customer service.
The Challenge
When Iwate Toshiba, a semiconductor fabricator in northern Japan, started searching for a supply chain solution to resolve its myriad of production problems, it found exactly what it needed in Eyelit Technologies’ supply chain planning suite.
Based in Kitakami City, this high-tech giant faced the Herculean task each month of streamlining production of 25 million components to build 3,000 product lines, including microcomputer chips and CCD optical sensors for scanners. Its challenges were typical of the semiconductor industry: volatile demand, a highly complex product mix, short product life cycles, and long planning periods for production.
To resolve recurring production issues and improve customer responsiveness, Iwate Toshiba sought a supply chain solution that could do the following: quickly plan and schedule as many as 400,000 lots a day during peak production, provide accurate order commitments to customers, reduce the lengthy planning cycles for production, optimize its use of production resources, and achieve a more accurate supply chain model by integrating business planning with factory level scheduling.
Despite enormous complexities, Iwate Toshiba was still relying on production plans developed manually over eight hours at a time. As orders increased in number and complexity, however, the planning process was unable to keep up, and the production plan itself could not respond to changing customer demand or absorb the impact of scheduling and execution changes on the factory floor.
Iwate Toshiba tried to switch from monthly to daily planning to improve customer responsiveness, but the complexity and magnitude of calculations required to satisfy the new demand taxed the company’s resources to the limit. The old production model fell apart, and Iwate Toshiba suffered production setbacks that seriously impacted customer deliveries.
The Eyelit Technologies Solution
In 1997, Iwate Toshiba selected Eyelit Technologies MES solution to improve the accuracy of its production planning and resolve recurring delays and inefficiencies, citing its superior speed, finite capacity planning, and accuracy in modeling inventory during demand planning.
Immediate Speed Improvements
Eyelit Technologies MES solution’s speed was immediately apparent, shrinking the time required to complete a four-month production plan by 50 percent from eight hours to four hours. Iwate Toshiba now runs production plans twice a day – once in the afternoon and again at night – dramatically improving its responsiveness to customer orders.
Accurate Equipment Modeling
Eyelit Technologies MES solution also helped Iwate Toshiba accurately model the use of its factory equipment. Historically, the company’s master data had been flawed (e.g., a piece of equipment capable of producing only 20 pieces per day was recorded instead as “capable of 30 pieces per day”).
With Eyelit Technologies MES solution, actual production numbers on hundreds of pieces of equipment per line were fed to the master model to ensure greater data accuracy. This process continues today as procedures are introduced, removed, or substituted to reflect new efficiencies, enabling Eyelit Technologies MES solution to generate an accurate production plan at all times.
Factory Floor Integration
With the integrity of the production plan ensured, the company also turned to Eyelit Technologies MES solution for reliable job sequencing on the factory floor. To keep production on track, Eyelit Technologies MES solution generated a detailed operational plan that sequenced jobs across all plant resources, adjusting to unexpected events such as machine outages, inventory shortfalls, and labor shortages.
Advanced Scheduling Capabilities
Finally, Iwate Toshiba leveraged Eyelit Technologies MES solution’s powerful planning algorithms to resolve tough scheduling conflicts. Through Eyelit Technologies MES solution’s flexible business rules, Iwate Toshiba created a prioritizing system to ensure no miss deliveries to high-priority customers, allowing production plans to be drafted by lots (instead of by individual products), while improving the accuracy of calculations.
The system also enabled the company to check actual produced quantities against pre-determined targets, dynamically re-allocate work-in-progress based on changing demand, and make adjustments to the production plan when necessary.
Customer Testimonial
“Eyelit Technologies is fast – this is number one,” Sugimoto said. “[We also liked] Eyelit Technologies’ ability to perform detailed and precise capacity planning – something that our prior system could not do. By using the Eyelit Technologies MES solution, our efficiency has improved dramatically.”
Tsuyoshi Sugimoto, General Manager of Toshiba’s Information Systems
The Results
With Eyelit Technologies MES solution, Iwate Toshiba transformed its supply chain and manufacturing processes for greater agility in meeting demand, thereby boosting responsiveness to customer orders.
To date, it has achieved:
- 30 percent increase in planning accuracy
- 30 percent reduction in inventory
- 30 percent increase in production throughput and efficiency
- 50 percent reduction in time needed to generate a production plan
Iwate Toshiba expects these performance metrics to continue to climb.
The implementation demonstrates the power of defining a precise digital twin of a fabrication line through very advanced technology, enabling semiconductor manufacturers to achieve unprecedented levels of operational efficiency and customer responsiveness.