For Production Line to be maintained and updated

Procurement proposals
February 9, 2020

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Proposal summary2

To repair Equipment

PreventivemaintenanceTo update Equipment

Procurement at thereasonable priceTo procure Spare partsand consumables

Optimal inventory

New technology
introduction(Software / hardware)

Procurement at thereasonable price✓ To keep stable
operation✓ To reduce any cost

To collect an investment
cost in a short period oftime=> good ROI

Feasibility Study3

To solve Issues
To perform preventive maintenancebased on failure analysis.
To estimate equipment life.

Optimal inventoryof maintenanceparts andconsumables

To build a purchase price database forequipment and parts to perform priceanalysis.

Purchase at areasonable priceTo analyze past approval documents andverify the ROI (Return on Investment)

Quantitativeevaluation of ROI

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Optimal inventory of
maintenance partsand consumables

5Application ofartificial intelligence

Data Cleansing

Data Analysis

Digitize(Paper file)(server)to find a causal relationship between cause and failure

Implementation on thefactory production line
What effects are expected?

Failure analysis(Analysis from maintenance data)

Defective product analysis(Analysis from inspection results)

・to Increase yield
Which part is critical in failure?

Which process produces defective products ?
・ to reduce inventory parts

What is the major cause of failure?

What is the cause of defectives?

Are there any idea for preventive maintenance ?

Are there any idea for reducing defectives?

Life expectancy
6Supplementary explanation• It is necessary to build equipment maintenance information.
• By analyzing maintenance information, it is possible to predict the life ofindividual equipment and to analyze failures.
• Too much parts and consumables in stock cause inventory costs and thesequantities should be reduced and optimized, within a range of continuous
stable operation for production lines.
• The visualization of inventory parts is recommended not only for storage
volume but also for delivery date.

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Purchasing Equipment andParts at the reasonable price8

It is impossible to see what the person in charge has read and what kind of
criterion is used to determine the price from the quoted price (negotiationfor price reduction) and determine which supplier is the best.

analysis

Data collectionDatabase
Implementation

To collect past data and store it in adatabase. To analyze it and find trends andcharacteristics

Seeking a reasonable
price with artificial
intelligence9Supplementary explanation
The purpose is to make a proper evaluation of the quoted price.
•••

A database of past purchase results is implemented to evaluate suppliers’ quoted
prices, using artificial intelligence, where “past purchase data” and “ the tacitknowledge of the person in charge” have been incorporated.
The appropriate price for supplier A (100) will be proposed at 150, assuming a
reduction in purchasers. You can negotiate to get this to 100 (but any buyer does
not know that it is 100 without data analysis). If you do not collect more than twoquotations, you will negotiate the price with a single supplier, because you cannot
compare with other quotations. In most cases, the amount to be reduced is up tothe supplier in good faith (without any reasonable reduction policy).
In fact, you might have been able to purchase a little cheaper, and this pricereduction negotiation is a burden on the person in charge. (Because it is not asimple calculation but a negotiation based on intuition and experience) If so, you
should create a mechanism that automatically analyzes the know-how of theperson in charge and the past data on which it is based, and calculates the priceautomatically. This makes it easier to negotiate (because price negotiations are
based on historical data).

10Quantitative evaluation ofROI (return on investment)11

To gather information on past requests for approval and to verify the returnon investment. => A quantitative evaluation method of the return oninvestment will be established.

analysis

Request for approval
information collection

Database conversion

Collect past data and store it in a database.
Analyze it and find trends andcharacteristics

Establish an investment
return evaluation method.
Establish requirements forapproval documents for eachfacility.
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Supplementary explanation
••

•

•

•

When introducing new equipment or technology, we usually collect quotes (priceand technical superiority) from suppliers and prepare a draft decision. When theapproval is obtained, the purchase procedure is completed, and the procurement
department negotiates the price. (See the previous slide)In this case, the difference from the normal equipment replacement is that the oldequipment is still used but is replaced because the production capacity orproduction efficiency are expected to be improved.
Therefore, the return on investment for the new technology introduction isrequired, but the quantitative evaluation method is not generally defined.
(Created by the person in charge each time)
The solution is as follows:– Creates a database of past requests for approval and simultaneously verifies
the return on investment.
– At the same time, we will build a quantitative evaluation method of return oninvestment.
If these are stored in the database, the person in charge can select similarequipment and technology from the database and explain it to the decision-makerin a rational manner.
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