Results

SKOPE INDUSTRIES

CLIENT

Commercial food service and corporate refrigerators. Domestic, commercial, and industrial electric heating.

ISSUES

    • Large corporate jobs consumed capacity at the expense of growth markets

    • High WIP and slow production flow

    • No clear measure of day-to-day profitability

    • Purchased parts not available when needed

actions taken; changes made

    • On-site consulting project

    • Installed constraint-based scheduling

    • Installed replenishment inventory management system

    • Implemented throughput accounting measures

Measure Pre Post Change
Constraint capacity 6,000 18.000 ↑ 300
Throughput $80,000/day $150,000/day ↑ 88
Work-in-progress (WIP) $1.1 million $0.6 million ↓ 45%
Lead time 10+/‐ 2 4+/‐ 1 ↓ 60%
Profitability information Monthly (12 p.a.) Daily (240 p.a.) ↑ 2000%

client feedback

“We now have much clearer visibility of both processes and flow of money.” – Guy Stewart, MD.

“The issues stand out like dogs’ balls.” – bloke on the factory floor.

“Decisions are now easier because we have quick and clear indicators of the impact of any changes.” – Bruce Vine, manufacturing manager.

barker FRUIT PROCESSORS

CLIENT

Fruit fillings (for commercial and industrial bakers). Sauces and jams (for retailers).

ISSUES

    • Alignment of management team responses to issues

    • Identification of possible stock-outs

    • Customer service responses

actions taken; changes made

    • On-site consulting project

    • Installed constraint-based factory scheduling and replenishment

Measure Pre Month 6 Change
Factory lead time 14‐21 days 6‐8 days ↓ 60%
Finished goods inventory $850,000 $700,000 ↓ 60%
Time value of inventory 6 weeks 4 weeks ↓ 30%
Margin $ shipped $650,000 $880,000 ↑ 35%
Orders delivered on time 70% in full* 85% in full* ↑ 20%

* Order lines shipped on time was about 97% and increased slightly

client feedback

Note: As a privately owned business limited results can be printed here.

“Old planning boards looked 2-3 weeks ahead and were always being re-planned – now, what we plan is what happens…very simple, very visual.”

“Normally Jul-Dec is a very busy time; stock-outs and panic would increase, and we would fall behind… This year we are not behind, and the pressure is now on the sales team.”

“Now the warehouse knows reliably what is coming and when, and purchasing has become so simple that production could probably do it.”

RYAN GROUP

CLIENT

Specialist manufacturers and installers of all glass products and aluminium glass frames.

ISSUES

    • Site management believed factory could not cope with another 20-30%

    • MD frustrated by cost accounting

actions taken; changes made

    • On-site consulting project

    • Installed constraint-based scheduling and buffer management

Measure Pre After 4 Weeks After 1 Year
Factory output Less than $5,000 Over $10,000 $12,000 – $14,000
Lead time 7 +/- 9 days 2 days 2 days

client feedback

“Within a month the factory had proved it could run more than twice as fast… then they run out of orders!”

“Weeks 16-20 after the project installation by ViAGO we were building up to Christmas – and the factory coped with comparative ease… a year on and the factory runs at the speed of the market, with low stress.”

“It’s all so obvious…now!” – Chris Ryan, director.

“(Implementing the ViAGO project) has probably been one of the better business decisions we’ve ever gone down the track on.” – Chris Ryan, director.

“Blood pressure has actually come back to a normal heartbeat and the day-to-day dramas that come to you; you actually have a better way of facing them. You can plan your attack, rather than continually playing defense.” – Chris Ryan, director.

MACKIES GROUP

CLIENT

Commercial bakeware and food processing equipment.

ISSUES

    • Profitability unsatisfactory and variable

    • High WIP inventory / poor stock runs

    • Local sales declining

    • ‘High waste’ and ‘overtime’ part of culture

    • Dissatisfied customers

    • Owners want to retire and hand over a long-term sustainable business to their ‘kids’

actions taken; changes made

    • On-site consulting project

    • Installed constraint-based scheduling, buffer management and throughput accounting

Measure Pre After 6 Months After 1 Year
On-time delivery 40% 70% 80%+
Work-in-progress (WIP) $700,000 $350,000 Steady
Factory lead time – baking tray line 18-22 weeks 4 weeks 2-4 weeks
Factory lead time – pan line 8-10 weeks 4 weeks 2-4 weeks
Capacity 0% 15% 25%
Finished goods >$1 million >$600,000 >$400,000

client feedback

“ViAGO and its TOC implementation has been the greatest achievement of the Mackies Group of Companies, in the modern era of its 60-year history.” – Jeremy Woodcock, MD.

CUDDON LIMITED

CLIENT

Freeze driers, irrigation solutions, agricultural engineering, refrigeration (project-based manufacturing combined with jobbing work).

ISSUES

    • Unreliable delivery dates

    • Insufficient production rates of freeze driers

    • Priorities unclear

    • High stress levels (especially just before deliveries)

actions taken; changes made

    • On-site consulting project

    • Installed critical-chain scheduling

    • Installed buffer management and throughput accounting

Measure Pre Post Change
Freeze dryer production rate: FD 80 model 5 in 20 months 7 in 9 months ↑ 211%
Freeze dryer production rate FD600/1000 model 4 in 20 months 4 in 10 months ↑ 100%
Profit     ↑ 20%
Delivery dates Unpredictable, unreliable, delays Predictable and reliable  

client feedback

“The Critical Chain scheduling has vastly improved the manufacturing control of projects by shortening delivery times; therefore, units built per year improved.” – Wayne Nicholas, financial controller.

“Been looking for years for computer software that could do what this system can do with some simple boards.” – Gerard van Antwerpen, design engineer and QA manager.

A W FRASER

CLIENT

Manufacturer and exporter of machined bronze and brass components.

client feedback

“A year into Theory of Constraints implementation at Frasers makes me reflect on how massive a culture change we have implemented across our organisation. I had always wondered how it would be to start a business and develop all of the systems needed to run it efficiently. Most of us start in a business that has already been operating and has gradually built up its systems. The most we do is to implement a new computer system which causes us to change some of the administration procedures.

With the implementation of TOC, I have now experienced what it is like to redesign literally all of the systems needed across the company, right down to the fundamental way in which we measure our output. It is interesting to be asked to reflect on such a massive business transformation. For us, TOC is even better in hindsight than when we embarked on the project.

We were about to turn on a new ERP system, we had spent a fortune on it, and it was state of the art – the best system we could buy, but it was a planning system and we couldn’t understand how we could get it to work in an environment as variable as our factory. We had all the problems of breakdowns, absenteeism, running out of materials, all of the things that trip up the rigid plan that our ERP system would produce. The drum, buffer, rope theory of TOC was our saviour. It recognised and helped us manage the variability and focused us where we needed to focus. Its implementation is one of those hindsight things that seem even better as you reflect them.

As we talked with ViAGO about other implementations of TOC that they had done, they often talked of people faltering six months or a year in. I was confident that we would be able to avoid this. Unfortunately, my confidence was misplaced. Our implementation was so successful that we got stuck on the measures and the systems we had put in place. In solving our problems, we had moved on from the need for some of those measures, but we couldn’t let them go.

It was after a day of stimulation by the ViAGO team that we recognised and resolved to solve this dilemma. Interestingly the dropping of some measures and the development of others was like another adrenalin injection into our business. This makes me suspect that we will never stop our implementation; we will always be changing, always developing. It is just the start of a journey that is giving us the ability to continually raise our aspirations. What did these mean for us in numbers? A 20% lift in output and sales this year, in what is considered a mature business. And next year?” – Gordon Sutherland, CEO.

G W SCOTT AND ASSOCIATES

CLIENT

Chartered accountants.

client feedback

“We have now got around 6 months results from the TOC system and realistically, I think the first two months were catching up. For the first six months of 2007 financial year, charge-out is up 22%. This time last year our filing % with IRD was 34%. We are now at 47%. A 38% increase.

    • The real change has been in the less measurable things.

    • We are not getting hassled by clients asking where their accounts are.

    • The team is not feeling as stressed or overwhelmed. Instead, we feel in control.

    • We are truly working as a team.

    • It is easy to see where the problems are.

    • Systems can be changed to deal with recurring problems

    • We can easily fit in “rush jobs”.

    • We can give completion dates with some reassurance

    • Turnaround of accounts is faster.

    • We can see which team members are under pressure and either help them out or give them space.

    • Despite putting more chargeable work through, team members have also found time to begin setting up other projects, such as our administration and Profit-Optimiser.

Several clients commented on how much quicker the accounts have come back this year.”

Graham W Scott, November 2006

Partner

G W Scott and Associates Ltd.

P.S.

“The TOC system is our office manager, everyone knows what the priority is, they are all helping out each other and there are no hierarchy issues.” – Graham Scott.

“I haven’t worked a weekend in 18 months, I’m ahead on percentages, took lots of time off last week to take care of a sick child and wife, I’m having a 5-day weekend next week over the school holidays and I don’t have any trouble attracting staff to work in my low-stress environment.” – Graham Scott.

 

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