TOCICO

We applied the TOC replenishment solution to the supply chain providing goods and services into the passenger cabin. It is a $500M per year supply network with chronic issues with delivery performance and inventory. We have achieved first pass order fulfillment increased from 85% to above 95%, supplier lead-time reductions of 30-80%, inventory reductions of 20-50% depending on items and sources, expediting and cross shipping reductions of 80%, 70-80% reductions in item expirations and obsolescence. The project was officially launched in June 2016 and has taken 18 months. Not the speed TOC experts would expect but time expanded as a necessity with buy-in and commercial agreement realities. Every implementation has unique adaptations and difficulties. There were 4 major problems we overcame that would be of help to others in similar situations. 1) We had outsourced all of our supply chain to a 4PL who further outsourced to 3PLs. This made for a very long and difficult buy-in. The end solution turned out to be simple. 2) There was no information system in place that understood inventory planning and management with buffers and consumption-based ordering. 3) We were bound by legacy commercial agreements based on the cost world assumptions that thwarted throughput. This required us to be very creative. 4) We needed to make significant routing changes for inbound shipments from overseas. While the changes were not out of the ordinary, gaining buy-in of all parties and working through the details of how it would work ran smack into the first three problems. Involving our customer entities (individual caterers and cabin provisioning organizations) into the solution required us to engineer very simple processes. My colleague Angela Cain and I, led the whole project from initial buy-in through funding, design, implementation, and onto its current success. Angela will be a co-presenter. She had zero TOC knowledge when joining the project but currently leads all aspects. This would be a great perspective for those less familiar with TOC. Video length: . PDF: slides.