About this Presentation
This presentation describes a case study of a vinyl cover stock manufacturer. Products are used in automobiles and industrial applications. Two large equipment, capital intensive V-plants produce revenues of $250 million. Business issues include a large order backlog, high expedited freight, marginal corporate profitability, large capital investment, aging and poorly maintained capital equipment, seasoned and senior leadership team with new, young president (daughter of chairman and owner), and recently reduced work force in both facilities. The presentation describes the TOC journey and results. The core conflict for the automotive supply chain preventing it from making more money is the focus on the requirement of satisfying the end customer by implementing rules that satisfy this need versus the requirement that each link in the chain optimize its operations by letting each link establish rules to minimize its cost (for example). This conflict dictates that the automotive release (push) system is used throughout the automobile industry. Lessons learned include: don't implement TOC applications in isolation – understand the overall industry and consider the company’s role in its supply chain – holistic application; don't ignore previous decisions the company has made that have yet to impact the organization; make sure the leadership team can make the journey – it takes 3 to 6 months to get a new VP up to speed; and don't let your own pride prevent you from changing the direction of the solution.
What Will You Learn
To help you get the most value from this session, we’ve highlighted a few key points. These takeaways capture the main ideas and practical insights from the presentation, making it easier for you to review, reflect, and apply what you’ve learned.
This presentation shows that TOC implementation cannot be separated from the business environment around it. A key takeaway is that strong internal gains can be undermined when changing market conditions, supply-chain pressures, leadership shifts, and old decisions collide with the current operating model.
A major insight is that isolated TOC applications are not enough. The presenters argue for a more holistic view that connects operating strategy, DBR, replenishment, throughput accounting, product mix, leadership alignment, and supply-chain collaboration to the realities of the industry.
The case is especially compelling because the company achieved substantial results from its TOC journey, including higher capacity, lower WIP and lead times, reduced expedited freight, stronger productivity, and a major net profit increase, yet still faced new threats from the changing automotive environment.
One of the strongest lessons is strategic: the deeper blocking factor in the automotive supply chain is not just execution, but the belief that each link should buy at the lowest possible unit price and follow its own release rules. The session points toward supply-chain collaboration and throughput-focused thinking as the next frontier for improvement.
Instructor(s)
Jack Warchalowski
Jack Warchalowski is the CEO of Montera Inc.
Montera specializes in software and consulting that helps clients solve problems in Operations and the Supply Chain.
Jack helps organizations enhance their profitability and competitive position through the implementation of strategic improvement initiatives driven by our Roadrunner software.
Jack is a Certified Management Consultant and a Professional Engineer registered in Ontario. He holds an MBA degree from the Wilfrid Laurier University and a Bachelor of Applied Science in Mechanical Engineering from the University of Waterloo in Waterloo, Ontario.
In addition, Jack is certified by the TOCICO in all aspects of TOC.
Duncan Patrick
Duncan Patrick is Executive Vice President of Montera Inc. Montera specializes in software and consulting that helps clients solve problems in Operations and the Supply Chain. Duncan’s business consulting career is focused on working with clients to assist them solve problems in operations and the supply chain related to lead times, the forecast, inventory, capacity, on time delivery, product development speed and market focus. Duncan holds an MBA degree from the Richard Ivey School of Business, Western University and a Bachelor of Commerce degree from The University of Calgary. Duncan is certified by the Theory of Constraints International Certification Organization in all aspects of TOC. In addition, Duncan is a Certified Management Consultant.