About this Presentation
This presentation describes the implementation of theory of constraints in a ladies fashion handbag manufacturer in China. Some raw materials come from Italy. Characteristics are: the company seldom has reorders for the same SKU; customers order twice or four times per year (seasonal forecast); flexibility in delivery lead time (20-45 days); delivery lead time (excluding shipment) averages 45 days from date of all information confirmed, material received and validated, etc.; about 20% of orders are required within 30 days; average production lead time is 45 days; high variability in daily production capacity; and WIP is very high. Undesirable effects (UDEs) include: material is in shortage when needed; production priorities change frequently; too much expediting exists; and often resources are not available when needed. The implementation objective was to achieve 0 throughput dollar days (TDD) in 120 days. Current TDD is over 100 million. After implementation lead time was 12 days compared to 45; inventory level was 500 kits compared to 3000 and due date performance was 100% compared to 60%.
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.
The implementation of Theory of Constraints (TOC) led to significant improvements in the production process, inventory reduction, lead time reduction, and profit increase.
Change management and top management commitment were crucial for the successful implementation of TOC.
The project led to a shift in company culture, with increased teamwork and collaboration, and a focus on continuous improvement.
Instructor(s)
