Operations / Production
Companies that have implemented TOC:
Below are some chosen success stories worldwide after implementation of TOC.
* Info taken from, The World of TOC: Reference Bank.
Motorola
Division: Advanced Product Research and Development Laboratory (APRDL) , United States.
Industry: Semiconductor
Brief Summary: Increased throughput by 150% and reduced cycle times by 20%. Benefits to the Fab plant came in terms of added capacity allowing the addition of more technologies to the line. Due to reduction in cycle time, new technology introduction occurred faster.
The Nielsen Company , United States.
Industry: Automotive
Brief Summary: 90% reduction in inventory in the system, expediting reduced while on-time became virtually 100%. Annual savings in labor cost alone amount to more than 1 million dollars.
Ford Motor Company
Division: Electronics Division , United States.
Industry: Automotive
Sales: $3,000,000,000
Brief Summary: Used TOC to improve on major gains made with JIT between 1988 and 1991, reducing lead times by an additional 60-80% and improving on-time to 98%; eliminated need for two expensive plants saving approximately 100 million dollars; reduced quality defects by 50%; improved investment efficiency by 20% and on-time delivery by 38%.
Whirlpool Corporation
Division: Q chassis Cooking Products , United States.
Industry: Consumer Durables
Brief Summary: Whirlpool reduced the manufacturing cycle time to one day. Simultaneously inventory turns were improved five fold.
Intel Corp. , United States.
Industry: Pharmaceutical
Brief Summary: Results were achieved in a few days and the process stabilized in weeks. The DBR implementation resulted in a mean cycle time reduction of 68% and a reduction to the standard deviation of 78%. The new method created a faster and more predictable DC operation. Work in process was reduced by approximately 65% causing increased inventory availability and the potential for future inventory reduction. Additionally, the work environment is now safer and less stressful. The implementation of DBR required no additional investment into the DC. The actions taken were all adjustments to policies, measures, and behaviors.
P. L. Porter , United States.
Industry: Automotive
Sales: $25,000,000
Brief Summary: WIP is down 800,000 dollars and profit margins are up. Did not have to spend millions of dollars changing entire MRP system.
Grand Rapids Spring & Wire Products, Inc. , United States.
Brief Summary: On-time deliveries have improved from a dismal 60% to 95%; inventories have decreased 30% while sales have doubled; cost of quality has dropped from 6% to less than 3.5%.
Fluid Technology Corporation
Division: Marlow Division , United States.
Industry: Other
Sales: $2,000,000
Brief Summary: On-time delivery was at 75%, despite finished goods on 40 models and a lead time of 6 weeks on 29 others. On-time delivery is at 98% (most pumps beat the paperwork to the dock); shipments are up 30% since going to 2 day delivery; Finished goods has been eliminated and WIP is down 22%. Time to implement was approximately 8 weeks.
Federal Mogul Corporation, United States.
Industry: Automotive
Brief Summary: TOC credited with saving the plant by helping achieve impressive turnaround – increased earnings 140%; throughput up 20%; operating expenses down 11% and production lead times down from 90 days to a range from 3 to 15 days.
Stanley Furniture , United States.
Industry: Other
Brief Summary: Lead times dropped from 10 weeks to 4 weeks, resulting in an inventory reduction of over 2 million dollars. Most orders are now shipped from production, not finished goods. Went from a shortage of buggies to hold material to an excess of 200 buggies.
Binney & Smith, United States.
Industry: Other
Brief Summary: In less than a year, cycle times were reduced 70 to 80%; WIP inventory reduced over 80%, run sizes reduced 70 to 80% and setup reduced 30 to 60%.
Monster Cable, United States.
Industry: Other
Sales: $20,000,000
Brief Summary: Used to take 10 days from order receipt to shipping, today it is done in a few hours. TOC being applied to all areas -customer service, credit and sales force.
FMC, United States.
Industry: Energy
Brief Summary: Reduced the cost of late deliveries by $250,000 per day and saved the company $4 million in inventory costs.
Wendell August Forge, United States.
Industry: Other
Brief Summary: Capacity was increased 21% and for the first time ever Wendell August made it through the busy Thanksgiving-to-Christmas season without running out of product.
Kent Moore Cabinets , United States.
Industry: Furniture
Sales: $9,500,000
Brief Summary: KMC profitability improved to a level that is FOUR times the industry average. JIT techniques had reduced lead times to 40 hours; TOC took it down to 8 hours. In another application, four draftsmen do the work of 7 or 8.
Moroso Performance Products , United States.
Industry: Automotive
Sales: $18,000,000
Brief Summary: Average out of stock from peak of $900K to under $300K. Fill rates in 90% range, with 98% for large orders. Overtime is down significantly.
Magnetic Specialty, Inc. , United States.
Industry: Other
Brief Summary: In six months MSI achieved 98% on-time delivery, reduced lead times by 80%, reduced overtime and opened up capacity which positioned to regain customer confidence.
H.S. Automotive , United States.
Industry: Automotive
Brief Summary: Reduced late deliveries by 58%. Astonished automotive customers have made HS a favored supplier. Now turning a healthy profit after cutting overtime by $100,000 per year (45% reduction) and inventory costs by $300,000 per year.
JOFCO, Inc. , United States.
Industry: Furniture
Sales: $30,000,000
Brief Summary: Finished Goods down 70% and making highly profitable custom furniture. WIP down 28% while production increased by 30%. Now offer 15 product lines instead of 7 and promise delivery in six weeks instead of six months. New chair factory in same space!
Premark Food Equipment Group
Division: Refrigeration Division , United States.
Industry: Other
Brief Summary: Premark cut lead time from 3 weeks to 3 days with no loss of quality. Emergency orders can be done in 12 hours. Volume has increased from 20 units per day to 60 units per day, an increase of 200%.
Iscor
Division: Iscor Refractories , South Africa.
Industry: Primary Metals
Brief Summary: Largest rotary kiln unexpectedly went down for major rebuild and repair of support rollers. Using CC, rebuild project completed in record 10 days VS original estimate of 21 days. In production, lead times have been reduced 60%, WIP is down 60%, RM is down 30% and past dues are at all time low.
Hannah’s Donut Shop , United States.
Industry: Service
Brief Summary: Sales increase of 62%, expenses reduced by 67%; net profits up 531% and return on assets up 403%.
Steel Tool and Engineering Company , United States.
Industry: Aerospace
Sales: $5,000,000
Brief Summary: Steel Tool is making 90% of old sales with half the people, and with much less inventory. Steel Tool was awarded the top small business subcontractor in the midwest by the USSBA.
Rockwell International
Division: Rocketdyne , United States.
Industry: Construction
Sales: $1,000,000,000
Brief Summary: Delta engine program realized a 33% reduction in cycle time and a 25% reduction in costs. Manufacturing discrepancies reduced 31% and material reviews reduced 44%.
Orman Grubb Company , United States.
Industry: Furniture
Brief Summary: Guarantees order will arrive in 2+2 (2 weeks and 2 days after order placement). On full replenishment mode with retailers and has increased their turns to almost 25. Six month average sales to dealers is a straight line, trending up.
The Bell Group (TBG), United States.
Industry: Industrial equipment/machinery
Sales: $100,000,000
Brief Summary: With unique utilization of TOC and Balanced Score Card, TBG has doubled bottom-line profit twice over; doubled sales revenues; increased manufacturing throughput by 40% and reduced time-to-market by 28%. TBG has also reduced marketing costs by 5%.
Parr Instrument Company , United States.
Industry: Industrial equipment/machinery
Brief Summary: Improvement in each product line: For pressure reactors, lead times shrunk by 50% and on-time improved from 48% to 95%; For Calorimeters, lead times reduced by more than 50% and on-time improved from 70% to 98%; For service parts lead times reduced from 7 days to 2days and on-time improved from 65% to 97%. WIP reduced by 60%.
Harris Corporation
Division: Semiconductor products , United States.
Brief Summary: In four years, Throughput increased at 40% per year (Industry avg. 10-20%); Inventory turns increased from 2 to 7 (Industry avg. 3) and is headed for 10. In four years plant went from zero profit to 80% of the semiconductor division’s profit and 20% of the entire corporation’s profit.
Senior Flexonics, Inc.
Division: Ketema , United States.
Industry: Aerospace
Brief Summary: In two months WIP was reduced by 40% and lead times reduced by 30-60%.
Dixie Iron Works, United States.
Industry: Energy
Brief Summary: Inventory turns have jumped from two to twelve. Operating profit increased four fold over two years. Also were able to cancel order for expensive machine.
Servomex Group Ltd , United Kingdom.
Brief Summary: In the space of a few months reduced overdues from over $600,000 to $5,000 by implementing DBR and Buffer Management which was called the “Traffic Lights System”, reduced lead times from 12-16 weeks to 4 weeks (and 10 days for express orders), improved on-time deliveries from 62% to 95% and scrap and reduced scrap/rework by 67%.
Schlly Fiberoptic GmbH
Division: Entire Company , Germany.
Industry: Medical equipment
Sales: $17,000,000
Brief Summary: Inventory went down significantly just a few weeks after project kick off while throughput and due date performance went up at the same time. Inventory turns improved from 3,6 to 5,3. Replenishment just started in August 2002, its first results are promising. The project created a significant competitive edge. The whole management team is looking forward for the next impressive steps with TOC …
McDonagh Furniture Ltd.
Division: NA , Ireland.
Industry: Office and Home Products
Sales: $8,000,000
Brief Summary: Within 12 months, on-time deliveries improved from 70 to 98%; sales revenue increased by 28% the first year and 17% the second year; Profits increased by over 300%. Operationally, lead times were reduced 20%; availability of parts at assembly improved to 100%; back orders dropped from 16 weeks to zero; and there is no obsolete stock.
Grupo RIO
Division: MRI , Mexico.
Industry: Health Care
Sales: $700,000
Brief Summary: Number of patients treated per day increased +60%, annual revenues +45%. Complaints from referral doctors and patients because of the waiting times were reduced significantly. New market segmentations were developed.
Scarborough Public Utilities Commission, Canada.
Industry: Other
Sales: $300,000,000
Brief Summary: To quote Kim Allen, the CEO, “increased value to customers by more than $5 million annually. We have reduced Operating Expenses by $10 million and we are doing more work than we did a few years ago.” Kim also shared that the cost to customers for outages has been reduced from $35 million to $10.7 million.
Sadesa
Division: Paycueros , Uruguay.
Industry: Tanner
Sales: $90,000,000
Brief Summary: At the end of 1992 the lecture of “The Goal” was started. By the end of 1993 many significant improvements were obtained such as the reduction of Lead Time from 30 days to 11 days along with an inventory reduction of 69%These allowed them to manufacture the whole production of one of the group´s companies that was closing without any investment. Net profits doubled in this time period.
Audus Noble Ltd, United Kingdom.
Industry: Plastic Packaging
Brief Summary: Implemented in one week on Healthcare Product for the Eye Care Industry – Annual Throughput Increased by £82,500 with no change to Operating Expenses. In the Plastic Molding Assembly for the Confectionary Industry Annual Throughput Increased by £95,750 Operating Expenses Reduced by £22,500. Delivery Performance Improved from 92% to 100%. Company Stock Levels Reduced by 50% from approx. £500K to £250K per annum. In 2003 resulted in the Operations Department delivering the highest performance, breaking all previous Company Sales records for the previous seven years.
Magnum Medical AS
Division: logistics , Estonia.
Industry: Pharmaceutical
Brief Summary: „Implementation of TOC principles for Customer Order processing“ Sub- Project. Achieved results: • Increase of Sub- Process throughput at least 50% • Reduction of Customer Order processing time ca 25% (based on indirect calculations) „Implementation of TOC principles for Receiving, Storage, preparation of goods . Achieved results: • WMS based flow balancing system was developed • Increase of productivity of average Logistics Centre worker more than 30% (decrease of labour costs more than 30%).
Kriesler Manufacturing Corp
Division: Aerospace Div , United States.
Industry: Aerospace Sales: $14,000,000
Brief Summary: Throughput / Operating Expense Ratio improved from 0.59 to 1.3 in Three Years and equals 120% increase from losses to healthy Profitability. Sales $5.4 million to $14 million 1996 to 1998. Share Price 1880% increased between Aug 96 to Nov 97.
Radcliffe Infirmary, United Kingdom.
Industry: Health Care
Brief Summary: The number of patients operated on increased by 15% resulting in 13 more elective surgeries per week. All urgent admissions are now done within 24 hours, compared with 2-12 weeks. Operating Theater utilization has been increased from 73% to 88%. Radcliffe has moved from poor performer to among the top five performing hospitals in the region.
Babcock & Wilcox, Canada.
Industry: Energy
Brief Summary: The development of the common language and measurement system at BWC has permanently changed the thinking of BWC employees across the country. Since implementing the 4×4 process, improvement projects are becoming even more tightly tied to BWC’s strategic goals. This has helped BWC maintain leadership position in the worldwide nuclear and fossil fuel steam generating business.