« Back
Up
Poor on-time delivery performance even in periods of under load
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High level of expediting and associated costs
line Month end skew of dispatches Pressure to reduce manufacturing costs
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Frequent customer complains
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Rework and quality problems
line High work in process and finished goods inventory
line Frequent problems on raw material availability
line The constraint resource keeps shifting
Down

The Core Challenge

Delivering on-time with much lower lead time

The Solution
which isn't ...

Implement MRP or Lean Techniques

Get more out of less

Get more out of less An analysis of the equipment manufacturing industry in India, during the economic boom of 2009-12, reveals an interesting pattern. About 43 per cent of them show a consistent y-o-y sales growth. Out of these, only 21 per cent achieved consistent y-o-y profit growth. However, barely eight per cent of the companies demonstrated a consistent ROCE (Return On Capital Employed) of greater than 25 per cent.

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Standing on the shoulder of the giants

Standing on the shoulder of the giants Standing on the Shoulders of GiantsGiven that Toyota is the flagship of Japan’s industry, one should expect that Lean would be widely implemented in Japan. Surprisingly, this is not the case. Less than 20% of the manufacturers in Japan have implemented Lean.

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Dealing with Emperor's new clothes

Dealing with Emperor's new clothes How does one optimize in an environment of changing product mix coupled with variability in resource loading, while at the same time, maximize plant output along with delivery performance? Looks like a hopeless situation for a plant manager but an exciting problem for a theoretician and hence a great market for an IT product.

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Getting CCPM implementation right

Getting CCPM implementation right Cherry-picking solution components and sequencing them incorrectly 1 can lead to the failure of CCPM implementations

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Godrej Storage Solutions

Client: Godrej Storage Solutions

Godrej Storage Solutions improved on-time delivery performance from 30% to above 85%, plant output by 22%, while reducing the lead time by 25%...

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Godrej Security Solutions

Client: Godrej Security Solutions

The physical securities division has achieved on time performance of more than 90%, while reducing lead time by 43% and increase in plant output by more than 50%....

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Godrej Interio

Client: Godrej Interio

The Office Furniture Division (OPOS) of Godrej Interio achieves on-time delivery of 98%+, on the original committed customer dates, with capacity release of 30%.

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Client: A Leading Switchgear manufacturer

Record Production Levels month on month from the third month, achieved more than 50% rise in plant output

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Client: Tool and die cast die manufacturer

Die Cast Dies and Panel Tools manufacturing major increases on time delivery from below 8% to more than 90%, while reducing lead time by 25%.

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« Back
Up
Severe pressure on profitability
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Frequent rescheduling in plants due to component availability issues
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Excess stocks of components at warehouses
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Frequent complains from dealers on excess stocks
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Production conflicts between after-market and OEM supplies
Down

The Core Challenge

Ensure right products are manufactured and distributed as per dynamic market requirements

The Solution
which isn't ...

Lean Management

More is not merrier

More is not merrier The customer is spoilt for choice. Thanks to the explosion in variety in almost every consumer goods product category in the last few decades, he now has endless options before him. Be it for cars, coffee, capris, cell phones… he never had such a good time shopping. The good times only seem to be getting better as multiple players continue to enter the market; players react to new offerings of competitors who in turn fight back with more introductions.

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An After Thought on The After Market

An After Thought on The After Market The auto industry in India is going through one of the worst phases in the recent past. With many OEMs announcing frequent block closure of their plants, coupled with the need to correct for excess components inventory in the supply chain, the resultant effect is de-growth of sales for most component vendors.

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The Road Less Travelled

The Road Less Travelled With slowdown in auto industry, the capacity utilisation for component vendors has dropped significantly. Most auto components companies are now looking at ways to increase sales from the "recession proof" Aftermarket. The article highlights a radical new approach to increase sales in Aftermarket in a sustainable way.

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After Sales Service Not a Lip Service

After Sales Service Not a Lip Service Couple of decades ago, frequently visiting garages to get one's car repaired was the norm. Car owners were familiar with the garage owners. In the last few years, the frequency of these visits has come down dramatically, thanks to cars becoming more reliable.

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Auto Supply Chain in India - a mishmash of "Push" and "Pull" methods?

Auto Supply Chain in India - a  mishmash of The operational practices of almost every player in the Automobile and Auto component industry are greatly influenced by the pioneering innovations of Henry Ford and Taichi Ohno

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Three Rules for Rapid New Product Development

Three Rules for Rapid New Product Development Due to dependence, any change in one part can have a cascading effect on several other parts. In the initial stage of design, several iterations are inevitable due to conflicting design decisions made by different teams.

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Fleetguard Filters

Client: Fleetguard Filters

The After Market distribution now operates at 17 inventory turns, as compared to 3 to 4 average turns of industry, with over 98% availability at all stocking points, including distributors. The distributors have this availability at 10-12 days inventory.

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Filtrum Polymer

Client: Filtrum Polymer

When the TOC implementation started in Oct 2009, the company was at 6% PBT. Now the company is at 15%PBT with 60% increase in sales. It has 100% delivery performance to all its auto parts customers.

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Lucas-TVS

Client: Lucas-TVS

With implementation of TOC process in sales and distribution, the Inventory has reduced by 20% while same day availability at branches has improved from 58% to 85%. The market reach has been enhanced by 30%.

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« Back
Up
Diminishing same store sales growth
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Low working capital turns
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Stock outs of high selling items
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Too many 'flops' in fashion items
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Long and unreliable supply lead time
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Excess and non-moving inventory
Down

The Core Challenge

Exploit the store footfalls by having right stock without excess or shortages

The Solution
which isn't ...

Effective buying capabilities

Overcoming the Threat of E-tailers

Overcoming the Threat of E-tailers These days, e-tailers, in India, have been making headlines with their mind-boggling valuation figures. One of the most established firms in this space, Amazon has a valuation of more than 500 times its earnings.

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Retailers Dilemma

Retailers Dilemma It is not uncommon for a manufacturing company to enjoy a profitability of around eight percent when the gross contribution is about thirty percent. However, it is rare for a retail chain enjoying a gross contribution of forty percent to have a consistent profitability of three percent (if they manage to make a profit at all).

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Dealing with Variety in Supply Chain

Dealing with Variety in Supply Chain Is it possible to have the cake and eat it too?

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Preventing the demise of a store

Preventing the demise of a store

100% availability leads to substantial increase in profits only if achieved with high inventory turns!

How come a retail store (displaying and selling regularly required essential items such as a food and household products) opened by a retail company with due knowledge of the potential sales in an area close down after some time?

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Leveraging Franchisees for Profitable Growth in Retail

Leveraging Franchisees for Profitable Growth in Retail The Indian retail market is considered as one of the most attractive markets in the world in terms of market size and potential. This is reflected in the Rs 30,000-crore Retail Franchising industry in India, which is growing at an annual rate of 30%.

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Enhancing Profitability of Retail Chains: Using the Fundamental Principles!

Enhancing Profitability of Retail Chains: Using the Fundamental Principles! Most chains operate with about 3 to 6 months inventory and a significant portion of inventory is non- moving. Free cash is an issue for most chains. If chains learn the science of managing their supply chain, they can at least double their current inventory turns.

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Landmark

Client: Landmark

In the first year of TOC implementation, Landmark has reduced its chain wide inventory by over 30% even as it has added a Central Warehouse. The availability of goods in stores has increased to over 90%.

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Liberty Retail Revolutions Ltd

Client: Liberty Retail Revolutions Ltd

In the first year it improved the store inventory cover from 10 months to 5 months, while increasing sales by 30%. The released capital was used to add 30 stores to the existing 50.

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« Back
Up
Complaints of material unavailability despite having very high inventory
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High skew of month end sales
line Frequent expediting in production and logistics
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Pressure from dealers on discounts
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Much less than target sales from new products, despite good potential
Down

The Core Challenge

Having the right inventory at the right time and at the right place.

The Solution
which isn't ...

A better forecasting tool or a new supply chain optimiser...

Small is Big

Small is BigIndia's population follows a long tail distribution - 15% of the total districts (640) are occupied by 35% of the total population.The remaining 65% of the population is spread across the larger number of remaining districts. The size of the population in the "tail" is bigger than that under the "head". Assuming every district has a representation of various socioeconomic classes, the sales data of distributors of a consumer goods company with a pan India presence should ideally mirror the long tail population distribution curve.

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The Devolution Marketing

The Devolution MarketingThe American marketing model is dysfunctional. Small and medium-sized companies, as well as large multinational! rms, have been lured into a misconceived form of producing and selling.
It goes like this:

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What enables effective decisions?

What enables effective decisions?With cloud computing and ever reducing prices of storage systems, the available capacity to store data has gone up exponentially. At the same time, data sets, collated from varied sources, are also growing at an ever-increasing pace to the size of petabytes.

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Profitability Percentage (%)

Profitability Percentage (%)

Is it the right measure 
for evaluating operational productivity?

A good measure for evaluation of operational productivity should avoid the two errors—false positives and false negatives. Let us check if the measure of profitability calculated as PBDIT as percent of sales meets the criteria.

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The Road Less Travelled

The Road Less Travelled

Implementing pull systems in a retail environment of mom and pop stores

Every sales manager in a consumer goods company faces a moment of truth in the last week of every month - on one hand he has to meet his sales targets but on the other hand the stocks available with him is not exactly what the market wants (either in terms of quantity or range).

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Liberty Shoes

Client: Liberty Shoes

The company has achieved over 95% availability in its central warehouse. The production lead time has dropped from 45 days to 25 days with 30% reduction in WIP and FG inventory.

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Top1 Lubricants

Client: Top1 Lubricants

TOP1 reduced its inventory from 7 months to 2 months in its warehouses in Indonesia, while improving availability to near 100%.

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JK Files and Tools

Client: JK Files and Tools

Within 2 months of start of TOC journey, the lead time was reduced by 40%. Plant output has gone up by35%, across 5 locations. One of the plants has shown an increase of over 70%.

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Raymond Zambaiti Ltd

Client: Raymond Zambaiti Ltd

In 8 months of implementation, production lead-time has reduced by 25% while on-time performance improved to 95%. The assortment waiting time is reduced by 50%, resulting in shortened cash to cash cycle.

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« Back
Up
Most projects delayed significantly with budget overruns
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Very high number of design iterations
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Low productivity of design resources
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Frequent demand to add resources
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Frequent rework at site
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Time to time, there are significant cash flow issues
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Right material not available for erection, while many material arrive much ahead of time
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Delays by suppliers
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Inadequate resource deployment by contractors
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Customer complaints and expediting requests
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Top management gets project delay information very late in the project
Down

The Core Challenge

Delivering the full scope of project within budget as per initially committed time

The Solution
which isn't ...

A better planning tool

EPC Reborn Focus on Flow

EPC Reborn Focus on FlowThe last few quarters have been tough for most Engineering Procurement and Construction (EPC) companies. Advances from new projects are going down, while collections from running projects have been poor. The net effect - increased borrowings with associated interest costs which are denting the profitability of companies. On theface of it, it looks like a macro-economic crisis that is outside the control of companies.

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Right for Accounting. Wrong for Project Management.

Right for Accounting. Wrong for Project Management.

Getting it right in accounting…

Financial accounting is a challenge in project organizations involved in delivering large construction projects for its clients. The activities can start in one financial period and end in another. Unlike regular production, where we wait till dispatch of completed goods to recognize revenue, we cannot wait till the delivery of complete project for revenue recognition.

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Stop digging if you are already in a hole!

Stop digging if you are already in a hole!One of the biggest problems impacting the engineering industry, in India, is retention of experienced engineers in the design department. Organizations are dealing with the situation by forcing the designers to stretch beyond the official working hours which in turn is causing burnout of designers.

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Critical Chain Project Management

Critical Chain Project Management

The age old problem

In the last fifty years, the project management body of knowledge has evolved a lot but the world of projects has not shown commensurate improvement. Numerous studies conducted over the years prove that existing project management practice is not very effective.

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The curse of multi-projects

The curse of multi-projects

The problem of multi-project environments

Most multi-project environments (where resources are shared across projects) have adubious reputation of very low on time delivery performance (less than 10%), as per the originally committed dates. Yes in many cases, the due date performance looks better, but only as per the revised dates! (or not considering that the scope may have been compromised to meet the deadline).

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Tata Bluescope Steel

Client: Tata Bluescope Steel

With implementation of flow principles of CCPM, the lead-time of projects has reduced by 25%, with 15% more output from manufacturing facility and 30% more output from engineering resources.

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TRF

Client: TRF

The bulk material handling systems division delivered 30% more output as compared to last year, from existing resources. The design lead time has come down to 3 months from an average of 8 months...

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Tata Metaliks

Client: Tata Metaliks

Tata Metaliks sets an industry benchmark in executing Blast Furnace relining shut down using CCPM. The shut down was completed in record 23 days (as compared to typical 40 to 50 day)...

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Abhishek industries

Client: Abhishek industries

Using CCPM, Abhishek Industries (Trident Group) erects spinning plant of 30,000 spindles, a green field project, in record time of 9 months as compared to industry benchmark of 12 months...

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Filtrum Tools

Client: Filtrum Tools

With the implementation of CCPM, Filtrum has been able to reduce the overall lead time by 25%, while improving the on-time delivery performance to about 90%.

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About Vector

Vector Consulting Group was started with the vision of helping companies get market share growth in their respective industries by developing unique supply chain capabilities, which provide a competitive edge. VCG uses the platform of Theory of Constraints solutions and thinking processes for developing these capabilities for its clients.

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