VIP Industries Ltd is world's second largest and Asia’s largest luggage manufacturer. The company partnered with Vector in November 2013 to help grow the top-line and bottom-line of the company by using TOC way of thinking. VIP has now aligned its central planning function, hard luggage production, raw material purchase, soft luggage purchase from India & China and the logistics function (network design and movement of goods up to the branches) to the principles of TOC. It has also implemented auto replenishment along with churning of SKUs across 250 of its co-owned exclusive stores and are now enabling the same processes across their franchisee-owned stores. Post these implementations the following benefits were experienced.
Pt. Megasari Makumur (Godrej Indonesia, part of Godrej Consumer Products Limited, India) has embarked on a journey to transform its business of manufacturing and distribution of various household products like air fresheners, wet tissues, baby care products, etc. through the platform of 'Theory of Constraints'. They have partnered with Vector Consulting Group since December 2013. Since then they have reaped the following benefits..
- Overall inventory days has been reduced by 28%.
- Inventory turns improved by 37% (from 6.38 to 8.75).
- Approx. 14% (8200 sq.m) of the warehouse space has got released
- ROCE increased from 47% to 65%.
- Availability at the central warehouse and depots / branches has increased from 92% to 98%.
- Service levels from branches / depots to customers has improved from 95% to 97%
- The TOC sales pilot conducted with the company’s largest modern trade partner, Indomart, resulted in a dramatic (41%) reduction in the retailers’ inventory while improving availability to a consistant 98-100%
Godrej Interio, a business unit of Godrej & Boyce Mfg. Co. Ltd., is India's largest furniture brand. In order to stay ahead in the market, the company continuously designs and manufactures new and innovative products that emphasize comfort and aesthetics while delivering environment friendly, durable and functional furniture solutions. Godrej Interio's NPI (new product initiatives) division has ongoing development projects as well as enhancement projects in its kitty. Initiatives called "full track/fast track projects" involve development projects of completely new furniture products which have to be designed from scratch and introduced. The enhancement projects are typically smaller projects which involve improving existing designs based on feedback from sales team. Until recently the company was struggling to complete both sets of projects on time. After one year of TOC implementation, the fully completed number of enhancement projects has gone up by 100% and the lead times have crashed across the board. Now the company is able to deliver projects on schedule 70% of the time with a jump of 50% from last year. In the coming months, these parameters are expected to further leap-frog ahead.
Leading player in customized home kitchen solutions After successful implementation in the Office Furniture division, Godrej Interio, decided to extend the Theory of Constraints implementation to Modular Kitchen segment. The supply chain consists of around 15 Suppliers and 2 in-house plants producing around 2000 different parts which should be delivered in full as per order for installation. With implementation of TOC operations solutions, the ex-factory On- time -in- Full performance has gone up from around 50% to 98%. All this has been achieved while the Order booking has been growing at around 25% y-o-y.
One of the leading companies in fashion footwear industry. The company has achieved over 97% availability in its central warehouse, which is probably amongst the best in the fashion industry. The production lead-time has dropped from 45-60 days to 17 days. The total inventory has reduced from 125 days to 65 days. The company after flat sales for about 4 years till 2009-10 has increased sales by 15% in 2010-11 and 25% in 2011-12. The company has rolled out the replenishment offer to its showrooms and distributors, which provides offer of high inventory turns and high availability. Most clients have reported more than 30% jump in sales with improvement of inventory turns from 2 to more than 5.
Leading manufacturer of tools and files. Using TOC solutions, JK tools have increased output by 30% from current capacity in 6 months of implementation. Its plant in Kolkata doubled its output in one year.
India’s leading leisure goods retail chain (books, toys, music, movies and stationery). It runs 18 large format stores across 10 cities in India apart from numerous small format outlets at Hotels and Airports. Landmark was grappling with the challenges of high inventory and significant unavailability across its stores as also the challenge of managing over 400,000 SKUs in its chain.In the first year of TOC implementation with Vector, Landmark has reduced its chain wide inventory by over 30% even as it has added a Central Warehouse, which did not exist before. The availability of goods in stores has increased to over 90% and decline in sales has been arrested. The company has put in place robust mechanisms to manage its portfolio across categories and is effectively managing the product mix in stores. The results of this are evident in the trend of sales growth and high inventory turns.
Retail chain with about 80 stores across India, selling fashion footwear. 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. The company will have another 20% growth in 2011-12 without infusion of capital.
Godrej Interio is a pioneer in providing office furniture solutions in India. Since furniture as a product category was getting more and more commoditized, Interio had to differentiate its offering in order to rise above the price wars, to retain its leadership position, to expand market share and to ensure profitable growth. Therefore to build a decisive competitive edge based on speed and reliability of delivery, the company partnered Vector Consulting Group and transformed its supply chain using the TOC principles. Consequently, in addition to significantly crashing lead time of regular orders, the company now also offers an assured, 7 day delivery through its new Express Delivery program. The following results were realized within a few months of implementation:
Godrej Interio is a pioneer in home and office furniture in India. The company’s service division with its 42 service centers manages more than70,000 spare parts sourced from their own plants and from more than 100 domestic and international vendors. In this environment the order quantities can be as low as 1 pc per year and the lead times could vary from 7 days to 100 days. The wide range of SKUs and fluctuating lead times had led to major supply chain and last mile execution problems for the company. But after the implementation of the TOC processes for management of spares and service operations, Godrej is now able to offer exemplary and seamless service to their customers. Service levels to the customers have been improved by process improvement without increasing the fixed cost of the service providers.