Established in 1963 and part of Godrej & Boyce Group, GODREJ-Material Handling, is India's largest lift truck Manufacturer. The Forklift range of the company includes electric, LPG and diesel counterbalanced forklifts up to 25 tonne capacity, warehouse trucks and special trucks for specific applications. In July 2014, the company adopted the Theory of Constraints (TOC) framework with the objective of revamping its operations to enable it to better meet customer expectations. Before implementing TOC, the company was struggling with frequently missed commitments in the market in spite of high Finished Goods Inventory. But within a few months of implementation, the large and varying manufacturing lead times crashed to one-third of the original lead time. Dramatic improvements were made in the supply chain and operations to make this possible.
Results so far are as given below.
Godrej Securities Solutions, a division of Godrej & Boyce, market leader in the business of providing physical security products. Godrej Securities Solutions is a pioneer in providing security products such as safes, strong room doors, safe deposit lockers and record protection equipment, premises security solutions, home safes, and marine solutions. Banks, NBFCs, jewelers, corporates, defense establishments, and retail consumers of home safes are some of its customers. In October 2010, the company adopted the Theory of Constraints (TOC) framework for revamping the supply chain of its Physical Securities Business with the objective of improving on-time delivery performance, reducing lead-time, and enhancing the availability.
The project was also expected to have a significant impact on the bottom line of the division. Results achieved within two years of implementation are as given below. In the first 2 years, the profits increased by 3 times, and has quadrupled in the 3rd year. The sales has also doubled in 3 years.
The profitability has increased significantly, while ROCE has tripled. Institution Business On time performance improved to more than 90%, while the production lead time reduced by over 50% Lead time to customers reduced by 50%, while variability in lead time reduced seven times Output in the plant almost tripled, and this has been achieved with significant reduction in overtime and with the least addition of manpower Work-in-progress inventory reduced by more than 50% and finished goods stock reduced by 50% Rate of new product introduction increased by 200% Retail Business Availability of all items is in the range of 90% Number of distributors have almost tripled, along with doubling of range at the distributor Number of retailers increased four times, along with doubling of range at the retailer Overall Result Profitability has almost tripled
A business unit of Godrej & Boyce Mfg. Co. Ltd. is one of India's largest engineering and consumer product groups. Godrej Storage Solutions is the market leader in India in the field of Storage & Material Handling with world-class design, manufacturing, project management, distribution & after sales support. Godrej Storage Solutions embarked on the journey of Theory of Constraints implementation in FY'11 to build a competitive edge in the market by enhancing supply chain performance.For project orders, the on-time delivery performance from the Chennai plant, improved from an average of 30% to more than 85% + on the originally committed date. This was done while improving the plant output by 22%. In some product categories the lead-time was also reduced by 25%.The company created a new supply chain segment for supplying small standard products with guaranteed delivery, within 3 days of order receipt. The new supply chain helped Storage solutions expand into new segments using the dealer network across the country. The sales in this segment has grown by more than 100%, while the overall sales has increased by over 25 % year on year basis.
Leading player in office furniture systems, the company designs, manufactures and commissions as per customer preferences. With implementation of DBR and CCPM solution components, the office furniture division of Interio improved the on-time performance from an average of 50% to over 98% in 2 months of starting the implementation and has been maintaining the performance for the last 18 months. There has been 70% reduction in WIP and 40% reduction in Finished Goods inventory. The lead-time has reduced by 30% to 50% in various categories. There has been about 20% capacity release in the manufacturing facility besides about 80% reduction in expediting costs like air shipments and overtime. The division has improved the overall profitability by improving the mix of lucrative small orders, where customers demand lower lead times.
Die Cast Dies and Panel Tools manufacturing major implements multi-project CCPM to improve on-time delivery (as per originally committed dates) to 85%+.while reducing overall lead time.
Manufacturer of tooling for auto sector. 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%.
Bajaj Luminaires, a division of Bajaj Electricals Limited, is one of the leading players in the business of providing solutions for commercial, industrial and outdoor lighting. The on time in full delivery performance of the suppliers in this market is about 20% to 30%. The result is locking of the capital of the dealers over a long period, and late delivery penalties. Hence , delivering On Time In Full and in shorter lead times is a Decisive Competitive Edge (DCE) for Luminaires. In a period of two years, Bajaj Luminaires now delivers on time in full, for about 85% of its orders with the remaining 15% orders being fulfilled in full within 7 days. (The average lead time of industry is around 5 weeks.) In FY 2013-14 the sales increase over last year was 10%, while that of the key players was negative and at best a growth of 3%.The inventory, in days, for the BU is reduced by 20%.
Kirloskar Oil Engines Ltd. (KOEL) is a leading Diesel Engine and Generator Set (Gen-set) manufacturer in India. They design, manufacture and supply Diesel Engines, which is at the heart of Gen-sets. Though this industry is aware that customers need fast and reliable delivery, KOEL and its competition could only offer customers delivery lead times of over 4-6 weeks because of the complexities in their manufacturing and supply chain. But after moving away from forecast-based model to consumption-based operations, the company is now able to offer guaranteed deliveries in one week. The company’s working-capital-turns also improved phenomenally converting KOEL from a persistently cash-starved business to a healthy one.
Kirloskar Oil Engines Ltd. (KOEL) is a leading Diesel Engine and Generator Set (Gen-set) manufacturer. The company services its Gen-sets through dedicated service centers across India. Customers, both Institutional and Individual/small businesses, need fast and reliable service. Without functioning gen-sets, they could be at risk of not having power back-up when required. But unfortunately, the service centers faced severe parts availability issues and could not complete service within the promised 2 days. Procuring and producing as per forecasts had resulted in mismatched components, and large and variable lead times. And whenever attempt was made to improve availability, the inventory and related costs would become untenable. But after the company implemented a TOC based replenishment model for spares procurement and distribution, KOEL was not only able to offer guaranteed availability of spares but was also able to realize substantial financial benefits.
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