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Health checkFleetguard Filters PVT Ltd
Fleetguard Filters is a leading manufacturer of heavy-duty air, fuel, lube and hydraulic filters, filter systems and coolants for on and off highway applications with sales in excess of £15m. It is a part of the renowned Fleetguard group, which is a Cummins group company worldwide. It has multiple locations for its manufacturing and assembly operations which supply automotive, engine and compressor manufacturers like Ashok Leyland, Atlas Copco, Cummins, Eicher Motors, TATA Cummins, TATA Motors, Ingersoll Rand India.
For the four years prior to the implementation of TOC there compounded annual growth was:
- Sales ~ 23%
- Profit before taxes ~ 25%
- Throughput ~ 18%
- Productivity (T/OE) ~ 2%
- Capital productivity (T/I) ~ -5%
The measures used were:
- Operations – worker efficiency, machine utilisation, production efficiency
- Logistics – reduction in freight costs
- Finance – reduction in expenses (e.g. travel)
- General – quarterly review against budgeted costs
While sales, Throughput and profits had been increasing – productivity was stagnant.
After implementing TOC in the plants, warehouses and distributors Inventory and Receivables had reduced significantly but Throughput and Productivity had not moved as much as expected. Subsequently they introduced new global measurements – T, I, OE and OTIF (On Time In Full) instead of the previous local measurements. Weekly Throughout reporting and the moving average Throughput was the focus for everyone.
This change in measures produced a change in mindset and hence behaviour by the Fleetguard team. It changed their priorities of what was important – for example, delivery on time was given priority over transport cost.
The results came quickly and:
- OTIF went from as already healthy 93% TO 98.5%
- Throughput improved by 48%
- Profits increased by over 100%
- With no additional Investment needed, Productivity (T/I) rose significantly
Their story and results were presented at the World Conference of the TOC International Certification Organization – the certifying body for TOC Professionals.
