Companies in India
At the 2005 World Conference of the TOC International Certification Organization – the certifying body for TOC Professionals - the following was presented. Client names were withheld to maintain confidentiality.
Situation: a capital goods manufacturer for refractory equipment who had been losing money for 2.5 years. The situation had become so serious that the owner had given the plant 6 months to improve significantly otherwise he would close the doors.
Actions: Stopped measuring efficiencies – stopped local performance measures which were causing bad multi-tasking. Started to measure T, I, OE, OTIF (On Time In Full) and treating Throughput as generated only when CASH was received.
Results: Business turned around in 100 days; OTIF from 5% to 90%+; Sales increased by 3000% over five year period
Situation: an automotive gears manufacturer. They had been losing money for five years and actions were started to liquidate some assets and parts of the business.
Actions: Stopped measuring quantity and weight of product sales; abolished all the KRAs (Key Result Area measures) of function heads. Started focusing on Throughput instead of sales value; focused on measuring OTIF and cash generation.
Results: OTIF form 4% to 85%+; Receivables reduced from 116 days to 50 days; Throughput increased by 70% over the next two years
Situation: a manufacturer of refractory materials for use in the furnaces of steel and cement producers with an inconsistent record on profitability.
Actions: Stopped measuring Tons per shift, per day, per month. Started measuring T, I OE, Throughput Loss and OTIF; focusing on Throughput instead of sales value for customer orders.
Results: Throughput increased by 25% in first 3 months; OTIF from 75% to 98%
There was also a report on two other businesses who revised their measurement systems to use the principles of Throughput Accounting:
- A Hospital equipment manufacturer who increased OTIF from 5% to 95% and who, over the next 24 months increased Throughput by 60% and reduced the Receivables from 360 days to 130 days.
- An Electrical component manufacturer who increased OTIF from 10% to 80% and who, over the next 12 months, increased Throughput by 100%