Increasing the performance 15% in 15 minutes of a 1,000 person factory — The focusing power of the Theory Of Constraints
I am often asked to tell my story of how I increased the performance of a 1,000 person factory in only 15 minutes. The factory was located in the middle of Mexico. It produced alternators for the automobile industry. It was a major supplier not only of the USA but also the rest of the continent.
This factory was one of the over 100 of a large automotive equipment manufacturer which was reputed to be among the 30 best practices in terms of Lean Manufacturing in the world.
This factory’s problem was that they were not managing to produce enough because of an abrupt surge in demand. They started having trouble delivering their clients on time and honouring their orders. They asked us to try and help them by injecting Theory of Constraints into their system to see if we could produce more in that way.
The goals were:
- To increase the production volumes as quickly as possible and very significantly to meet a significant increase in demand
- To eliminate the client delivery backlog
- To put an end to colossal Premium Freight expenses (airplane deliveries all over the continent)
- To restore the client confidence of its clients, especially its biggest customer, one of the world’s largest car manufacturers.
The factory was about 1,000 people broken up into 20 autonomous production units.
First, we quickly identified which part of the 20 production units was the bottleneck. We identified two as being bottlenecks, one per major product family (more or less the large alternators and the small).
To build the product, a dozen of operations are needed. The bottleneck was one of these operations, in a production unit of about 10 people and producing about 6,000 units a day on a 24-hour basis.
They had already formally identified their bottleneck correctly with a sign next to it saying, “this is the bottleneck.”
So we implemented one of the Theory of Constraints rules (only about 1 or 2% of all the principles of the Theory of Constraints), which improved the throughput of the unit’s performance by over 15% in 15 minutes. Since this was the bottleneck the production of the entire factory also increased in the same proportion.
How did we do that? What rule did we use?
We just added a buffer here in front of the bottleneck.
And in 15 minutes, we simply changed the rules. We said there should always be at least four parts, that is to say, four times 15 seconds, about a minute’s worth of work. And that was enough to absorb all the micro stoppages on this unit. That ended up being a 17% increase within they are on a stable basis simply because they were getting lots of jams from this resource which was a non-bottleneck but not that reliable, and therefore we were losing quite a lot of time there.
This was done twice in each of the 2 Autonomous Production Units that were the factory’s capacity constraints.
After that we went on to implement many other improvements in those production units and elsewhere in the factory so that the overall output and productivity increased by over 30% in a period of 6 months.
You can watch this 18 minute extract of a presentation I gave on this specific case during a TOCICO annual conference in Chicago:
Identification and proper buffering of the bottleneck generated an increase in Throughput of 15% in 15 minutes but required the company, to reconsider it’s policy of applying “one piece flow” everywhere. The second half of the video is a questions and answers sessions about combining the Theory Of Constraints and Lean.
More similar stories are available
If you enjoyed this description of one of my implementations of the Theory Of Constraints then you might be intersted in this presentation that I gave to celebrate the 15 years of my company, Marris Consulting. The title: 15 examples in 15 years. Please note that the repetition of the number 15 is just a coincidence!
These 15 examples are just a few of the over 350 assignments we have led implementing the Theory Of Constraints (usually combined with Lean) all over the world since 2005. Our clients include: ArcelorMittal, Arkema, Ariane (rockets), Autoliv, Babcock, BAE Systems, Bosch, Bulgari, Constellium, Embraer, French Air & Space Force, Getinge, GSK, IamGold, Infineon, Ipsen, Jaeger LeCoultre, Louis Vuitton, McDonald’s, Nexter, Osram, Paspaley, Procter & Gamble, Qiagen, Rolex, Safran, Siemens, SKF, SNCF, Société Générale, TDK, Thales, Veolia.
