Theory Of Constraints.
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This document presents a case study on the implementation of Theory of Constraints (TOC) in a start-up firm that manufactures sheet metal and aluminum extrusions. The firm was facing challenges like slow throughput, high inventory, and incomplete orders. By applying TOC principles, modifications were made to machines to increase their capacity. This improved synchronization between automatic and manual machines, reduced operators requirements, and increased monthly production. As a result, throughput increased, costs reduced, and profit improved after implementing TOC.
Theory Of Constraints.
- 1. THEORY OF CONSTRAINTS : A CASE STUDY
- 2. PRESENTED BY: KHUSHBOO CHOUDHARY (2015HB74028) SHASHANK SHEKHAR SINGH (2015HB79013) NANDITA PRADEEP (2015HB74006) VINOY VINCENT (2015HB74020) IMPLEMENTATION OF THEORY OF CONSTRAINTS (TOC) IN PRODUCTION
- 3. THE CASE STUDY FIRM: KEY FACTS THE FIRM: A start-up Deals in • SHEET METAL • ALUMINIUM EXTRUSIONS Sheet metal includes • Automobile chassis, UPS and invertor chassis and cabinets • Refrigerating , silencers , leg guards Aluminum extrusions includes • Heat sinks, panels Vendors/ Partners • Valco India ltd, Indo alusys, Bhushan steels,BALCO, Jindal Steels, Tata Steels Sales & distributes • Schneider electric, Luminous Power technologies, Zenus powers,Tata motors, Voltas, Ashoka Leyland , Scooter India.
- 5. FOCUS AREA: Taking HEAT SINK Manufacturing Unit into Consideration HEAT INDULGENCE?! Heat indulgence techniques are the prime concern to remove the waste heat produced by Electronic Devices, to keep them within permitted operating temperature limits. Heat indulgence techniques include heat sinks, fans for air cooling, and other forms of cooling such as liquid cooling. Heat produced by electronic devices and circuitry must be self-indulgent to improve reliability and prevent premature failure. Integrated circuits such as CPUs, chipset, graphic cards, and hard disk drives are susceptible to temporary malfunction or permanent failure if overheated.
- 6. ECOVOLT HEATSINKS 851-153403450010, 851-0001, 851-0002 are the three different types of heat sinks they are mounted on 666 PCB plate of ecovolt inverter of luminous power technologies in the ratio of 2:1:1. All the three heat sinks are having common front and bottom operations; they can be distinguished by their top operations. As 851-153403450010 has no operations on top while 851-0001 has three holes on top two are M4 holes and one is M3. Similarly 851-0002 has two M4 holes on top.
- 7. Number of Machines 6 SPINDLE DRILLING 6 SPINDLE TAPPING 4 SPINDLE DRILLING 4 SPINDLE TAPPING 2 SPINDLE DRILLING 2 SPINDLE TAPPING Machines used :- SPM 6 SPINDLE 4 SPINDLE 2 SPINDLE Manual
- 8. For manufacturing 851-153403450010 2- 6 spindles drilling 2- 2 spindles drilling 1- 6 spindle tapping Single manual machine – Chamfering Manpower- 6 operators
- 10. For manufacturing 851-0001 1- 6 spindle drilling 1- 2 spindle drilling 1- 6 spindle tapping 5-manual machines are required ◦ For m4 holes ◦ For m3 hole ◦ For chamfering ◦ For tapping m4 holes ◦ For tapping m3 holes Manpower- 8 operators
- 11. 851-0001
- 12. For manufacturing 851-0002 1-6 spindles drilling 1- 2 spindles drilling 1- 6 spindles tapping 3 manual machines ◦ For m4 holes ◦ For Chamfering ◦ For m4 tapping Manpower- 6 operators
- 13. 851-0002
- 14. Figures before the implementation of TOC 32750 26880 28480 October November December No.of 851-0001 heatsinks produced No.of 851-0001 heatsinks produced Ecovolt 851-0001 monthly production. Month No.of 851-0001 heatsinks produced Rate value October 32750 20.35 666436.00 November 26880 20.01 537868.80 December 28480 19.66 559916.80 35040 26240 27840 October November December No. of 851-0002 heatsinks produced. No. of 851-0002 heatsinks produced. Ecovolt 851-0002 heat sinks Months No. of 851-0002 heat sinks produced. Rate Value October 35040 19.76 692222.40 November 26240 19.47 511022.40 December 27840 19.11 532022.40
- 15. 73880 46060 58880 October November December No of 851-153403450010 heatsink produced No of 851-153403450010 heatsink produced Ecovolt heatsink 851-153403450010 Month No of 851-153403450010 heatsink produced Rate Value October 73880 18.61 1374906.80 November 46060 18.25 840600.60 December 58880 17.91 1054540.80
- 16. The CHALLENGES we face. Slow throughput Less productive High non-operating expenses Incomplete purchase order Inventories deposition near 6- spindle tapping machine of 851-153403450010 line. Slow productive rate due to poor synchronization between manual machines and automatic SPM machines.
- 17. What is Theory of constraint(TOC) ? Identify - the system constraint(s) Exploit - the system constraint(s) Subordinate - the system constraint(s) Elevate – the system constraint(s) Go back to step 1 if bottleneck fails
- 18. Main causes of slow throughput: The center distance between 3 holes in front portion is 13mm. but our existing spindles are not able to adjust lesser than 14mm, that’s why we do 1st and 3rd hole of front portion and two holes of bottom portion at a time. For the 2nd hole we need extra machine and labor. (Note-1:- All three parts are having same front and bottom operations.) (Note-2:- We use compounded fixtures in which we can perform two operations at a time one is at front and another one is at bottom). First we place unprocessed part in first block, then after the completion of operation we take it out and place in second block like this we can perform two operations at time.
- 19. working of compounded fixtures given below:-
- 20. Elimination The problem can be eliminated only when we can adjust our spindles at the center distance of 13mm. Grind our spindles 0.3mm from both the sides Remove the capping ring placed over the bearing. Before Grinding After Grinding
- 21. Modification done By doing these modifications we are able to adjust our spindles at the center distance of 13mm and we can save 4 persons from each production line. PRODUCTION LINE:- In both 851-0001 and 851-0002 heat sinks Before:- After:- 6-spindle drilling 2-spindle drilling 6-spindle tapping manual M4 drilling manual M3 drilling chamfering manual M4 tapping manual M3 tapping 6-spindle drilling 2-spindle drilling-M4 holes 6-spindle tapping 2-spindle tapping-M4 holes manual M3 drilling chamfering
- 22. In 851-0002 Before:- After:- 2 spindle machine is vacant now. This we can save two operators and reduce the non operating expenses. By using automatic machines instead of manual we can reduce the WIP inventory. 6-spindle drilling 2-spindle drilling 6-spindle tapping manual M4 drilling chamfering manual M4 tapping 6-spindle drilling 2-spindle drilling- M4holes 6-spindle tapping 2-spindle tapping-M4 holes
- 23. In 851-153403450010 Before:- Line 1 Line 2 Two 6 spindle drilling machines and two 2 spindle drilling machines for drilling holes. But only one 6-spindle drilling machine for tapping 6-spindle drilling 2-spindle drilling 6-spindle tapping chamfering 6-spindle drilling 2-spindle drilling
- 24. After:- Line 1 Line 2 we used our vacant operator for running one extra 6-spindle tapping machine for converting all WIP inventories into FG’s. 6-spindle drilling 6-spindle tapping chamfering 6-spindle drilling 6-spindle tapping
- 25. Figures after the implementation of TOC Ecovolt 851-0001 monthly production. Month No.of 851-0001 heat sinks produced Rate value October 32750 20.35 666436.00 November 26880 20.01 537868.80 December 28480 19.66 559916.80 Expected 50000 19.66 983000.00 32750 26880 28480 50000 October November December january(till 29th) No.of 851-0001 heatsinks produced No.of 851-0001 heatsinks produced
- 26. Ecovolt 851-0002 heatsinks Months No. of 851-0002 heatsinks produced. Rate Value October 35040 19.76 692222.40 November 26240 19.47 511022.40 December 27840 19.11 532022.40 Expected 50000 19.11 955500.00 35040 26240 27840 50000 October November December january(till 29th) No. of 851-0002 heatsinks produced. No. of 851-0002 heatsinks produced.
- 27. Ecovolt heatsink 851-153403450010 Month No of 851-153403450010 heatsink produced Rate Value October 73880 18.61 1374906.80 November 46060 18.25 840600.60 December 58880 17.91 1054540.80 Expected 100000 17.91 1791000.00 73880 46060 58880 100000 October November December january(till 29th) No of 851-153403450010 heatsink produced No of 851-153403450010 heatsink produced
- 28. Rate of production : A comparison Rate of production per shift. (Before) Part code No.of parts/ shift WIP No. of operators required No.of machines required No.of working days Mothlty production capacity Price rate/Part Total value Operator's/ month wages Total wage value given Net value Manual SPM 851-0001 2000 500 8 5 3 20 40000 19.66 786400 7045 56360 730040 851-0002 2000 500 6 3 3 20 40000 19.11 764400 7045 42270 722130 851- 153403450010 4000 1000 6 1 5 20 80000 17.91 1432800 7045 42270 1390530 Total 2842700
- 29. Rate of production per shift. (After) Part code No.of parts/ shift WIP No. of operators required No.of machines required No.of working days Mothlty production capacity Price rate/Part Total value Operator's/ month wages Total wage value given Net value Manual SPM 851-0001 2500 0 6 2 4 20 50000 19.66 983000 7045 42270 940730 851-0002 2500 0 4 1 4 20 50000 19.11 955500 7045 28180 927320 851- 153403450010 5000 0 5 1 4 20 100000 17.91 1791000 7045 35225 1755775 Total 3623825 Profit Value 781125
- 30. Goal Achieved! Proper utilization Synchronized form Increased throughput Completion of purchase order Operator saved: o In 851-153403450010:- 1 o In 851-0001:- 2 o In 851-0002:- 2