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Revolutionizing supply chain management the theory of constraints way: a case study

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  • Kartik Modi
  • Harshal Lowalekar
  • N.M.K. Bhatta

Abstract

This research describes in detail an application of theory of constraints (TOC) and its resulting benefits on the supply chain performance of India's largest lock manufacturing company over a period of seven years. Using TOC's thinking process, the core constraints that had limited the company's performance in the areas of production, distribution, supply group and projects were identified and eliminated. TOC's unique approach helped the company achieve a significant reduction in its finished goods, raw material and work-in-process inventories at various levels across the supply chain. The stock-outs and excess in the distribution system nearly disappeared. The existing lead times saw a drastic reduction while the availability of items increased to nearly 100% despite significant decrease in inventory levels in the supply chain. The inventory turns of the distributors and retailers more than tripled and their profitability increased significantly. The overall sales of the company grew nearly three times during the six years post TOC implementation. TOC's holistic approach helped the company to double its profits and improve its cash position during the Great Recession.

Suggested Citation

  • Kartik Modi & Harshal Lowalekar & N.M.K. Bhatta, 2019. "Revolutionizing supply chain management the theory of constraints way: a case study," International Journal of Production Research, Taylor & Francis Journals, vol. 57(11), pages 3335-3361, June.
    • Handle: RePEc:taf:tprsxx:v:57:y:2019:i:11:p:3335-3361
    DOI: 10.1080/00207543.2018.1523579
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    Cited by:

    1. Olga Lingaitienė & Aurelija Burinskienė & Vida Davidavičienė, 2022. "Case Study of Municipal Waste and Its Reliance on Reverse Logistics in European Countries," Sustainability, MDPI, vol. 14(3), pages 1-24, February.
    2. Pinyarat Sirisomboonsuk & James Burns, 2023. "Sustainability in Supply Chains through Rapid Capacity Increases and Minimized Disruptions," Sustainability, MDPI, vol. 15(7), pages 1-17, March.
    3. Gleriani Torres Carbone Ferreira & Jacques Marcovitch & Maurício Jucá Queiroz, 2020. "Understanding the Constraints on Success in Brazilian Amazon Production Chains," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 21(1), pages 95-104, June.
    4. James R. Burns & Pinyarat Sirisomboonsuk, 2022. "Applications of System Dynamics and Big Data to Oil and Gas Production Dynamics in the Permian Basin," International Journal of Business Analytics (IJBAN), IGI Global, vol. 9(1), pages 1-22, January.

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