Operational Management

The Application of THEORY OF CONSTRAINTS RAJA Industries (Pvt) Ltd

Introduction

Mr. Asif Mahmood Sheikh undertook a tour of shoe machinery exhibition in Germany in 1985 to explore the possibilities of manufacturing shoes for export. He then decided to make shoes of top quality leather with direct injected Polyurethane Sole. He acquired all machinery and technical know how from Germany and started production in 1987. After his hard work and thorough research the company was successful in making the most comfortable and lightest Gents shoes in the world Now by the grace of Allah the company is exporting under the famous brands of the world and companys export brand is Rider. In 1997 company started making similar shoes for women, which immediately got very good response from foreign countries. This was all possible merely by the grace of Allah and hardworking & dedication of technical team/ staff.

Workers Details

Production staff: 200 Persons Staff: 40 Persons

ISO 9002 Certification

The Company achieved the hallmark of ISO-9002 in the year 2000.

Main Products GIFT University Page 1 6/1/2012

Operational Management
The Application of THEORY OF CONSTRAINTS

RAJA Industries (Pvt) Ltd

Ladies = Shoes, Sandals & Long Booties Gents = Shoes, Long Boots & Motor Cycle Boots

Exports

Name of Countries: United Kingdom & Germany Last 3 fiscal years figures are as under: From 1st July 2004 to 30th June 2005 in Rs. 102 (Million) From 1st July 2005 to 30th June 2006 in Rs. 70 (Million) From 1st July 2006 to 30th June 2007 in Rs. 80 (Million)

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Operational Management
The Application of THEORY OF CONSTRAINTS RAJA Industries (Pvt) Ltd

APPLICATION OF THEORY OF CONSTRAINTS

ELEMENTS: 1. IDENTIFY BOTTLENECK
2. EXPLOIT THE BOTTLENECK (Impovement without spending

money) 3. SUBORDINATE EVERYTHING ELSE TO THE BOTTLENECK

4. ELEVATE THE BOTTLENECK (Impovement by spending money)

5. EVALUATE & SHIFTING OF BOTTLENECK

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Operational Management
The Application of THEORY OF CONSTRAINTS RAJA Industries (Pvt) Ltd

RAJAX Industries
PROCESS FLOW DIAGRAM
1. IDENTIFY BOTTLENECK:

Top product: Pu direct Injection Casual Shoes (Both Ladies & Gents) Daily Production: 500 pairs

32 W orkers. 10 Machines. 2 Hours. 400 Pairs

Raw Material Leather

Cutting of Leather

Stitching of pieces of Leather

Molding of Sole

Finishing

16 workers. 2 hours. 400 pairs

Purchase from Suppliers

8 C utters. 20 W orkers. 400 pairs per 2 hours.

80 Machines. 86 W orkers 400 Pairs 2 hours

Packing

Checking and Inspection

5 checkers. 2 hours. 400 pairs

20 worker. 1 hours. 400 pairs

BOTTLENECK OF THE PROCESS:

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Operational Management
The Application of THEORY OF CONSTRAINTS RAJA Industries (Pvt) Ltd

Bottleneck of the process is molding of shoes. Because this process take more time as compare to other processes. This process takes 4 hours for molding to 500 pairs of shoes.

CUTTING PROCESS:
Productivity of Cutter: = Labour productivity =
No.of .Units No.of .Cutters

500 = 50 Pieces per cutter 10

Output 500 = = 250 Pieces per hour No.of .Hours 2 Output 500 = = 27.78 Pieces per worker TotalWor ker s 18

Productivity per worker =

STITCHING PROCESS:
Productivity of Stitching machines: = Machine Labour productivity =
Output 500 = = 250 Pieces per hour No.of .Hours 2 No.of .Units No.of .Machines

500 = 4.72 Pieces per 106

Productivity per worker =

Output 500 = = 4.54 Pieces per worker TotalWor ker s 110

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Operational Management
The Application of THEORY OF CONSTRAINTS RAJA Industries (Pvt) Ltd

MOLDING PROCESS:
Productivity of Molding machines: = Machine Labour productivity =
Output 500 = = 125 Pieces per hour No.of .Hours 4 No.of .Units No.of .Machines

500 = 83.33 Pieces per 6

Productivity per worker =

Output 500 = = 27.78 Pieces per worker TotalWor ker s 18

FINISHING PROCESS:

Productivity: =

No.of .Units No.of .Hours

500 = 250 Pieces per hour 2

Productivity per worker =

Output 500 = = 27.78 Pieces per worker TotalWor ker s 18

INSPECTION PROCESS:

Productivity: =

No.of .Units No.of .Hours

500 = 250 Pieces per hour 2

Productivity per worker =

Output 500 = = 125 Pieces per worker TotalWor ker s 4

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Operational Management
The Application of THEORY OF CONSTRAINTS RAJA Industries (Pvt) Ltd

PACKING PROCESS:
Productivity: =
No.of .Units No.of .Hours

500 = 500 Pieces per hour 1

Productivity per worker =

Output 500 = = 50 Pieces per worker TotalWor ker s 10

CAPACITY OF THE WHOLE PROCESS:

14 = 1,750 Pairs per Capacity = Time.of .Bottleneck Throghtput.Time = 4 OutPut 500

day.

THROUGHPUT TIME:

Throughput time of the whole process is 14 hours.

CYCLE TIME:
Cycle time is the difference between two successive processes. So our cycle time is 4 hours, because bottleneck of this process takes 4 hours so we will start next process after 4 hours.

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Operational Management
The Application of THEORY OF CONSTRAINTS RAJA Industries (Pvt) Ltd

2. IMPROVEMENT WITHOUT SPENDING MONEY:

As we evaluate the whole process of manufacturing of leather shoes. We see that the bottleneck of the process is molding section and this section take 4 hour to mold 500 pairs of shoes by 18 workers at 6 machines. Now for improvement in bottleneck if we make two sections of molding of sole, section 1 & section 2, then we split our worker and machines between in these two sections and due to this section 1 will make 250 pairs of sole by acquiring 9 workers at 3machines within 2 hours and it will be same for section 2. EXHIBIT: 2

2 hours Raw Material Leather Cutting of Leather

2 hours Stitching of pieces of Leather

Molding Section: 1 250 Pairs

2 hour 250 pairs 2:00 PM

Molding Section: 2 250 Pairs 2 hour 250 pairs. 2:00 PM Checking and Inspection 2 hour for 500 pair. 6:00 PM

12:00 Start at 8:00AM 10:00

Packing

Finishing

1 hour for 500 pair. 7:00 PM

2 hour for 500 pair. 4:00 PM

CAPACITY OF THE WHOLE PROCESS:

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Operational Management
The Application of THEORY OF CONSTRAINTS RAJA Industries (Pvt) Ltd OutPut 500 12 = 3000 Pairs per day. Capacity = Time.of .Bottleneck Throghtput.Time = 2

3. SUBORDINATE EVERYTHING ELSE TO THE BOTTLENECK:

We have 18 workers on cutting process from which 10 workers are Woking on cutting machines and 8 workers are idle and similarly we have 110 worker on 106 stitching machines from which 4 worker are idle. So if we ulitize these workers on bottleneck then we cannot incease the efficiency of the bottleneck because we have sufficient workers on 6 molding machines so if we apply these idle workers on bottleneck then we also need of more machines. So we fire out these idle workers until the purchasing of new machines.

4. ELEVATE THE BOTTLENECK (Impovement by spending

money):
EXHIBIT: 3

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Operational Management
The Application of THEORY OF CONSTRAINTS RAJA Industries (Pvt) Ltd
36 W orkers. 12 Machines. 2 H ours. 500 Pairs

4:00
18 workers. 2 hours. 500 pairs

2:00 Raw Material Leather Cutting of Leather Stitching of pieces of Leather

106 Machines. 500 pair in 2 hours. 106 W orkers.

Molding of Sole

Finishing

Purchase from Suppliers

10 Cutters. 10 W orkers. 500 pairs per 2 hours.

Packing

Checking and Inspection

4 checkers. 2 hours. 500 pairs

INPUT Start on 8:00 AM

10:00

10 worker. 1 hours. 500 pairs

12:00

OUTPUT 7:00 PM

6:00

As we discuss at the above our bottleneck is molding of sole process. In this process we have already 6 machines, 18 workers which produce 500 pairs of sole within 4 hours. For the improvement of existing molding process, we spend money for purchasing of 6 more molding machines and 18 workers to operate these machanies. Due to this improvement our bottleneck time will be reduce by 2 hours and capacity will be incease by 500 units.

MOLDING PROCESS:
Productivity of Molding machines: = Machine Labour productivity =
Output 500 = = 250 Pieces per hour No.of .Hours 2 No.of .Units No.of .Machines

500 = 41.67 Pieces per 12

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Operational Management
The Application of THEORY OF CONSTRAINTS RAJA Industries (Pvt) Ltd Output 500 Productivity per worker = = = 13.89 Pieces per worker TotalWor ker s 36 5. EVALUATE & SHIFTING OF BOTTLENECK:

By the improvement in bottleneck our bottleneck time reduce by 2 hours. Now our other processess has also time of 2 hours except packing process. So our all processes except packing process are our current bottlenecks. It mean now our whole process is running at full capacity and if we want to remove our current bottlenecks then we will have to change our whole processing setup.

CONCLUSION:
At the end we have conclude that if we improve the current bottleneck then we should be re-change our whole process for achieving better efficiency and productivity.

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