Theory of Constraints -The Goal

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GOAL (A PROCESS OF ONGOINGIMPROVEMENT)OPERATION MANAGEMENT

This project is basically the application of GOAL (novel) in the operating firm in Pakistan. The firm thathave been chosen for the application of GOAL is HILBRO (Pvt.) Limited and further from its medicalcategory products MAC & MILLER Disposable BLADE’s manufacturing process have been assessed by theapplication of GOAL’s Theory of Constraints.

M. MOBASHAR ALI 08117032ASIF MEHMOOD 08117033IMRAN KHAN 08117043SALMAN-UL-MUSTAFA 08117044

BY:

12/30/2009

GOAL (A PROCESS OF ONGOING IMPROVEMENT)Dec. 30

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TABLE OF CONTENTS

COMPANY PORTRAYAL ............................................................................................................................ 3

1. HISTORY ....................................................................................................................................... 3

2. PROFILE ....................................................................................................................................... 3

PRODUCTION PROCESS ........................................................................................................................... 4

1. RAW MATERIAL ........................................................................................................................... 4

2. PUTTING MATERIAL INTO PROCESS .............................................................................................. 4

ANALYSIS OF PROCESS ............................................................................................................................. 5

THEORY OF CONSTRAINTS ....................................................................................................................... 6

1. IDENTIFICATION OF CONSTRAINT................................................................................................. 6

2. EXPLOITING CONSTRAINT ............................................................................................................ 6

3. SUBORDINATING CONSTRAINT .................................................................................................... 6

4. ELEVATE CONSTRAINT.................................................................................................................. 7

5. RE-EVALUATING PROCESS ............................................................................................................ 7


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COMPANY PORTRAYAL

1. HISTORYIt was the year 1916 when a few talented workers from Sialkot, who were our forefathers,

joined hands to start production of surgical instruments. Production was initiated on the basis

of samples that were brought by a businessman of Sialkot from United Kingdom, who also

happened to be member of The Privy Council.

Exports had started in the 1940s, but the industry got a boost during the Second World War

(1939-1945) due to stoppage of supply of instruments from England. In 1946, three real

brothers (Mr. Mohammed Safder, Mr. Mohammed Ashraf and Mr. Mohammed Akram)

established a partnership company under the name Hillerich Brothers. In 1954, the company

made its first export of surgical instruments by any Pakistani company to United States of

America. In the year 1961, both companies, Hillerich Brothers & Surgical Corporation, joined

hands and formed a new company called Hilbro (Pvt.) Limited. Company continued to progress

and due to further increase in demand, it was decided to move to a larger facility in Small

Industrial Estate, Sialkot.

2. PROFILEHilbro (Pvt) Limited manufactures and supplies surgical & dental instruments. It is certified with

ISO-9002 certification. It specializes in all kinds of forceps and scissors. It has 45 Products &

Services categories.


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PRODUCTION PROCESS

This analysis is on MAC & MILLER Disposable BLADES that HILBRO (Pvt.) Limited currently

manufacture. Demand of these Blades is on the peak now-a-days. This is basically a medical

category product and HILBRO’s best exporting product. Detail of its manufacturing process is

given in Exhibit 1.

1. RAW MATERIALHILBRO for the manufacturing of these BLADES buy three types of materials.

ABS, Nylon, Plastic for the manufacturing of Blades, blade shown in Exhibit 2 and

bought in bags, 1 bag has 25 kg.

2. PUTTING MATERIAL INTO PROCESS

Material firstly put into machine burner for heating that has a capacity of 10 kg (1kg

take same time as 10 kg) and then injected into machine dies and then put into water for

cool and shrinks. There are five machines working for this and processed blades in five sizes.

Each machine has its own burner. Four workers are employed on razor machines and have a

capacity of 480 pieces. Pieces are chemically washed in a bowl and bowl can only contain

600 pieces at a time. Only one worker employed on chemical washing. Then for spring

fitting and tube fitting HILBRO use outsource small suppliers. HILBRO outsource spring

fitting and tube fitting because this is not a technical work to do, this work can also be done

in the company because company have excessive capacity to employ more workers but

there are no machines for this purpose HILBRO have and although these machines are very

expensive to buy but these require time to import and installed and run, which results in

late deliveries to the customers. Although they also incur transportation costs but these are

nominal. And also require more workers to employ and to train them is not that easy. So

outsource is their best solution.

Then the pieces are verified to check the Quality standard by the four efficient workers

of the Company. If there would some pieces that will not met quality standard, those parts

again put into process and there are hardly less chances for these pieces.


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When these 5 sizes of blades are verified than these blades packed in one box and wrapped.

Wrapped boxes than moved to finished goods inventory.

ANALYSIS OF PROCESS

1. Capacity of the system is the capacity of bottleneck, i.e. spring fitting in the process. So we can

say that system has a capacity of 60 pieces per hour.

2. Throughput time of the process is 73 minutes & 40 seconds.

3. Cycle time in the process of manufacturing is 5 minutes.

4. Run time of each process

5. Batch size of each process

Heating process (50 pieces) 60 minutes

Injection into machine 1 minute

Cool & shrink 0 minute

Blade razor 1 minute

Chemical washing 0 minute

Spring fitting 5 minutes

Tube fitting 2.5 minutes

Quality checking 1.5 minutes

Packing 2 minutes

Wrapping 40 seconds

Heating process 50 pieces

Injection into machine (5 machines) 5 pieces

Cool & shrink N/A

Blade razor 8 pieces

Chemical washing N/A

Spring fitting 5 pieces

Tube fitting 5 pieces

Quality checking 5 pieces

Packing 5 pieces

Wrapping 5 pieces


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THEORY OF CONSTRAINTS

1. IDENTIFICATION OF CONSTRAINT

A. BOTTLENECK

Bottleneck in the process is spring fitting task. HILBRO outsource this and get back

pieces after the completion of spring and tube fitting. One piece requires one minute to

process. This is the bottleneck that is making there production limits.

2. EXPLOITING CONSTRAINT

a. There is time wastage from goods-in-transit and also late delivery from small

suppliers. HILBRO have excessive portion in the area of its plantation, so to avoid

these problems they offer the supplier to shift that area which eliminates their

transportation costs and also they can make timely deliveries to the customers.

b. HILBRO’s current strategy is “make-to-stock”, HILBRO has a prediction about the

demand of the products in the future to increase, because its products are medical

category product, so they can change strategy to “make-to-stock”, that can also

eliminate the problem of outsource i.e. late deliveries from suppliers, consequently

late deliveries to customers.

c. They can use more outsource suppliers to get the completion of the task as early as

possible.

3. SUBORDINATING CONSTRAINT

a. They can reduce their excessive workers at the wrapping task and also from the

quality checking departments and from packing task to decrease expenses and also

to go with the capacity of the bottleneck.

b. Labor at task blade razing is under utilized so the extra labor can help others out to

increase capacity.


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4. ELEVATE CONSTRAINT

a. HILBRO have excessive area in the plant so they should buy the machinery for tube

fitting and spring fitting, because they now that demand of these products would

increase in the future.

b. They can run the second shift to make the products more and double from the existing

quantity, so there excessive workers would not need to remove but they work in second

shift.

c. For heating, it takes one hour to heat ten kilogram of the nylon, so it can buy the latest

burner with the high degree of temperature that heat the nylon early that reduces their

throughput.

d. HILBRO should give training to the workers to perform all type of tasks so that they help

others to perform the tasks efficiently and effectively.

5. RE-EVALUATING PROCESS

After the implementation of the above mention elevations of constraints bottleneck is

shifted from “spring fitting task” to “tube fitting task”. Company use outside suppliers to

perform these two tasks, but when company bought new machinery for spring fitting

than bottleneck shift to the tube fitting that company also outsource. So again this to

eliminate constraints would be applied and after the removal of the shifted bottleneck

to the tube fitting, bottleneck further shift to the “quality standard checking”.

So it is being understandable that bottleneck in the process will never be eliminated but

bottleneck shifts from one task to another task.


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Exhibit 2

Documents

Theory of Constraints -The Goal