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16th International Conference of the

TOC Practitioners Alliance - TOCPA
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April 23, 2015 Johannesburg, South Africa

Driving SMME Behaviour

through a TOC Priority System
Case Study of the Footwear
Manufacturing Supply Chain at
Watson Shoes
Dawid B Janse van Rensburg, CargoSolutions, South Africa
23rd April, 2015

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Dawid Janse van

Rensburg
MD of CargoSolutions, a supply chain optimization
business unit of the Cargo Carriers Group.
Focus
on
TOC
supply
chain
solution
implementations, and is an Implementation Partner
for Inherent Simplicitys Symphony software in SA.
Worked in many industries in SA, including FMCG,
building supplies, extrusion, footwear, clothing and
printing, distribution, etc.
TOCICO certified in Supply Chain and Logistics.

Contact info:
dawid@cargosolutions.co.za
011 485 8700
083 3034183
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Discussion Points

Watson Shoes & History (SMMEs)

Industry challenges
Response to Challenges
TOC Implementation
The New Supply Chain & Buffers (uppers)
SMME roles factory lines & priorities
The good, the bad and the ugly!
Relaying the priorities visibility
Lessons learned

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Watson Shoes
1859 Charles Searle, a British immigrant and
resident tollkeeper of Great Brak River, began
manufacturing traditional leather veldschoens
for the pioneering travelers along the
Southern Cape coast
Today approximately 1 million pairs pa (850k
own manufacturing)
Employs roughly 900 people in Southern Cape
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Earlier Challenges facing the

Footwear Industry

Massive growth in imports from China (driven

by retailers)
Industrial action
A make-to-order industry characterised by
long lead times 8-16 weeks plus
Resultant impact on retailers

BEE - factor on larger contracts

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Footwear Imports

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Initial Response to Challenges

2008 to 2013

SMME drive
Started to embrace MTS, but with sales order
bundle approach
Ongoing issues with MTO styles efficiencies!
Compliment range with imports (25%)
Intricate production planning systems

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Supply Chain Before

SMMEs work
on a day-plan
with due date

Non Complete
SMMEs

Based on dayplan, MRP is

done for RM

Sales Orders
stacked, and
shipped when
complete

Soles

Non Complete
SMMEs

Uppers
Suppliers
RM
WH

In-house
Clicking

In-house
Making

Complete SMMEs

FG
WH

5 16 weeks
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Challenges in 2013

Planning process
Efficiencies
Availability of fast runners not good
Due Date Performance of MTO styles not good
Long lead times
Excessive inventories
Raw material challenges (shortages & surpluses)
SMME alignment
Many, and Varied
Service levels difficult to enforce
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TOC Project
Started in early 2014
Combined Consumer Goods and
Manufacturing MTO Strategy and Tactics
templates from Goldratt Consulting
Initial focus on high availability of fast runners
MTA to enable inventory turns selling
Secondary focus on MTO lead time reduction
and high Due Date Performance
Ultimate objective is to increase sales across
the range
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Five Focusing Steps

1. IDENTIFY the systems constraint(s) Production
Stock, Time &
2. Decide how to EXPLOIT (make the most out of) the Capacity Buffers

constraint(s)

Priority system in
3. SUBORDINATE everything to the above decisions procurement
and production

4. ELEVATE - Find/invest in additional capacity or alternatives

5. If at any time in a previous step a constraint has been broken

go back to Step 1.
Do not allow INERTIA to become the constraint!

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Stock & Time Buffers

Type 1: MTO - Time Buffers

Blue
Status
Implies
Too Early

Order
Date

Scheduled
Release
Date

Buffer time

If order not yet

completed,
its
status turns Yellow

Type 2: MTS - Stock Buffers

If order not yet

completed,
its
status turns Red

Due
Date
If order not yet
completed,
its status turns

Black
If stock is greater than the
buffer, the Status is Blue
3/3

If stock consumed is 1/3 its

status turns Yellow
If stock consumed is 2/3 its
status turns Red
If stock consumed is 3/3 its
status turns Black
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Supply Chain After

Soles SMME
1 week
Non Complete
SMMEs
Suppliers

2-4 weeks

Soles
WH

Upp
ers
WH

RM
WH
In-house
Clicking
<1 week

In-house
Making
1 week
FG
WH

Complete SMMEs (MTA & MTO)

3-8 weeks

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Post Implementation Status

Production planning improvement, but.

Improvement in MTA availability, but
Improvement in lead times and DDP, but
Overstocking reduction, but
Soles availability, but
Raw material availability, but.
Etc

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Finished Goods WH

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Kraal WH (Uppers)

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Dormadeals Misc SB

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Shipping Buffer - All

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Experience Spoiler (Bulk)

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Experience Bass

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Arse end. Shoeroom!

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Five Focusing Steps

1. IDENTIFY the systems constraint(s)

YES

2. Decide how to EXPLOIT (make the most out of) the

constraint(s)
3. SUBORDINATE everything to the above decisions

YES
NO!

4. ELEVATE - Find/invest in additional capacity or alternatives

5. If at any time in a previous step a constraint has been broken
go back to Step 1.
Do not allow INERTIA to become the constraint!

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Subordinate!
Production Planning
Making Uppers
Making - Soles
Raw Materials procurement
(and Elevate on MTOs)

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RM Upper Leathers

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RM Bottom Grindery

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Crepe Soles

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Innovative Cutting GH Mocc Bulk

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Experience Spoiler

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Experience Misc

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Dorma (Kraal)

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MTO Lead Times

Average 48 days to 28 days!

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Overstocking (FG)!

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Prime Measurements
Sales (Throughput)

Stock-Outs Percentage

Due Date Performance (MTOs)

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Web Interface

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Mobile Interface

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Violations Report

Previous Load

Closed Tickets

Non-Complete SMME's
Factory Line
FL No
JR Cutting Mocc (Bulk) KRL
JR Cutting Stitch-down
JR Mocc (Bulk) KRL
JR Stitchdown
Just Upper Kiddies (Bulk)

Non-Complete SMME's
Black
93
92
90
91
11

Red

5
1700
0
406
0

Yellow Green Blue

50
2895
3005
2510
884
428
442
93
200
330
180
6070
329
177
38
0
0
0
0
0

Inhouse & Complete SMME's

Factory Line
FL No
JR Cutting Mocc (Bulk) KRL
JR Cutting Stitch-down
JR Mocc (Bulk) KRL
JR Stitchdown
Just Upper Kiddies (Bulk)

Factory Line
FL No
JR Cutting Mocc (Bulk) KRL
JR Cutting Stitch-down
JR Mocc (Bulk) KRL
JR Stitchdown
Just Upper Kiddies (Bulk)

Black
93
92
90
91
11

Red
0
12
0
17
0

Yellow
0
0
50
0
0

Green

0
0
70
0
0

Blue
0
0
0
0
0

100
0
50
0
0

Inhouse & Complete SMME's

Black
93
92
90
91
11

Red
0
0
0
0
960

Yellow
0
0
0
0
330

0
0
0
0
790

Green
0
0
0
0
830

Blue
0
0
0
0
330

Factory Line
FL No
JR Cutting Mocc (Bulk) KRL
JR Cutting Stitch-down
JR Mocc (Bulk) KRL
JR Stitchdown
Just Upper Kiddies (Bulk)

Black
93
92
90
91
11

Red
0
0
0
0
30

Yellow
0
0
0
0
30

0
0
0
0
20

Green

Blue
0
0
0
0
0

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0
0
0
0
0

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Conclusion

The Five Focussing Steps Work, BUT

SUBORDINATE (after Exploitation)!
Also implies VISIBILITY!
And never compromise!

16th International Conference of the TOC Practitioners Alliance - TOCPA