ThermoFab Targets Constraints to Cut Delivery Times

With "Drum Buffer Rope" techniques and a bit of software, manufacturer slashes lead times by 90 percent

Hampton, NH — October 15, 2003 — Plastic enclosures specialist ThermoFab has applied the "Drum Buffer Rope" (DBR) production planning technique inspired by the "Theory of Constraints" (TOC) business management philosophy — along with a bit of technology — to improve its workflow and accelerate delivery times, and the effort has paid off with a 90 percent reduction in lead times.

Based in Shirley, Mass., ThermoFab specializes in the thermoforming of plastic enclosures for a wide range of medical, industrial and computer products. Typically, the volume on the thermoformed plastic parts and assemblies that the company produces doesn't justify injection molding and other high-volume techniques.

The challenge for the company has been to find ways to shorten its lead times, according to company president Tom King, Jr. "Typically, we'll produce 50 to 100 units per month for a customer, but we have some products that we do in lots of as few as five units," King explained. "We quote six to eight weeks delivery, and up until now, we've had a very difficult time making good on those promises."

In May, at a seminar, King heard TOC guru Eli Goldratt and Richard Lilly, the CEO of solution provider Lilly Software, discuss DBR and the Theory of Constraints. Drum Buffer Rope controls the flow of materials through the plant in order to produce products in accordance with market demand with a minimum of manufacturing lead time, inventory and operating expenses. The technique helps companies to maximize the use of a "capacity constraint resource" and use time buffers to create schedules that help deliver products on time.

King also heard Lilly talk about how the solution provider's DBR software can help improve plant throughput using Drum Buffer Rope techniques. King brought the message back to his staff in June and signed on for a "Fast Track" implementation of Lilly's VISUAL DBR solution early in August. The company went live with DBR on September 16, 39 days after signing the contract with Lilly.

In implementing the software, ThermoFab changed the way it assigns and controls work in the plant. The Lilly team trained ThermoFab employees on DBR concepts and worked with them to inject the DBR process into their everyday procedures.

In doing so, the company has been able to reduce its average lead times from 45 to five days. "All of a sudden, with DBR, we're shipping everything on time — even the 'rush' orders," says King. "Only 39 days to transform ThermoFab into a company that can manufacture at warp speed; faster than any of our competitors. We are exceeding all of our plans and expectations."

With its old cost accounting methods, ThermoFab had to turn away business that appeared to offer low margins. In its first month of TOC consulting and through re-evaluating its business using throughput measurements, however, ThermoFab was able to recognize hidden profit and take on new business. With more accurate business metrics and improved delivery, the company projects to gain an additional 10 percent revenue in the coming year.

Now that the software is in place to support the new DBR way of managing production, King looks forward to even better results. "It's never good enough," he says. "We can always improve more. Soon our bottleneck will be sales. We're caught up on our backlog, and now we'll be looking for more work."

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