About this Presentation
LeTrourneau (LT) is headquartered in Longview, Texas with manufacturing locations in Longview, and Houston TX and Vicksburg, MS and with dealer locations worldwide. Markets served include controls, drive systems, internodal mining, drilling, forestry, marine, and steel. LT characteristics include: 1. Product leadership makes the largest products in the world. Jack-up rig sells from 150 million to 300 million dollars. It is delivered as a kit valued at about 40 million then is built with about a million man-hours as a 1 to 3 year project. 2. Make steel from scrap making thick plates 2-10 inches. 3. Build front-end loaders 7000-75000 parts works 8 years with over 90% uptime. 4. Have produced most of these products for over 50 years. We have only been in the drilling market for five year. We are heavily vertically integrated which is unusual for heavy equipment manufacturers. Typical undesirable effects (UDEs) include long lead times, high WIP, high obsolete inventory, very low inventory turns, low on-time delivery, high overtime and expediting, exiting markets due to pricing competition, poor cash flow, and low ROI. Total reliance was placed on GAAP for decision making for product pricing, transfer pricing, sourcing, capital expenditure, product profitability, etc. In 2000 we implemented drum buffer rope (DBR), installed MAPICS finite capacity planning module causing on-time delivery to increase from 10 to 75%. In 2004, Constraint Management Group (CMG) worked with LT providing the Jonah program. In 2005 we implemented TOC company-wide. The core conflict was A Maximize LeTrourneau ROI with B Meet LeTourneau’s customer and market requirements and opportunities requiring D Focus and act on company performance and the other requirements C Maximize margins and metrics under my control requiring D’ Focus and act on local performance. The primary injection was simple correct signals between business groups (BGs) and resources that maximize company throughput, net profit and ROI. The planning and control dilemma existed also. One strategic point was selected for each BG and component group. When we turned on the buffers we found we were working on green items (early items) when we had a lot of items in red (almost late). Steel Group implementation results showed previously poor financial performance to extremely profitable and included productivity increased 25%, WIP inventory decreased 25%, cycle time decreased 64% (14 to 5 weeks), on-time delivery increased from 50 to 90%, and plate inventory held decreased 2.6 million dollars.
What Will You Learn
To help you get the most value from this session, we’ve highlighted a few key points. These takeaways capture the main ideas and practical insights from the presentation, making it easier for you to review, reflect, and apply what you’ve learned.
The company has a rich history and a diverse product portfolio.
The company has faced operational challenges due to its complex manufacturing process and market positioning.
The implementation of Theory of Constraints (TOC) has significantly improved the company's operational efficiency.
Instructor(s)
Jennifer Eckman
Ms Alka Wadhwa
Alka Wadhwa is an experienced consultant and process improvement expert with over 24 years of expertise in the Theory of Constraints (TOC), Lean Six Sigma, and organizational performance optimization. She has successfully led projects in healthcare, financial services, and manufacturing, driving significant improvements such as a 67% boost in hospital operations and a 140% increase in outpatient visits.
Previously, Alka Wadhwa spent 17+ years at GE Global Research Center, where she led initiatives to enhance various GE businesses through advanced technologies, process redesign, and system optimization. Founder of Better Solutions Consulting, LLC, she specializes in using TOC, Six Sigma, and data analytics to streamline operations and build high-performance teams.
Her work has earned her multiple accolades, including the Empire State Award of Excellence in healthcare.
Dr Gary Wadhwa
Dr. Gary Wadhwa is a Board Certified Oral & Maxillofacial Surgeon with extensive experience in the field. He completed his Oral & Maxillofacial Surgery training at Montefiore Hospital, Albert Einstein College of Medicine in Bronx, NY, and has served as an Attending at prestigious institutions like St. Peters Hospitals, Ellis Hospital, and Beth Israel Hospital in NY. With a career spanning over two decades, he was the former CEO and President of a group specialty practice in NY from 1994 to 2015. Dr. Wadhwa holds an MBA from UT at Knoxville, TN, and has undergone additional training in System Dynamics at MIT, Health System Management at Harvard Business School, and Entrepreneurship and healthcare innovations at Columbia Business School. Committed to expanding access to Oral & Maxillofacial Surgery care, he is currently engaged in a meaningful project to provide healthcare services to underserved populations in inner city and rural areas through non-profit Community Health Centers.