Located in India, Indo Asian Fusegar Limited has been manufacturing electrical and lighting products since 1958. By September 2001, the company had hit bottom. Their on-time-in-full delivery performance was less than 10%. Payroll was a month behind. Payables were more than 90 days past due and suppliers were questioning whether or not to continue supplying to the company. There was a severe cash shortage. Sales were declining due to poor performance. And for the year 2000-2001, the company lost money – for the first time in 42 years.

In September 2001 Indo Asian was introduced to TOC. Prior to this they perceived their problem to be in the market – not enough customers. After their initial exposure to TOC they realized that timely order fulfillment was the key to their success. They agreed to a pilot TOC implementation in their plants. The focus changed from “production” – number of items produced – to “dispatch” – numbers of orders executed in full. The plants were no longer allowed to dispatch incomplete orders. Marketing was now only allowed to pass on actual orders to the plant – not orders based on forecast.

The company also implemented an unrefuseable offer with a key customer that resulted in a favorable payment arrangement. Indo Asian was being paid in full on delivery of orders (within six days of the order) rather than after the usual 60+ days. In return, Indo Asian reduced their prices to this customer, and this customer only, by 50%. This resulted in significantly improved cash flows.