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The Goal Introduction to the Theory of Constraints an Overview





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the Goal What is Drum Buffer Rope

Fri, 31 Jul 2009 02:51:00 +0000

Drum Buffer Rope (DBR) is a planning and scheduling solution derived from the Theory of Constraints (ToC).The fundamental assumption of DBR is that within any plant there is one or a limited number of scarce resources which control the overall output of that plant. This is the "drum", which sets the pace for all other resources.In order to maximize the output of the system, planning and execution behaviors are focused on exploiting the drum, protecting it against disruption through the use of "time buffers", and synchronizing or subordinating all other resources and decisions to the activity of the drum through a mechanism that is akin to a "rope".Theory of ConstraintsToC (Theory of Constraints), also called Constraint Management, is a philosophy and set of techniques used to manage an organization. Most widely implemented in manufacturing operations, it teaches management how to identify and direct their focus on the few critical drivers that matter to the bottom line performance.Eliyahu Goldratt originated the idea in his book The Goal as a way of managing the business to increase profits. ToC is a proven method that can be used by existing personnel to increase throughput (sales), reliability, and quality while decreasing inventory, WIP, late deliveries, and overtime. Successful organizations also adopt ToC to help make tactical & strategic decisions for continuous improvement.The crucial insight of ToC is that only a few elements (constraints) in a business control the financial results of the entire company. ToC tools identify these constraints, and focus the entire organization on simple, effective solutions to problems that seemed insurmountably complex and unsolvable.The Scheduling ProblemWhen one looks at the load versus capacity, one must look at each resource individually. The aggregate view of, for example, 1000 hours available in the factory versus 880 hours of demand doesn't adequately describe the situation. In figure 1, we see that most work centers have extra capacity, while work center 3 is fully loaded and cannot accept more work. The true state of this plant is that it is full and cannot accept more work that involves WC3.In addition, we must consider the time frame in which the demand occurs. A monthly or weekly aggregate view of demand may not be sufficient to take action and deliver work on time.To solve this problem, most systems will offset by some standard fixed lead time, but all that does is move the peak over. Forward scheduling algorithms will not "see" the peak until it's too late The peak demand must be moved to open capacity.If you ignore peak demands, you will have expediting, overtime, additional WIP, late deliveries because capacity may not be available when needed. This will have negative effect on system throughput, due date performance, and lead times.ToC in ProductionThe Theory of Constraints is an integrated management philosophy and set of techniques which serve to manage & optimize the activity of the business.ToC begins with one underlying assumption; the performance of the system's constraint will determine the performance of the entire system. To help you understand explain, we use a chain as an analogy. The strength of the chain is determined by its weakest link. What determines the strength of the chain? Its weakest link.The process of delivering a product or service is very much like a chain; each resource and function are linked. It only takes one element in the system to fail, to cause the entire system to fail.In order to improve the system, we must optimize the weakest link; the constraint or drum. All other resources are subordinated to that.In scheduling terms, we 1. Develop a detailed schedule for the drum resource 2. Add buffers to protect the performance of that resource 3. Synchronize the schedule of all other resources to the drum scheduleThe Drum Buffer Rope SolutionIdentify the system's constraintThe first step is to identify the drum. The drum is typically the most heavily loaded resource (or workcenter) in the plant.Exploit the constraintOnce the drum has be[...]



The Goal Introduction to the Theory of Constraints an Overview

Fri, 31 Jul 2009 02:50:00 +0000

In today's economic climate, many organizations struggle with declining sales and increasing costs. Some choose to hunker down and weather the storm, hoping for better results in the future. However, layoffs and workforce reductions jeopardize future competitiveness. Organizations that have implemented the Theory of Constraints (ToC) continue to thrive and grow in difficult times, continuing to achieve real bottom line growth, whether by improving productivity or increased revenues.Since 1985, the Theory of Constraints (ToC) has been producing startling bottom line results to companies worldwide. An independent study of Theory of Constraints Implementations around the world found that huge results were consistently achieved:"?? Lead Times - Reduced 69% "?? Cycle Times - Reduced 66% "?? Due Date Performance - Improved 60% "?? Inventory Levels - Reduced 50% "?? Revenue / Throughput - Increased 68% Many organizations that implement Theory of Constraints (ToC) realize profit improvements over 100% the first year.The Theory of Constraints (ToC) is a set of holistic processes and insights, all based on a systems approach that simplifies the improving and managing of complex organizations by focusing on the few physical and logical constraining "leverage" points. It provides a set of tools to build and implement the "levers" (holistic rules) that synchronize the parts to achieve an order of magnitude improvement in the performance of the system as a whole.The crucial insight of the Theory of Constraints is that only a few elements (constraints) in a business control the results of the entire organization. Theory of Constraints tools identify these constraints, and focus the entire organization on simple, effective solutions to problems that seemed insurmountably complex and unsolvable.The theory of constraints has three underlying assumptions: Convergence - Inherent Simplicity ;The more complex a system is to describe, the simpler it is to manage.Consistency - There are no conflicts in nature; if two interpretations of a natural phenomenon are in conflict, one or possibly both must be wrong.Respect - People are not stupid; even when people do things that seem stupid they have a reason for that behaviorEliyahu Goldratt originated the idea in his book The Goal as a way of managing organizations to increase profits. The Theory of Constraints is a proven method that can be used by existing personnel to increase throughput (sales), reliability, and quality while decreasing inventory, WIP, late deliveries, and overtime. Successful organizations also adopt the Theory of Constraints (ToC) to help make tactical & strategic decisions for continuous improvement.The Theory of Constraints is not just a tool to manage bottlenecks. In fact, the scope of tools and breadth of application of Theory of Constraints is substantial. Theory of Constraints (ToC) ApplicationsAfter more than 25 years of development, the Theory of Constraints has several distinct applications or tools:The Five Focusing Steps of Ongoing Improvement1. Identify the system's constraint2. Decide how to exploit the system's constraint3. Subordinate everything else to the prior decisions4. Elevate the system's constraint5. If, in the prior steps, the constraint has been broken, go back to step one.Theory of Constraints Jonah Thinking Processes"?? Evaporating Cloud or conflict diagram"?? Current Reality Tree (CRT)"?? Future Reality Tree (FRT)"?? Negative Branch Reservation (NBR) or branch"?? Prerequisite Tree (PrT)"?? Transition Tree (TrT)"?? Strategy and Tactics Tree (S&T)Throughput Accounting"?? Throughput (T): The rate at which the system generates money (through sales)."?? Inventory (I): All of money the system invests in items it intends to resell"?? Operating Expense (OE): all the money the system spends to turn inventory into throughput"?? Net Profit (NP) = T- OE"?? Return on Investment (ROI) = NP / IGeneric Solutions1. Operations - Drum Buffer Rope (DBR) and Simplified Drum Buffer Rope (SDBR)2. Finance - Throughput Accounting3. Pro[...]